by Gail Kerry

Created on: August 30, 2008   Last Updated: July 29, 2010

Our present credit rating system is in need of a complete overhaul, not a minor repair. Presently, lenders are able to supply erroneous information to credit bureaus practically overnight without providing notice to the credit holder. No documentation or supporting evidence is required or supplied with the negative credit information. Currently, even disreputable companies are engaged in supplying credit reporting agencies with false information for profit, counting on the fact that small amounts ($39 or $45 in some cases), will simply be paid when the credit holder is prevented from obtaining new credit. If this sounds incredible, it isn't.

Present laws allow unethical collection agencies to set up shop and immediately begin damaging your credit. A few notorious firms are engaged in purchasing collection accounts from the medical community including private medical practices. Legitimate bills for services rendered may have been delayed due to health insurance reimbursement processing and eventually paid. Nonetheless, these firms have purchased the collection accounts and continue to report damaging information to the credit reporting agencies. It seems that this would be an easy matter to clear up but it's not. By the time the public catches on, they have closed one corporate entity and set up shop somewhere else. As a credit holder, if you get caught in one of these vicious credit scams, it's easier to pay something you don't owe than allow it to remain on your credit. The credit reporting agencies do nothing to ensure the accuracy of data that the collection agencies report, nor do they perform any type of background checks on the unscrupulous companies that are preying on the good credit of private citizens.

Imagine applying for a home loan and just when you are trying to lock in a rate, finding out that there's a serious blemish on your credit report but you know that it's not yours. That situation happened to me. I requested a copy of my credit report from the credit reporting agency and obtained a contact number for the creditor which I purportedly owed money to. When I phoned the collection agency, they simply confirmed that it was my bill even though I had never been to the radiology clinic that they were collecting for. I disputed the bill with the credit reporting agency to no avail. It remained on my report and I had no choice but to stop the loan process or pay a 1.5% higher interest rate due to a large open collection account which was not mine.

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