Aug 8, 2007
The Credit Game
What is the “Credit Game”?
First of all, it’s all about profit. Creditors want to keep you in what is called the “subprime gap”. It’s the most profitable place to keep you. They want your credit rating to be high enough for you to be able to get a loan and not default on it, but low enough for you to pay their highest interest rates.
Perhaps the following passage from the bible explains it best:
“The rich rule over the poor, and the borrower is servant to the lender.” – Proverbs 22:7
The Credit Scoring System
It is so incredibly important in this day and age to understand “the credit game” and exactly what’s going on. Many of the people who fail to understand this will simply be left behind. The credit scoring system is designed for one purpose and one purpose only and that is to maximize creditor profits. Debt collectors and the credit reporting agencies are also making plenty of money from the game as well, they just happen to be on the sidelines watching the “system” they’ve designed.
The credit reporting system was not designed with the consumer in mind and it is corrupt because of who profits most from it. For years, consumer advocate groups have lobbied for reform. Finally, in 2004 Congress approved changes to the Fair Credit Reporting Act that placed new procedural requirements on the credit bureaus.
Some decent changes have been made in the law, but these changes have accomplished very little in terms of accuracy of information. Despite plenty of lawsuits and a record number of complaints to the Federal Trade Commission, regulators are just not enforcing the new laws.
The whole credit scoring system is still unfair because consumers are guilty until proven innocent. Credit bureaus are still re-aging accounts. They still refuse to re-investigate accounts that have been “previously verified”. They still reinsert deleted accounts without notifying the consumer as required by law. They still refuse to investigate inquiries. They still allow debt collectors to place hard inquiries on credit reports when the inquiry should be a harmless account review. (This alone can lower your score up to 50 points.)
Did you know that the FTC refers consumer complaints to credit reporting agencies? That’s right. When you complain to the FTC about Equifax, Trans Union of Experian, they forward your complaint right back to them. The agencies will review the complaints and report the results to the FTC. Some believe it improves the odds of getting an inaccurate account deleted considerably. I believe the disputes should have been taken seriously without having to complain to the FTC.
Winning the “Credit Game”
It’s an educational process. But, it’s important to learn as much as you can about how the system works. For those of you with bad credit, it starts with repairing and rebuilding your credit. Do whatever it takes to get out and stay out of the subprime gap! You don’t have to be a servant to your creditors the rest of your life.
When you're ready to get out of the subprime gap check out The Credit Secrets Bible. If you have any questions or comments, please feel free to stop by the credit repair forums where help is always available. Membership is free!
First of all, it’s all about profit. Creditors want to keep you in what is called the “subprime gap”. It’s the most profitable place to keep you. They want your credit rating to be high enough for you to be able to get a loan and not default on it, but low enough for you to pay their highest interest rates.
Perhaps the following passage from the bible explains it best:
“The rich rule over the poor, and the borrower is servant to the lender.” – Proverbs 22:7
The Credit Scoring System
It is so incredibly important in this day and age to understand “the credit game” and exactly what’s going on. Many of the people who fail to understand this will simply be left behind. The credit scoring system is designed for one purpose and one purpose only and that is to maximize creditor profits. Debt collectors and the credit reporting agencies are also making plenty of money from the game as well, they just happen to be on the sidelines watching the “system” they’ve designed.
The credit reporting system was not designed with the consumer in mind and it is corrupt because of who profits most from it. For years, consumer advocate groups have lobbied for reform. Finally, in 2004 Congress approved changes to the Fair Credit Reporting Act that placed new procedural requirements on the credit bureaus.
Some decent changes have been made in the law, but these changes have accomplished very little in terms of accuracy of information. Despite plenty of lawsuits and a record number of complaints to the Federal Trade Commission, regulators are just not enforcing the new laws.
The whole credit scoring system is still unfair because consumers are guilty until proven innocent. Credit bureaus are still re-aging accounts. They still refuse to re-investigate accounts that have been “previously verified”. They still reinsert deleted accounts without notifying the consumer as required by law. They still refuse to investigate inquiries. They still allow debt collectors to place hard inquiries on credit reports when the inquiry should be a harmless account review. (This alone can lower your score up to 50 points.)
Did you know that the FTC refers consumer complaints to credit reporting agencies? That’s right. When you complain to the FTC about Equifax, Trans Union of Experian, they forward your complaint right back to them. The agencies will review the complaints and report the results to the FTC. Some believe it improves the odds of getting an inaccurate account deleted considerably. I believe the disputes should have been taken seriously without having to complain to the FTC.
Winning the “Credit Game”
It’s an educational process. But, it’s important to learn as much as you can about how the system works. For those of you with bad credit, it starts with repairing and rebuilding your credit. Do whatever it takes to get out and stay out of the subprime gap! You don’t have to be a servant to your creditors the rest of your life.
When you're ready to get out of the subprime gap check out The Credit Secrets Bible. If you have any questions or comments, please feel free to stop by the credit repair forums where help is always available. Membership is free!
Labels: credit bureaus, credit game, credit repair, credit reporting agencies, credit scoring, subprime gap
posted by Chane Steiner at 2:29 AM | 
