Individual Financial Governance and Privacy Act sign now

INDIVIDUAL FINANCIAL GOVERNANCE AND PRIVACY ACT II

We the undersigned are in strong protest of the current Fair Isaac Credit Monitoring System and seek to create a system by which a citizen will be able to calculate his/her own credit score based on each credit action, deal directly with credit institutions eliminating the need for arbitrary institutions, such as Experian, Equifax, and TransUnion as a middleman, or any other arbitrary institution, and have complete access at all times to one's own credit report. A credit report is an individual's financial record, a private document, by which the privacy thereof is protected by law. Experian, Equifax and Transunion owners and affiliates are engaging in fraudulent practices by charging consumers for credit scores that, unknowingly to the consumer, prove to be different than those run by mortgage companies and other financial institutions and therefore are false, resulting in the consumer fraud. Furthermore, the current secrecy of the scoring system is in direct violation of an American citizen's right to due process and protection under the law. The Fair Isaac Credit System does not allow for checks and balances, which is the construct of our Constitutional Government. Finally, this credit system fails to educate and enlighten its citizens, but rather keeps its citizens in the dark, helpless and ignorant on the subject of credit and financial matters, and even more disturbing and disconcerting, allows for individuals and corporations to financially benefit, exploit and prey on confused and helpless citizens through programs that promise credit repair. A citizenry that can directly monitor their own financial actions will be better able to learn from their actions and will be empowered to improve their financial health. Creditors should send their credit information to a Federal Data Base from which a consumer has access through a private password to their credit report, as one has access to his/her banking information. The consumer should be able to monitor their report through a system of scoring that is direct and easy to check for errors. Reinstituting the constitutional right of our citizens to Individual Financial Governance and Privacy will aid the economy through a check and balance system that insures accuracy, speedy resolve of errors, and ethical business practices.
Below are the irrefutable problems and injustices of the Fair Isaac system:

1). Score Monitoring:

A). Engaging in creating products for profit that are useless and misleading to the consumer. The credit agencies continue to roll out new products, such as Vantage Score that are inaccurate and so varied from other scores that it's purpose is not valuable to the consumer, but more egregious forces the consumer to spend even more money in his/her search for the most accurate and valid score. The citizen is not able to access his/her score without first writing to some institution, by which they must pay a fee to retrieve their score. This fee can vary as much as can the score can vary. Fees are from 6.99 to 49.99 and higher depending on the product. The consumers' score may vary as much as 100 points or more depending on the agency by which one purchases his/her product. And even more disconcerting, that score can vary within an agency depending on the agencies, or they agencies themselves term as products. Each agency has more than one web page (product), or business affiliate to sell their product. Each of these are designed so that the consumer can find what they believe to be the most accurate source, but it is
just a clever way for the three major bureau's to make a profit on the consumer by creating multiple sites to sell the same useless product: THE CREDIT SCORE. Transunion alone and in affiliation with Mightynet, and Equidata own Creditreport.com, Truecredit report.com, Freecreditreportinstantly.com, My3creditreports.com, Privacymatters.com, Free3creditreports.com, Gofreecredit.com, Annualcreditreport.org, Freereportcredit.com, and Creditpm.com. Experian owns Freecreditreport.com, CreditCheckTotal.com, and Creditreporting.com. Equifax owns, or in affiliate with Equidata, Mightynet and Transunion owns Creditreport.com, Identityguard, Equifax.com, and MyFico.com With so many different sites and so many different scores, it is not only confusing to the consumer, but it temps and sends the consumer on a mission to try a different site to get a different score to see which score is the most accurate, or correct. One's credit report, like one's bank statement, is a financial record that is the right of the citizen to have access to at all times and possess at all times immediately and without charge. The consumer has a right to scores that are exact and based on accurate data.

B). The most fraudulent practice is Equifax, Transunion, and Experian knowingly selling consumer scores that differ from scores run by the banking institutions. A consumer sends money directly to these bureau's requesting their credit scores rightfully believing that the scores coming directly from these institutions will be accurate, only to have a banking institution run their scores and find out that their scoring system is different, and the money spent by requesting the scores from Equifax, Transunion and Experian was throwing money away. This is directly related to another practice in the scoring system called the "inquiry". Each time a lending institution runs a consumer's credit it triggers an inquiry, which in turn lowers your score. So, if the only way a consumer can get an accurate score is by having a lending institution run their credit it also backfires on the consumer creating a decrease in their credit score. This is a direct violation of consumer protection laws.

C). A citizen has no way of knowing how much his/her score will go up, or down with any given credit action.

D). A citizen does not know exactly what action, or sum of actions will create a score change. One can have no change to his/her report, but his/her score may go up, or down due to some mysterious collection or compilations of credit actions, seen or unseen. Even an attempt by the citizen to acquire credit leads to a credit inquiry, which leads to a drop in one's score. The very institutions that benefit by charging higher interest rates are in complete control of the scoring system.

