Is Credit Reporting Going Too Far?
MIAMI (CBS4) – As a recent college graduate, Courtney Hall is worried about building up her credit history.
“It’s very important to keep up with my credit cards, monthly payments and college loans and with all the bills…trying to make sure they’re all paid…it’s not easy,” said Hall.
Not easy now, for her or anyone else. As CBS4’s Chief Consumer Investigator Al Sunshine found out, credit ratings are evolving into “Core Scores”… including information that digs deeper than ever into our payment history.
It follows years of banks losing billions in loans during the recession and needing to dig a little deeper into our credit, including how we’re spending our money.
“Utility bills, rental payments, parking tickets, these are all things they are looking at now in addition to the regular credit rating data. They are very nervous researching borrowers backgrounds now, before actually lending money,” Howard Dworkin of Consolidated Credit told Sunshine.
Consumers are split on whether it’s a good thing or not.
“I don’t think they need more information about us,” said one consumer.
“It’s not really fair,” said another.
“I guess if they had more information… in a way it would benefit me,” said a third.
Core Logic, the financial data cruncher that is expanding its background checks acknowledges the extra information could hurt some people, while helping others.
The company would not agree to go on camera, but in a written statement pointed out that “borrowers who would typically have insufficient credit history in traditional credit reports, could now have new opportunities.”
Credit expert John Ulzheimer agrees. “The addition of this type of non-traditional information is going to help some people have a credit report who have never had a credit report before.”
But attorney Chi Chi Wu with the National Consumer Law Center sees it a little differently. She’s concerned that people who had legitimate reasons for not paying certain bills will be penalized, making it even harder for consumers.
“If there are mice running around, if you don’t have any hot water, you’re allowed to not pay your rent,” explained Wu.
And borrowers won’t even know what lenders are using the new core score. So what can we do about it?
“Consumers need to take responsibility for making their payments in a timely fashion. Otherwise it’s possible Big Brother could be watching. You could be turned down for a loan and you may not even know,” Dworkin told Sunshine.
The data for the new Core-Score comes from public records. That’s why it’s more critical than ever to double-check your credit report, try to fix any errors and work with your lenders or creditors if you have any problems keeping your bills as current as possible.