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Can Politicians Actually Improve Your Credit Scores?

The US House of Representatives passed the Protecting Your Credit Score Act of 2020. Now it is up for a vote in the Senate. Here is what the act is intended to do:


"Specifically, this bill will create a single online consumer platform that will provide unlimited consumer access to credit reports and scores, allow consumers to initiate disputes about reporting issues, and let consumers track and protect their credit data. The bill will also increase the accountability of the three largest credit reporting agencies, Equifax, Experian, and TransUnion by requiring preventive audits to increase credit report accuracy. Further, the legislation will establish a CFPB ombudsman to increase supervision and enforcement of all credit reporting agencies."


The politicians are genuinely out of touch. Let's break it down:


To provide unlimited consumer access to credit reports - You mean a once a year free check of your credit report is not enough? That is what Congress passed in its last bill. Since when is one time a year enough? It is not enough. Unlimited access is what the consumer needs. Someone finally gets it. What are they really creating here? Almost every major credit card gives you free access once a month to your updated credit report and score. Once enough is all you need.


Allow consumers to initiate disputes about reporting issues - Said another way, allow consumers to dispute inaccurate information. That is already in place. The problem is not the process. The problem is that the consumer often doesn't have the information to prove that the item needs to be removed. The credit dispute process is likely to be as good as it is going to get. It is all about the record-keeping or lack of it.


Requiring preventative audits to increase credit report accuracy - It is as if they are going to try and "fix" the system. What if it is as good as it is going to get? The problem is not that we have a process that needs to be drastically fixed. The problem is that consumers don't and will probably continue not to be proactive with their credit scores. The Federal Trade Commission states that 21% of credit reports have errors, and 13% of those errors affect scores. Candidly, that was much lower than I thought it would be.


Join me today at 3:00 pm (CT) as I talk about developing your system to ensure that your credit score is as high as possible. If you miss the program, go to this link to hear the podcast.


Bob Brooks is the daily host of the Prudent Money Radio Show. He writes about stewardship and financial topics Monday through Thursday each week. For questions or advice, feel free to contact Bob at 972-386-0384 or bob@prudentmoney.com.