From what I've been able to discover is that after the Federal law went into effect in which required Transunion, Equifax, and Experian to provide 1 free credit report annualy to the consumer regarding access to their own credit report that being made available free of charge.
The three major credit reporting agencies conspired to create a connective database of access to a monitoring service via a small fee charge to make more money.
This is why the CIC is used in all credit monitoring services it is basically Carrier Identification Code, A CIC is a unique system of access through an identification code that is assigned to an account holder for use with Feature Group B and/or Feature Group D switched access service. That way as a consumer signs up with a service that identifies which credit reporting agency receives the money.
While it is highly likely that the three major credit reporting agencies have contracted the monitoring services out to either a created subsidery, or other third party, they are still making money by reporting changes to your credit report to the third party.
This service however could just as easily have been provided directly to the consumer by the credit reporting agency, and lowerd the cost of the service, but of course that would add to much advantage to the consumer, and control of a consumers credit monitoring of their own reports.
What is wrong with the current system is that the three major credit reporting agencies obtain your account information without you requesting an account to be opend, they then sell your name and address to creditor's (though you do not have any bussiness association with the credit reporting agencies) in which the creditor's provide a minum criteria, once an account meets the criteria set forth by a creditor, that information is then forwarded to the creditor, and the consumer is then bombarded with pre-approved credit offers.
All the while the three major credit reporting agencies are limiting consumers with only 1 report per year, which is Federally mandated by Congress, while alot can happen in that time period, nearly 78% of all households in America are now connected to the internet, internet access costs the reporting agencies very little for a text file of a consumer's credit report, so it would not cost the reporting agencies much more money for allowing consumers access to their report at least once a month.
Under these reporting monitoring services the consumer is only alerted to certain changes in their credit report, in which the consumer then must purchase their full report which is much higher than normal bussinesses, in order to find out why their credit has changed whether for good, or bad.
It is the whole system that is unfair, the fact that the scoring system that is currently used the Fair Isacc is not fair at all, as it will not allow a credit score to stay consistent without the consumer having monthly access to their accounts.
As an example if one has a credit score of 720 that is considerd to be better than average, so a creditor may issue you a higher credit limit, with a lower intrest rate, because you are not a high risk to the creditor.
Now let's assume you have 4 major credit cards each having $5,000.00 credit line, so you have $20,000.00 of credit. Let's say you use just one credit card for most of your purchases, because the intrest rate is the lowest, and other added benefits like quick posting of your payments to your account, and you usually carry a balance of 70% of your line of credit for that card $3,500.00.
Now if you do not use the other accounts a common sense would dictate, that maybe you dont really need four accounts and perhapes youll cancel two of them, and keep the other two. The creditor's extend credit but perfer that you only use a maxim of 30% of your available credit line, while you have $20,000.00 of available credit a 30% of your credit line would be that you can use up to $6,000.00 at any one time, but let's say you cancel two of the cards, that now reduces your debt ratio by $10,000.00
As a consumer you would presume that the temtation is gone because you will not have access to more debt temptations, truth is it can actually hurt your credit score by reducing the amount of safe debts, to half of the available debt the creditor's would feel confident in granting you that amount would be reduced to the then current amount of 30% to $3,000.00 of debt.
But you already have a $3,500.00 balance so youve exceeded a safe zone, which may meet the criteria of the creditor to increase your intrest rate, when such a change is done with your credit, the scoring system o0nly gives scores to the creditor's therefor a reason for creditor's to decrease your credit limit, and jack up the fees. Often this can result in what appears to be a manipulated credit worthyness, that can change as you organize your debts.
Michelle
29588, South Carolina
U.S.A.
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