Credit Repair: Are you being presumed guilty before even having a chance?
As in our previous Blog, we covered if Credit Repair was Ethical. My contention is you cannot always judge someone’s credit worthiness by their credit history. It hurts and affects everyone when good people are pegged as deadbeats. The policies of the credit bureaus have been so grossly unfair to the consumer and that is why I feel it is fair to oppose the current system of credit reporting. It is just totally unfair to punish the consumer with seven years credit bondage (10 years for bankruptcy and some court decisions). Especially when there have never been any studies that say seven years is the magic number for the time it takes to restore good credit. This seven-year mark is completely random.
“It is our understanding that computer models that predict credit information find that most information that is more than 2 years sold is non-essential,” says Dr.Bonnie Gution, consumer affairs advisor to President Bush. I totally agree. Many of my clients feel that seven years is way too long. Most consumers are able to recover fully from a financial crisis within 2 to 3 years. Despite this, for the next 4 to 5 years they are often forced to live a reduced life-style, rent homes and pay high interest on other loans while being denied credit based on bad reports.
Although credit bureaus claim an error rate of less than 1%, that isn’t necessarily true. Studies performed by independent agencies show that mistakes occur at a rate nearing 79%!!!! One credit bureau admits to an error rate of more than 50%, but they still choose to err on the negative side than the positive.
Credit reporting systems are commonly used in other countries. However, unlike America, most countries doll out credit based on a consumer’s current credit status. For example, in England, Equifax and Experian are not allowed to keep credit information for more than five years. The point to all of this is this – the American credit reporting system needs changing. With this in mind, realize that it’s not unpatriotic to want to ensure your credit report is accurate. And it is NOT unethical either.
When people can’t buy things because of a poor credit report, our country’s financial system suffers. That’s why I offer to help my clients recover from this devastating hardship. My clients are excited to fix their credit and to return to the credit economy and be fiscally trustworthy. My goal is to help my clients escape from people who prey on people with bad credit.
Bad credit costs a person thousands and thousands of dollars and forces many into a vicious cycle that is very difficult to escape. They are forced to rent (where they pay someone else’s mortgage), to buy items at a higher interest rate (cars, credit cards) or to take unfulfilling jobs. Sadly, even one negative item on your report can have far more impact than a lifetime of good credit.
In short, because of poor data collection, reporting and validation, many people suffer unnecessarily from the ill effects of a bad credit report. So to answer the question posed at the beginning of this article, yes, it is ethically sound to remove the record of a negative credit item from your credit report.