I’ve said it before (many times here too,) and I’ll say it again, the only purpose for the credit reporting agencies (CRA, in their own terms,) is to make identity theft easier and result in a much more benefit to those who are performing identity fraud. Their stated purpose, of helping reduce fraud is a farce, as they do nothing but make it easier for a bad guy to obtain credit under someone elses identity by lulling the industry into believing that they are securing the system while leaving it as wide open as possible. Who ends up fronting the bill, well, we do! Sure, companies that provide credit loose money when someones’ identity is stolen, but ultimately we pay in the form of fees, and for those of us who have our identities stolen, we pay in court costs to clear our names.

The only way to fix the problem is to remove the CRA’s from the picture. Instead, a single reporting agency should operate like the postal service handles move requests and the like. When a creditor attempts to make changes to your report, you should be notified immediately, and should be given the benefit to challenge the change, especially in the case of new credit requests. Challenges should be in the same form of arbitration that everyone else is used to. Sure, it may slow down the process and “instant credit” will no longer be available, but this is the problem…it is so easy now-a-days to find and procure instant credit that very little is done to verify that the credit is being given to the right individual and that they have in fact asked for it.

If you want any proof that the CRA’s are corrupt, take a look at the current “Fraud Watch” documentation. My social security number and name were stolen recently (along with several million others.) I put in a fraud watch with the three CRA’s, and all were supposed to, within 30 days, send me a free copy of my credit report as well as put a designator on my credit report which told creditors to contact me first before giving out credit to someone claiming to be me. Of the three CRA’s, only one sent a credit report, and even then, I was able to obtain credit without so much as a question as to my identity. When calling the CRA, I was told that the “fraud watch” was merely a suggestion, and that it was up to creditors to actually follow through with calling me. Which, according to the representitive I talked to with the CRA (when I finally got ahold of a real person, which is all but impossible,) very rarely occurs.

The system is broke, and nobody in charge is interested in fixing it, because they are making more money off of the broken system than they would to fix it…