I have to say, I truly enjoy everyone’s take on the world of credit. I read so many blogs and articles; it is hard to understand what is true and factual. I have heard from various types of people that claim to have the most up to date systems and the best "process" in the industry. This will be short, because I think it is important to know the truth when it comes to these comments. The phrase "Buyer Beware" has never been truer.
First of all, understanding how credit came to play is of key importance when trying to understand the methodology of how we got where we are today. So let me share with you how it all started!
The first credit card was issued in 1951
Credit was first used in Assyria, Babylon and Egypt 3000 years ago. The bill of exchange - the forerunner of banknotes - was established in the 14th century. Debts were settled by one-third cash and two-thirds bill of exchange. Paper money followed only in the 17th century.
The first advertisement for credit was placed in 1730 by Christopher Thornton, who offered furniture that could be paid off weekly.
From the 18th century until the early part of the 20th, tallymen sold clothes in return for small weekly payments. They were called "tallymen" because they kept a record or tally of what people had bought on a wooden stick. One side of the stick was marked with notches to represent the amount of debt and the other side was a record of payments. In the 1920s, a shopper's plate - a "buy now, pay later" system - was introduced in the USA. It could only be used in the shops which issued it.
In 1950, Diners Club and American Express launched their charge cards in the USA, the first "plastic money". In 1951, Diners Club issued the first credit card to 200 customers who could use it at 27 restaurants in New York. But it was only until the establishment of standards for the magnetic strip in 1970 that the credit card became part of the information age.
The first use of magnetic stripes on cards was in the early 1960's, when the London Transit Authority installed a magnetic stripe system. San Francisco Bay Area Rapid Transit installed a paper based ticket the same size as the credit cards in the late 1960's. The word credit comes from Latin, meaning "trust".
Cheques (checks) came into use in 1875.
(This exert was copied from the web and if I knew where it originated I would give the proper credit. I don’t not want anyone to think I would plagiarize!)
This is a unique concept when you really look at how we have evolved as consumers. The modern day methods that we use today are no different than that of 1000 years ago, except that technology has caught up and now we can purchase with "NO MONEY DOWN" or "SMALL START UP FEES!"
So let’s get to the basics. My company has been in the business of 13 years. We hired employees that work for the 3 major credit bureaus, but soon found out we knew more than them on the inner workings. This may come as a surprise to you, it sure did to us. What we did learn is that in order to change the way we think, we cannot be shackled by the way "Big Business" has conditioned us. Let’s start off with the "Dispute Resolution Managers" that come from the bureaus:
- The credit report that is used in today’s economy is not the credit page that is seen by the bureau employees. This report is a condensed version of what information the 3rd party affiliates (credit report providers) provide the repositories from the tape files that are downloaded.
- Funny that we call them repositories, since all they do is warehouse your information and resale it for profit!
- The employees are timed on how long they "service" a file. They process THOUSANDS of cheesy dispute letters daily.
- Since they are timed, the dispute cannot be thoroughly investigation based on anything but the interpretation of the investigator. This means when that credit repair company sends a letter in, it is interpreted by the employee as to what the dispute is.
- This is why you may get "frivolous" remarks back from the dispute request.
- Any letter sighting excerpts from the FCRA are often laughed at and sent into a department that handle "Credit Repair Company Disputes" and your account is flagged.
- Any letters coming on attorney letterhead is forwarded over to special assignment team in their legal department to be handled.
- All agents know the law and are smarter than most in what it says. If they can’t properly determine the basis of law behind a dispute, one of their multimillion dollar attorneys can interpret it. And if the law is not in their favor, they can always lobby for it to change and stick the money into big politics for it to happen. The nation’s economy is founded on credit and debits. Debt is a way of life and that is what banks want you to do....Engage your animal instincts of instant gratification and CONSUME!
Moving beyond all the controls that could destroy the dispute sent in, the agent then places you "claims" into electronic format on the system and send it through "E-Oscar" an electronic system that the creditors and the bureaus use to determine the dispute. Now, I want to take a step back for a moment and reiterate something, if the investigator looks at a letter that reads "Not Mine", they are only going to go to a subsection of their system to verify whose name or address is on the information reported. If there are any similarities, they made do one of two things, ask for supporting documentation via letter or deny the dispute as frivolous because the information says different. I know this is not fair, but when is life ever fair?
So, if you can make it past the gate keeper and processed through E-Oscar, then you may have a legitimate chance of a permanent removal. But since the repositories only have to adhere to "Reasonable Procedures" to insure accuracy, then what exactly are those procedures?
Since Experian is the most difficult of the 3, don’t let anyone tell you differently, and I have internal documents that were provided to us by one of those former employees, it is pointless to send in a dispute without first gaining your supporting documentation from the creditor. Let me give you some facts:
- An account that is derogatory for 7 years from the DLA (Date of Last Activity) can be removed in 6.9 months from the original creditors DLA, unless you made payment to the collection company that holds the debt.
- Most creditors have a "Write Off" balance once the account is under $50 and closed. THIS DOES NOT MEAN THAT YOU DONT HAVE TO PAY IT OFF!!!!!!!!!!
- Reasonable procedures are not set by the bureaus, but by the creditor.
- The bureaus have a policy to assist in the proper reporting of information to best support the creditors claim and not the consumer. (Remember, we get it to dispute the information for free, but the creditors have to pay to report! Money makes the world go around, so they are going to support their paychecks before the consumer.)
- The repositories are FOR PROFIT organizations that sell your information to other companies. They are just one HUGE lead generation machine!!!
- Government oversight is given to the FTC, but they give the State Attorney General the responsibility to pursue claims and unscrupulous behavior as well as licensing authority. This is why people who say they are licensed and bonded in all 50 states can operate under the laws. The state in which the actual work or subsequent offices are held is the State in which you have to be licensed. In our case, we have offices in Florida, Texas and Tennessee. So we have to be licensed and bonded in those states, however all work is done at our processing office in Texas and that is whom we are governed by. So we have to show the other States that we are in good Standing with Texas and provided them with the proper monies to become a valid "Credit Service Organization" under the Credit Repair Organizations Act and hold a Credit Service Provider's bond.
As a consumer you have the full weight of the SYSTEM against you and that is why there are tens of thousands of so called "experts" out there. Heck, credit repair books at Amazon are one of the hottest selling books with over 1600+ books. There are over 400,000 + books on credit management! Why, because it is actually a legitimate service that the editors and publishers believe to be helpful.
I hope this information is helpful, after all it is FREE!
Knowledge is Power! Financial Literacy is the outlet!