In the United States, we think of ourselves as free to achieve the American dream without anyone preventing us from doing so except ourselves. While that may have been true in the past, it certainly doesn’t apply today as the roadblocks to success in America are steep and, in some cases, unsurmountable.
You Have To Worry About Your Financial Decisions
Surprisingly, it isn’t the government that’s stifling the American spirit and can-do attitude of most citizens. It’s a far more sinister force, an unseen entity that literally has the power to stop people from renting apartments, buying cars, and even getting employment. A force so powerful that it can penalize you for doing the right things. Imagine shopping for a good price and being told to stop because you will be penalized if you continue looking for a good deal. Insane, right?
We Control Your Financial Lives
Now, imagine in America the concept of being GUILTY until proven innocent. “Oh, something like that can’t happen in The United States,” you might say. But it’s true. It happens every second of every day in this country because we are all victims and beholden to three entities that control every financial move we make. Transunion, Experian, and Equifax, the nation’s three credit reporting agencies, control every facet of our financial lives.
A Good Deed That Gets Punished Every Time
Let’s say you are in the market for a new car and start shopping for the best deal. You also want to finance this vehicle through whatever dealership you ultimately choose, but you make the mistake of allowing each dealership to pull your credit and see the best rate they can get you.
You are not allowed to do that. The credit agencies will penalize and drop your credit score because they don’t want you to shop around. That could be a warning sign that you are becoming a high risk. Seriously? How absurd is this logic? We cannot shop for the best rates or prices without having some faceless arbiter pass judgment on our motives. Can you say Big Brother?
Get It in Writing
Imagine a circumstance where you are renting an apartment, and you are just days away from your lease expiring and moving out. Then a sudden freeze (AKA The Texas Freeze) hits and, the pipes burst from freezing – flooding your living space making it unlivable. You obviously bring this to the attention of the apartment manager, who agrees in writing to waive the last few days of your lease, and you move out believing that all is well.
To Avoid Surprise Bills
A few months later, you’re confused when you get a bill from a company you never heard of before. Why? Because the apartment complex was sold to another entity that took all their previous debt and is coming to collect those debts. They don’t care what agreement you had with an apartment manager! They say you have a balance, and they want to be paid now for the few days the apartment was uninhabitable, or they will send it to collections. You think this is ridiculous and move on with your life, knowing that you are in the right and have paperwork to prove it.
It Ain’t Over, Till It’s Over
All seems fine until six months later when you get a default notice from a collection agency claiming you owe the balance of your lease that was waived. It takes 30 seconds to realize that you’re dealing with a rather unscrupulous character, a collection agent who crawls under a rock every night. You tell this individual your story and that you refuse to pay. He, in turn, hangs up the phone and reports you to the credit gods. You will now be condemned to credit purgatory.
What About the Truth?
Suddenly, your credit score drops 60 points, and credit cards notify you that they’re reducing your limits. You panic but know that you did nothing wrong and believe in your heart that a simple phone call to the credit bureaus will straighten everything out.
That’s Not How It Works
Sorry, too bad for you. The agencies won’t even talk to you. You are of no concern to them. You have been reported as delinquent or non-compliant; therefore, you are now less than human in their eyes. You are now a risk that will be judged accordingly.
Guilt by Association?
For goodness’ sake, even the Salem witch trials afforded you a trial! In all fairness, they permit you to write a statement and post it on your credit report. So, what? Do you think for one second a potential lender will look at this statement and say, “Oh, what good person, they say all this bad reporting is nonsense and not to be believed. Get real.
No Way Out!
The only way the agencies will remove a negative report is if the collection agency itself asks for its removal. A business you have never heard of, over a bill you don’t owe, has just made it impossible for you to borrow money, get a loan, and maybe even rent an apartment.
It Happens All the Time
And lest you think this an obscure one-in-a-million occurrence, think again. Situations like this happen to millions of Americans every year, and it can take months to resolve these cases because you are guilty till proven innocent. Yes, you can report this to the Fair Credit Reporting Bureau, which makes lists of bad actors and might even take someone to court for egregious behavior, but so what? In the meantime, you can’t even function in society.
The Good, the Bad, and The Ugly
Yes, it can be argued that many people with bad credit routinely game the credit system for their own purpose and need to be scrutinized. But for the most part, they are heavily penalized with high interest rates, poor housing, and few options other than bankruptcy to improve their lot in life. However, life is uncertain, and events such as prolonged hospital stays, unemployment, pandemics, family emergencies, and businesses that routinely lie to coerce payments are also facts of life.
Evil Credit Reporting Companies
The three credit reporting agencies, along with debt collection companies, have made many consumers’ lives a living nightmare. The Fair Debt Collection Act isn’t as much a consumer protection as it is a gateway for punitive reporting to the nation’s credit bureaus. We are all frightened that one judgment error can negatively affect our credit scores.
Give us a Chance
The system needs to change. Consumers need a level playing field where their credit score increases when they shop around, not decreases. We need some kind of arbitration in debt claims before a credit score can be impacted, and collection agencies must be stripped of the power to unilaterally report debt from third-party entities. It’s completely unfair to the consumer when trying to defend the actions of someone or thing that is no longer in business.
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