Thursday, March 12, 2009

Credit Stupidity

So this morning, as I do every 90 days, I got an updated copy of all three of my credit reports; along with an estimated FICO.

I do this every 90 days, because since 1994 I've been having issues with fraud and identity theft. Those issues got MUCH worse after I moved to Ireland in 2000.

When I came back from Ireland, I found that two cars had been bought using my info, according to the SSA 18 different jobs had shown up under my SSN during that period, and someone in Kentucky had actually managed to get a mortgage with my info.

Of course, by then I was a long term hand at disputing this stuff, and getting it resolved; so I stuck in right away, and got about 3/4 of the stuff resolved within a few months.

That last 1/4 though, it's tenacious.

The problem, is that by the time they show up on you credit report, often the debt has been resold to a third party.

So you get the thing disputed and taken off your credit, and instead of purging the bad debts from their databases as they are supposed to do, the many many unscrupulous debt buyers will bundle and repackage all their bad debts, and resell them on to someone else for pennies on the dollar; who then reports the debt to the credit agencies as if it were new and valid...

"So nat'ralists observe, a flea
Hath smaller fleas that on him prey,
And these have smaller fleas that bite 'em,
And so proceed ad infinitum."

Which is why every 90 days you have to check; to make sure that some false bad debt hasn't shown back up.

So a couple weeks ago, out of the blue and for no reason known to me (although I understand they've been doing it a lot) Amex cut my credit limit in half; down to the amount of my outstanding balance.

Obviously I was somewhat irritated by this. After all, nothing in my credit had changed...

Or at least that what I thought until this morning.

So two of my credit reports were relatively normal this morning. The most accurate report (in my case Equifax, that's who I work with most directly because ; and because they have the easiest dispute process) showing nothing but the two actual negative accounts I have on file (both small collections under $100 from more than three years ago. I moved and forgot to pay two small final bills until they caught up with me at my next place a few months later).

The only inaccurate info on that report was that it showed some of my credit card balances as much higher than they were; and that for some reason a few months back Equifax forgot about some of my older accounts, which reduced the length of my credit history to under 5 years (this is a constant issue with Equifax. They do the best job of purging bad data, but they also purge good data).

Estimated score before the corrections: 659. Estimated score after corrections, including the updated credit card balances: 719

My Experian report showed two new small fraudulent debts that I had never seen before; and one that was back (the fraudulent car loan from 2000). Of course even if the car loan wasn't fraudulent, it's 9 years since it defaulted, and therefore should be removed from my records.

Now I've been dealing with this particular one for years. I had the original lender strike the records, and now it's been sold on to I believe it's the sixth debtholder at this point?

It also had me down for a tax lien that is actually my fathers; which I've successfuly disputed in the past, so that really should have gone away permanently (the government isn't supposed to resubmit bad data); btu I'm guessing some report didnt get made somewhere and so when the .gov drops its list on the bureau every 90 days, it just repopulated.

Anyway, I disputed all the fraudulent new ones with the debtholders (successfully. All agreed to take them off) and with Experian (they'll mail me in a week or two but I presume they'll pull the records, because the debtholders agreed to). I also disputed the fraudulent car loan, again, and the tax lien again.

I expect that car loan will be off for a month or three, then show up again after the current debtholder illegally resells it again.

Estimated score before the corrections: 615. Estimated score after corrections, including the updated credit card balances: 719

What really threw me though; and what I suspect was the cause for American Express to chop my credit limit, was my Transunion report.

Now anyone in the car business, loan business etc... will tell you, that Transunion is ALWAYS the worst report of the three for the consumers. They keep more data, longer, with lower standards of proof and higher standards to dispute; they always have more inaccurate data; and they have a more difficult dispute process to boot.

...But this was way over the top.

My Transunion score was an estimated 515!!! WTFBBQ???

In addition to two four incorrect/fraudulent accounts that Experian had, transunion had SIX MORE, including a second tax lien that isn't mine.

Good christ, no wonder my score was an estimated 515.

So as of now, I've disputed all of those as well; but knowing Transunion, I'm going to have to go back and forth with them over it for the next few months.

Estimated score before the corrections: 515. Estimated score after corrections, including the updated credit card balances: 719

The difference between a 659 and a 719 is as much as 5-7% on an auto loan, or two percent on a mortgage... that is, if you can get bought at a 659 (these days, that's hard). At a 615, you won't get a mortgage, and the best car loan your going to see is about 13%, and again, best of luck getting bought. At a 515, you can't get any credit at all, at any rate.

And this folks, is why you should pay the money to check your full reports every three months... Hell, I may buy one of the package deals to let me check it every month at this point.