Our criminal justice system was founded on the premise of being innocent until proven guilty. However, when it comes to the data reflected on your credit report, you are presumed GUILTY until proven innocent. Tens of thousands of consumers are being turned down for home loans, credit cards, jobs, rental properties, and auto financing as a result of being convicted of a “crime” they may not have committed, and most are unaware of their legal right to fair and competent representation.
Just this past week, Higher Score Credit Group client Sara was referred by a mortgage partner who could not get Sara approved for a home loan as a result of a credit card charge-off. The credit card belonged to Sara’s ex-husband who stopped paying the card shortly after their divorce. Sara was added as an “authorized user” on the credit card years earlier. Sara was NOT responsible for the debt since she was neither the applicant nor the co-applicant, and was simply authorized to use that card. Any person has the right to be removed as an authorized user at anytime. However, the credit card companies can, and often do, make the process quite cumbersome. Sara enlisted the help of her realtor, her loan officer, and loan processors to have her removed as an authorized user and get documentation stating such. After countless calls to the credit card company, hours of awful hold music, and nobody who was willing to help, they were almost ready to simply accept the injustice. Sara was treated as guilty until proven innocent.
Sadly, thousands of consumers like Sara are relying on the option of confusing phone calls, countless transfers, and lengthy hold times, only to wind up speaking with someone in a call center who isn’t listening, but rather reading from a script. Frustrated to the point of tears with your head throbbing from debilitating hold music, you accept your fate and punishment. Your sentence? 7 years. That is how long these errors can remain on your credit report if gone unfixed. Though it will have a diminishing negative impact on your score, you will continually be stuck paying higher interest rates and potentially be denied credit as a result of this presumption of guilt by the credit system.
Criminal law requires the district attorney, prosecutors, and investigating officers to present a case and evidence to a jury of peers who must unanimously declare the guilt of the accused. Our credit reporting system works in a manner completely the opposite. Recent studies have shown that most credit reports contain serious errors. As these errors go unnoticed by the consumer, credit card companies are automatically increasing their interest rates, their car insurance premiums are going up, and auto finance companies and mortgage brokers are denying them access to financing. Consumers are left no choice but to accept the embarrassment of being denied credit and/or paying thousands of dollars in additional interest.
Correcting such errors requires the consumer to understand the consumer protection laws, credit scoring system, and dispute verification process. As it stands now, the consumer must prove to the credit bureaus that the account is reporting in error versus any accountability being placed on the credit bureaus and the creditors furnishing the outdated, erroneous, and unverifiable information. By definition, the consumer is GUILTY until proven innocent.
In Sara’s case, Higher Score Credit Group acted as her “defense attorney” and assisted her with finding the solution to her problem. Within a matter of hours, by utilizing our expertise and combined decades of navigating the convoluted credit system, we obtained and supplied the necessary documents to the team underwriting her mortgage loan. The mortgage underwriters acted as the “jury” and ruled in her favor. Sara was granted loan approval and will save $300 per month on her payment as a result of the lower interest rate. $300 per month may not sound like a lot but over the course of the loan it works out to a savings of $3,600 per year for a 30 year mortgage, totaling $108,000!