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I was thinking about all freedoms we have and what freedoms that we don’t have. While I have always thought about increasing your credit as a way to get the financial freedom I am now questioning that. Getting a high score means that you will get a better interest rate and more likely to get approved for a mortgage or car loan.
That is a great benefit to having a higher credit score, but at what cost? You have a credit file from the time you first apply for credit or if your parents add you to theirs when you are young. Once it starts it is there FOR LIFE. Maybe even after you die, who knows. You do not have the right to close that account with your information. Well, as it stands now you can’t.
Since the banks, otherwise known as creditors, will need to be able to see your payment history and report what you are doing currently it must stay intact. There is no opting out of the credit bureaus reporting system. It is kind of like social security, but this is not the government it is a private company with all of the information about you being supplied by other private companies. I’m not a lawyer, but this doesn’t seem to me to be the way a private company should be able to operate. You can opt out of everything else with a private company, why not credit bureaus.
The history of the bureaus
I tried to do some research on this and there was not too much that would come up. Everything went back to how to increase your credit score. Hint, hint! Maybe this isn’t something that anyone else thinks about, but I find it hard to believe that I am the only one. Here is a brief history about them.
Equifax is the oldest bureau and was started in 1899 by Cator and Guy Woolford as Retail Credit Company. They collected the creditworthiness of their customers and sold it to other retailers. It wasn’t until 1975 that they changed their name, which they did to help their image.
Experian is not an American based company. They are out of Dublin Ireland. They started in 1980 as CCN. In 1996 they acquired TRW Information services, which is a subsidiary of TRW. TRW is a conglomerate that included defense, which was acquired by Northrop Grumman. These are very strange connections for a company that keeps track of your spending habits.
Transunion is the third main company. They started in 1968 as the parent holding company of Union Tank Car Company. They collected business intelligent information about consumers. Then they acquired Credit Bureau of Cook County a year later and the business went from there.
It is funny that even though these companies have been around for so long it didn’t really seem that they were used as much as they are now. Looking back I personally can remember an increase in the use of credit scores starting around 2000 for more and more industries. It doesn’t make any sense that your car insurance should be based on your credit score. After all, if your car is parked in a lot while you are in a store what does that have to do with credit? If you have bad credit it doesn’t mean that you will drive bad and hit someone. There is just not a correlation that I see, except that they can charge you more.
Costing you more
Keep in mind that this is just my opinion, but I see the credit industry that you can’t get out from as a way to get more money out of you. Think about it. If you don’t have a good score you will pay more just about everything. Then if you want to get a mortgage, car loan or even a job they will check your report. Usually, there is not a chance to even explain what is on the report. Within the last 15+ years or so there has been an increase in the services that will monitor your credit and get your credit scores for a fee. They make you feel like you need it and if you don’t you will have something bad happen to you.
Yes, there is an increase in the ability of someone to get your information and wreck your credit and cause you nothing but headaches. This does not mean that it will happen to everyone and I don’t know if it justifies another monthly payment.
Do what you can
I am nowhere near being away from the banks and need for using credit. That means that there is still going to be a reliance on the scores and reports for now. I am working on getting the debts fully paid off. That includes credits cards, mortgage, and car loan. The day will come when it will be gone and there is a nice cushion I want to get away from the whole credit thing.
I would love to see the day when I don’t need to rely on the scores and reports. There will a freedom from the algorithms that don’t tell the whole story and only cost you more money.
In the meantime, there is really nothing you can do about this information about you that is out there. The best way to deal with it is to play the game. So you aren’t overcharged and disenfranchised keep your score high. Maybe one day we will have more control, but that day isn’t here yet.
