A week or so ago I got a letter from my alma mater informing me that a hacker had broken into one of their computers that contained some of my private data (birthdate, social security number, etc) — the raw materials necessary for identity theft. (Thanks a lot, guys. As if I didn’t dislike you enough for being a bunch of gutless left-wing appeasing weasels. But I digress.) They recommended placing a fraud alert on my credit records as a precaution, which I did. This resulted in my getting copies of my credit report from the three different reporting agencies so I could check them for bogus entries.

The bad news is I found a bogus credit account in one of the reports. The good news is that it was opened in 1967. (For those of you keeping track at home, I was -4 years old at the time, and I’ve never lived in Arizona, so I’m pretty sure the loan wasn’t mine.) So tomorrow I get to call the agency and get this turd purged from my credit history.

Institutions like credit bureaus make me sympathetic to the otherwise bletcherous concept of the “stakeholder”. These companies compile information whose accuracy has a major effect on the lives of individual people. Problems on your credit report can prevent you from buying a car or house, getting a credit card or even a job. But because the reporting agencies don’t derive their income from the individuals whose credit they track, they don’t have an economic incentive to correct errors in individual cases. They’ll only suffer if their records get so bad that the information they provide cause banks and other major financial institutions to make systematically poor lending decisions; as long as the error level stays below a dull roar, there’s little incentive to clean things up. And to make it worse, there’s another economic incentive to err on the side of caution, in that a loan unfairly rejected doesn’t look as bad on a bank’s balance sheet as a default from a loan unwisely extended.

I have a stake in the accuracy of my credit report. But I’m not a customer of the credit agency, so my leverage with them is very limited. Governments pass laws to try to balance this out, but laws can only help so much when the economic incentives push for minimal compliance.

On the other hand, a credit reporting agency that was economically beholden to the people it was reporting on would suffer different incentives to distort their records in other ways. So I’m not sure what the right solution is.

What I do know is that I’m not looking forward to tomorrow’s phone call. (Just watch, though… now that I’ve ranted about this I’ll probably have a short and pleasant customer service experience.)

Oh, and the next time the alumni association calls and asks for a donation, they get nothing.

2 Responses to “Credit Bureaus, we hates them we does”
  1. mbruce says:

    My experience in these matters(I spent months getting my ex’s credit viable for mortgage application) is to keep your cool,keep it light,have all documentation at hand,and ask for a supervisor(in the most polite of terms)if you feel you are being blocked.Your analysis is so accurate that you ahould do very well in expunging this odious entry.Good luck

  2. David Foster says:

    I can’t imagine why anyone would donate to a university, anyhow. There aren’t many other institutions that spend so much money so irresponsibly and on purposes of such dubious or even negative value.

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