Credit Bureaus’ Customers
Ironically, the newer system took on some of the traits of the original mutual
protection societies. For one thing, a consumer couldn’t access his/her
own credit history. Only lenders, credit card providers and other businesses
had access to credit reports.
Modern credit bureaus were created to service lenders, not borrowers. Lenders
want to be repaid, and the credit bureaus help them figure out which consumers
are most likely to do so on a timely basis.
The bureaus’ primary focus remains on serving lenders. But a number
of factors have led them to become more consumer-friendly. These factors include:
- growing concern over errors in consumers’ credit histories;
- the rise of identity theft and other fraud; and
- the Fair Credit Reporting Act.
Today, you can get your credit score, or copies of your credit reports, through
a variety of sources on-line or by mail. Plus, lenders will usually tell you
your credit score when you apply for a loan.
American consumers really began finding out about credit scoring—and
demanding to see their scores—in the 1980s. The Internet boom of the
1990s hastened this process, as more information was available in more places.
In 2000, the on-line lender E-Loan.com offered to give consumers their scores
for free, with information explaining how the score was calculated and how
they might improve it. Fair, Isaac & Co. responded by cutting E-Loan off
from its credit formulas, effectively crippling its ability to lend money.
E-Loan stopped giving away credit scores.
Next: Fair Credit
Reporting Act |
