They are a company whose sole purpose is to track how reputable a consumer is, which is entirely extrajudicial and arbitrary. How do you fine/hurt/stop something which is pure made up bullshit and had no purpose to begin with?
It is for that reason that we should be especially unhappy about the way the law handles breaches like the one that happened at Equifax. These are companies that have decided to insinuate themselves in a crucial component of the consumer finance industry, and they should be held to a higher standard than we're holding them now.
If theres a market for more detail than that, it's a bullshit market, because how that report gets generated is entirely arbitrary.
You don't go bankrupt when you are late paying back a loan or miss payments or even default on a loan completely.
There are all sorts of cases where a person is not trustworthy with money that do not show up in the public record. That's why credit bureaus came to exist, and although their business practices and data security leave much to be desired, I understand why they exist in the first place.
If they broke the contract, it's on you to bring them to court. Apparently companies thought it was to expensive to enforce contracts, so they decided to create this extrajudicial system.
My point is, if you can't physically pay your debts, you can file for bankruptcy. That is the public record.
To quote Inigo Montoya, you keep using that word. I do not think it means what you think it means.
From experience helping family members: you can be hundreds of thousands of dollars in debt before bankruptcy becomes a real option. Entire sectors of the consumer finance market are dedicated to keeping them out of bankruptcy, where they become total writeoffs to creditors. I watched creditors offer to settle mid-5-figure delinquencies for nickels on the dollar simply because that was the best they were going to get with a bankruptcy on the table.
The idea that creditors could simply extend credit uniformly to everyone who hasn't declared bankruptcy in the past is ludicrous.
Even today, people (in effect) steal thousands of dollars from creditors, essentially for sport, by exploiting the FCRA and the procedural difficulty of enforcing contracts and collecting delinquencies. The courts are not a realistic option for underwriting consumer credit.
We really should be improving our judicial system rather than letting private industry determine what we as a society should consider when someone wants to take out a loan.
IANAL but I still think Equifax itself is in the wrong. You can't expect businesses that deal in credit to skip due diligence on their customers. Equifax (and the other 2) get to define creditworthiness for all these other businesses.
They do not. The CRAs provide the information, and the individual businesses decide what their limits are. A lot of businesses standardize on FICO scores, which just use CRA data. So a business decides what's acceptable, based on the info from CRAs and the model from FICO.
For those who defend the credit history system, where was the consideration that I was mature enough to limit my spending and save for future expenditures rather than use a credit card? Where was the consideration to avoiding unnecessary risk entirely and still paying my bills?
Whenever I'm at the bank I get asked, "Have you considered taking a credit card to start building your credit?" When I patiently explain why I can't do that, their response is usually to just reiterate how important it is and how irresponsible I'm being.
I've never seen a salesperson in any other industry do this. When I ask waiters for non-pork substitutes, they don't come back with, "Listen, I know you don't eat pork but you should get the bacon anyway because it's really good."
One time the lady asked me, how they are supposed to make money from zero-interest loans? How should I know? You're the finance expert. I didn't come in here looking for a loan. You asked me!
The biggest con job on the American middle class was the 401k though, how else could people be so fashioned against their own interests than to emotionally tie their future so intimately with how the stock market is doing.
I'm not holding my breath on things changing though...
The last place I rented started the eviction process the very same afternoon the "grace period" ended -- think I was off doing reserve stuff that weekend or simply forgot -- and that caused me to not be able to move into a fancy apartment complex once upon a time (though, mostly, they were using it as an excuse to discriminate against a "dirty truck driver" who didn't fit the kind of people they wanted in their yuppie complex, which they basically told me) but my current landlord could care less, as long as you pay your rent (not necessarily on time) and don't cause any problems you're golden.
If your employer paid you late because they were "bad at paying their bills" you'd be pretty upset, as would most people.
If they fall outside of the grace period, you should have a legal means to arbitrate and make it public record.
They were also kind of sketchy when I had to break my lease because my reserve unit got called up to active duty, apparently they were trying to say I had to keep paying until my mom (who was handling my finances while I was gone) threatened to get the army lawyers after them which made them change their tune real quick.
If I, in my perpetual slackitude, can acquire all the necessary things to live then someone who does pay their bills on time but doesn't believe in credit should have no problems at all is all I'm saying.