E). It takes far too long (60 to 90 days) for a citizen to correct errors on his/her report once discovered. A citizen should be able to check for alerts to one's credit report without paying an arbitrary institution for that privilege, as it is a constitutional right. A citizen should be able to correct his/her own report by dealing directly with the creditor and only the creditor, not some arbitrary agency like Experian, TransUnion, or Equifax. There should be a direct relationship and a private and single relationship between creditor and debtor.

F). A practice known as Rapid Rescoring by which a credit report score is updated within 72 hours is available only to lending institutions and their agents, whereas a private citizen's request for a rescore can take up to as long as 60 to 90 days, violating a citizen's rights to request and receive their rescore in a timely manner, and address their reports directly.

2). Checks and Balances:

A). Credit scoring is in the hands of the credit bureau's and banking institutions and the citizen has no way of disputing his/her score, or checking it for errors. The credit scoring system is a mystery to the citizen, and the citizen is dependent upon the credit institutions for accuracy and fairness. The citizen has no rights, and he cannot be assured that the credit institutions are acting responsibly and ethically if he/she cannot monitor his/her own score.

B). The Fair Isaac system leaves far too much room for errors and gives the credit bureau's and banking institutions far too much power.

C). Under the Fair Isaac system, the FTC will not attempt to resolve a complaint from a single citizen, but will only address a class action lawsuit, leaving the citizen with NO REPRESENTATION.

D). Fair Isaac completely takes the control of individual finances out of the hands of the citizens. The citizen has no control over his/her score, as he/she is not privy to the scoring tool, as such is necessary for allowing the citizen to monitor his/her report and check for errors. It is unconstitutional to create a system that directly affects a citizen's financial health, and not allow the citizen to monitor his/her own records.

E). The individual American citizen should own his/her report and the policy effecting a person's credit score must represent the right of the individual affected and not an arbitrary agency.

3). Unreasonable and malicious Credit Reporting:

A). Civil Code 1785.26 requires that a consumer be notified of any derogatory reporting to the credit bureaus 30 days prior to this action. This notification must be by first class mail. There currently is a practice of third party institutions throwing a net out and selling any outstanding credit information to the Credit Bureaus and completely bypassing the 30 day consumer notice. There is a reason that the law provides for this notice, as it places the consumer in a check and balance situation as he/ she can check and respond to any errors or inaccuracies that may have occurred. The current practice of third party institutions selling this information to the bureaus is unconstitutional, but because the whole system is not being fairly monitored this practice continues. This is just another result of the consequences of the government turning a blind eye to the ills in this system.

B). The current practice of Banking institutions reporting 30 day lates to the bureaus and knocking a score 50 to 100 points, and then leaving it on your credit report for seven years is not a reasonable, fair and accurate way to assess one's credit worthiness, or credit risk factor. The harm caused by this practice is not only felt by the consumer through higher interest rates, but it is also borne by the Banking institutions who no longer can give loans to this consumer because they do not meet the criteria. When the banks were lending without concern, they made a lot of subprime loans and they actually benefited from a consumers low credit score by charging higher interest rates, but now that lending is tight the banking institutions are suffering under the Fair Credit Act as the criteria for lending requires high scores and the practice of reporting a 30 day late to the bureaus is making it difficult for the consumer to qualify for a loan. So, as much as the banks would like to loosen up lending again, they are in a catch 22 situation because more Americans are hard pressed to have credit scores that qualify them for a loan.

C). Only two consecutive 30 day lates or a 60 day late should be reported to the credit bureau. One 30 day late does not fairly monitor the credit worthiness of a consumer. To have a score drop of 50 to 100 points causes harm that is not indicative of the action.

D). Under the current system a negative mark on your credit report will stay on for 7 years. This length of time causes far too much harm to the consumer. It is important for the solvency of this country that consumers are able to have buying power. To punish a consumer for nearly a decade for what can amount to a couple of setbacks in the life of a good tax paying citizen is unusual punishment and causes irreparable harm to both the consumer and lending institutions. A negative credit action should only be on a report for no more than 3 years. This gives the consumer an opportunity to appreciate the magnitude of the financial harm caused to the creditor, as well as allows the consumer the opportunity to recover from their mistake in a reasonable amount of time. If a consumer continues to demonstrate irresponsible behavior his/her credit report will continue to have a low score, but if a consumer becomes more conscientious of his/her finances then 3 years is a fair enough period to monitor this for the creditor. Within 3 years a creditor will be able to assess if a consumer will continue to be a risk, or if they have proven a pattern of paying their bills on time.

E). Inquiries. An inquiry can lower a credit score as much as seven points per inquiry. The consumer should have access to his/her score at all times eliminating the need for inquires. The current practice of docking a score for a credit inquiry must cease. This is an arbitrary event for which the cause does not have any proven direct correlation to a person's credit worthiness. A score should only be based on specific credit actions that are concrete such as a 60 day late, or a collection account. The current ideology that the more inquiries made points to the poor credit worthiness of the consumer and thereby the consumer's score is further docked lends to the practice of beating the horse twice. A consumer's credit score should just be based on their credit actions and a consumer's score should not be docked for a credit inquiry by a creditor. In fact, in a constitutional system, the consumer will have access to his/her score continually and at all times and there will be no need for the inquiry.

Noreen Cardinale, Author of Bill

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