Credit Scores Gone Wild – 6 Reasons To Revamp The Credit Scoring System

Vote on Blog EngageIt’s always been said that if you have good credit you’ll be offered lower interest rates because you’re considered a low credit risk. As a result, over the years many of us have spent countless hours and exorbitant fees trying to repair our credit reports. Last year we were hit by this current financial crisis and, in-turn the credit card companies began raising interest rates, even for those of us that were previously considered low risk. The logical conclusion here is that banks can raise your rates whenever they want; your pristine credit rating ain’t worth diddly.

My question to you is, why do we need those credit reporting agencies anyway? Oh yeah, that would be: Equifax, TransUnion, and Experian. Let’s review a few points:
  1. The 3 agencies spew out different – often conflicting information on your report
  2. One out of the 3 has to be more accurate than the other 2
  3. Very often we end up with wrong information appearing on our reports that we need to have “fixed
  4. It’s no secret that these 3 agencies are flawed, (isn’t that the reason we have 3 in the first place) so let’s “fix’ them and the methods they use to collect the data
  5. If we need to rely on credit reporting agencies can’t we have just one that is accurate at least 90 – 95% of the time? Come on people this is American right?
  6. Bottom line – what’s the difference when it seems the lending institutions can basically charge whatever interest rate they want whenever they get ready to anyway??
Credit Basis

Credit Basis

I know that there is someone reading this thinking that I’m out of my league and I don’t know how devastating it would be to change the current system. If you happen to be that person, I say to you, the next time you get your free annual credit report, and if you find no erroneous, outdated or just plain old wrong data on all 3 of them, watch out your interest rates are about to go up!

EXAMPLE: On September 1, 2009 Michael Jackson’s credit scores were reported by TMZ as 592, 575 and 524. (R.I.P. King of Pop)


3 responses to “Credit Scores Gone Wild – 6 Reasons To Revamp The Credit Scoring System

  1. The sweet spot in the credit world is don’t use it. I have a credit card…maybe two. I use it frequently, but, no matter the balance. I pay it off every month in full.

    If it were only that easy, I guess. I know lots of things are driven by credit scores, like insurance rates for example.

    So, can this be fixed, can we make these agencies more accountable…or at least, more correct?

    Best Regards, Galen
    Imagineering Fiction Blog

  2. Hi Ileane,

    Credit cards are generally speaking bad news I feel – but the good news is that your credit score in the blogging world is as high as it can be …


    P.S. How to fix such a rotten system is certainly beyond me ( with a degree in Economics of all things)

    • Hi Will,
      You are right, we Blog Engage members only have to worry about votes not scores. Thanks for the comment.