Why do the Credit Bureaus want consumers to have "BAD CREDIT"?

The credit bureaus want consumers to have "bad credit"?

Now, right off the bat this may sound like a very strange statement. I do agree that it resonates strangely with me, so I understand that it can make people feel that way. In this blog post I will prove to you that this is true.

A lot of people think that the three major credit reporting bureaus are somehow tied to the United States government. People tend to think this because of the use of a social security number to obtain their credit file. The credit bureaus operate in what's called a deregulated market, and there is no one to overlook the accuracy of the information they report. The reality is, when it comes to dealing with the credit bureaus, people are on their own.

Experian, Transunion, and Equifax, are extremely large, privately owned, moneymaking institutions, that operate completely independent of one another. These companies make their money, by selling credit reports on the behalf of consumers. You would think because this is their scoring system, that they would want people to have good credit, but that would be bad business for the bureaus.

For example. When two people walk onto an automobile dealership lot, there are two different stories here to be told. One person is going to have a credit score of over 735. The other person is going to have a score around 580. There is no doubt that this experience will be quick and easy for preferred borrower with a 735 score. That person can take any car on the lot, with no money down, a low interest rate, and preferred terms. That borrower leaves the car lot 45 min. later in a brand-new automobile. He walked in, they ran his credit once, and away he went. The credit bureaus just sold a $50 credit report. Now let's talk about our other friend who went on the car lot with a score of 580. This person picked up the same car the other one did, however when it came time to finance the car the situation was different. He could not qualify for that automobile after they ran his credit, in fact the car dealer doesn't know if he can qualify for any of them. Out of desperation to sell a car, the dealer will seek out financing by showing the credit file to different banks. Every time this happens, the credit bureaus sell another report. Trying to keep the customer on the lot they will run credit again, and again, and again. Every time they run the credit the bureaus are cashing in.

There is big money to be made from bad credit. The problem is the wrong people are making it. This is why my company exists, because the credit bureaus will make it as difficult as possible to improve your credit. We have a method of working with their system, to create the most accurate credit reports a consumer can have.