Proposed Changes in the law regarding credit reports and scoring

• Reverse Credit Reports The bureaus should be keeping track of their own customers. When a credit report is requested, the Victim could be emailed or faxed a performance report on the company submitting the request. Data could include statistics on the accuracy of that companies credit reporting system, the number of consumer complaints/challenges, and a history of consumer litigation against that company and its officers. Consumers could then decide if they want to risk dealing with a company that may make incorrect reports. Each credit report entry "tradeline" should include an accuracy rating based on the company reporting the data, allowing reviewers to evaluate how accurate a particular item is likely to be.

• Electronic notification options. Citizens should be able to control access to their personal data via the internet. When a company wishes the privilage of accessing a credit report bureaus could send email to a preauthorized address for each consumer asking for authorization or action if the consumer objects. If the consumer does not grant permission to a legitimate request THEN adverse credit actions could be taken.

• Limit Political Contributions Banks and other regulated institutions have special limits and reporting requirements on their donations to political causes. Credit Bureaus have no such controls even though they represent a far greater danger to overall financial safety and political integrity than the banks.

• Prohibit Special Reviews. The credit reports of elected and appointed officials should receive the same treatment as other Victims. Special treatment distorts officials view even if they do not know their report has been screened.

• Sunshine Laws The public needs web access to FTC complaint and enforcement statistics. Credit scores (FICO et al.) should be instantly available. Source code for scoring and retrieval systems needs public scrutiny. All databases used in scoring should be listed on request. Citizens need to know about bureau political donations at all levels. Banks and bureaus should not be allowed to hide behind "non-disclosure" or other secrecy agreements when they are caught breaking the law.

• Primary Sources Only. Items on a report should originate only from original creditors. No secondary sources such as lists from collection agencies or contingency attorneys should be allowed. A large percentage of the typical credit report comes from second and third tier sources who have no knowledge of the transaction. Secondary sources are now even allowed to "verify" upon challenges even when they have no records and have a financial interest in keeping untrue negative information on a report.

• Prohibit Inquiry disclosure to all but the consumer. Some bureaus outright lie to consumers, saying the law requires them to disclose inquiries to everyone. It does not. Inquiry data strongly discourages comparison shopping and has little other value. Notations such as "for Collection Account" are already illegal but widely used anyway.

• Litigate or Remove. Victims should be able to force the "creditor" to prove his case in court or remove it from your credit record. Anything short of this substitutes the punitive power of a credit report for a proper trial.

• Prohibit Cross Collections. Mortgage companies often require all items on a report to be paid before granting a new loan, regardless of the validity or age of the claim. This is an outrage and often involves federal agencies.

• Time Limits and States Rights. Negative reporting should be limited to the time frames adopted by the states for bringing a civil action (4 years is typical). The only purpose of reporting beyond this limit is to punish without benefit of trial. A credit report should not substitute for the civil courts.

• Basic Life Function Exemption. The most frequent suggestion we receive is to exclude medical, dental and utility bills from reports. The credit report industries own surveys show more than 30% of the populace has foregone some services because they wished to protect their privacy. Many types of medical bills are nonrecurring and reflect nothing about credit worthiness. This is devastating to senior citizens who have lost a spouse and do not have 7 years to waste apologing because their departed loved ones were mortal. Eliminating reports of this nature unless a judgement had been granted would be a fair balance.

• Credit Scoring and Consumer Comments. Banks and others should be barred from taking adverse action based on credit scoring systems where a credit report has an attached consumer statement. While adding a consumer comment has some therapeutic value to a credit reporting victim, there has been little practical value in the practice for several years now. In most cases the actual credit report is not even seen by humans. With more and more automation it is cruel to hold out the "consumer statement" as a defense without mandating that it at least be read. Citizens should have a right to at least a list of every database accessed by credit scoring systems without exception.

• Inquiry Database Updates. Inquiries or challenges by the subject of a credit report should not be used to update a credit bureaus records. Victims who exercise their right to obtain copies of the reports or challenge errors are "fished" for information which is then entered into various databases and appended to the credit report. Most requests for "proof" are just this type of fishing expedition.

• Hidden "Fraud" identifier strict enforcement. While it is illegal to report information over 7 years old, bureaus and scoring systems routinely avoid the law by using markers identifying the existance of such data and declaring it is not part of the credit report. Bureaus or scoring systems should also not identify by code or otherwise any item of information as "fraudulent" or similar unless it has specific information that a particular applicant has broken the law. Citizens who receive magazines at any post office box, drive a particular model car, own a home once used as a business address or engage in other innocent behaviour are now flagged as fraud suspects without their knowledge and their score is adversely affected. The coding is not given to the consumer even under direct questioning by the Victim and no agency reviews the source code for these "predictors".

• Level the Playing Field. Bureaus have special exemptions to libel laws that are not enjoyed by those they victimize. The same standards should apply to both sides of this political debate.

VCR Homepage