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The Ethical Side of Credit Restoration

By: Chris Esposito

Is it ethical to remove legitimate bad credit from a credit report? Of course it is. The credit rating system has not been kind to the American consumer. The term "credit repair" has been given a nasty reputation and has become synonymous with fraud. This state of affairs often forces defense of the ethics of the service, which is unfortunate. Something that is completely legal, ethical, and good for you shouldn't need to be defended.

Credit repair and restoration is an alternative to credit prison despite the disrepute that taints the overall credit improvement industry. A credit report is no more than an allegation, and most consumers never challenge that allegation. However, you need to know that you are wholly entitled to essentially enter a plea of not guilty.

Removing the record of a negative credit item is, without doubt, ethically sound. We belong to a fundamentally capitalistic society, and the credit bureaus capitalize on consumer information. Unlike our legal system, the bureaus take no oath to truth, equity and the common good. No citizen has a moral obligation to support any business venture, much less a publicly traded corporation, which may well destroy his or her financial life.

If it weren't for federal laws that direct bureaus to remove most items after seven years, then the credit bureaus would maintain every piece of credit information forever - with errors left uncorrected. Under the regulations, the credit bureaus must themselves practice credit repair at the seven-year mark. If it is right to remove accurate credit accounts after seven years, why would it be wrong to do so in less time?

Furthermore, credit bureaus do not concern themselves with the impact on consumers. Primarily their profit margins guide their judgment rather than consumer rights. Credit history information often misrepresents the credit worthiness of the consumer. By tagging good citizens as deadbeats, they damage everyone: creditors, the economy, and most importantly, the individual. Several policies and techniques employed by the credit bureaus appear most abusive to the consumer.

The credit bureaus have not been able to maintain reasonable accuracy in their credit profiles. The bureaus claim an error rate of less than one percent. In reality, independent studies show the credit bureau error rate to be closer to 79% percent.

Think about that difference for a moment - one percent versus 79%. These numbers aren't even in the same ballpark. One bureau has actually testified in court to a greater than 50 percent error rate. Unfortunately, the bureaus choose to err on the side of negative information.

The bureaus fiercely resist the correction of these errors. It's not that they're morally opposed to the corrections. It's simply a matter of money. In other words, it costs them time and money to make all of the corrections.

Credit bureaus make their money from the sale of information and from the sale of generic target marketing lists to invasive personal investigations. They cull a pool of information larger than any in the world. The loser is the person who values his or her privacy. Jobs are lost, insurance cancelled, reputations ruined - all by error-prone records collection, sloppy record keeping, and "up for grabs" dissemination of information.

Basically, the country needs a grand scale revision of the US credit reporting system. Recently, there have been much higher incidences of file "mis-merges" - the worst kind of file error. In a file mis-merge, the credit information of another person with similar name or social security number is added onto the file of an innocent bystander.

Imagine for a moment that this mis-merge has happened to you, and you discover it right when you are in the process of making an offer on your dream home. It doesn't matter that you are completely innocent. It's still going to take you a lot of time and effort to set things right. You may lose out on your shot at that home.

America is not the only country that utilizes consumer credit reporting systems. However, most other countries extend credit based on present standing. In England, for example, Equifax and Experian cannot maintain credit information longer than five years. Americans need a grand scale revision of the US credit reporting system. Until then, feel comfortable that removal of negative credit accounts before the seven-year mark is not unfair or unethical.

It's simply your way of standing up for your rights as an individual. Remember that the credit bureaus are simply for-profit companies; and, you don't have to blindly follow their rules if you don't choose to. After all, that's what makes capitalism so powerful to begin with.

Article Source: http://articlesltd.com

Chris Esposito focuses primarily on home renovation loans and home improvement projects for people who wish to buy and rehab residential real estate across the nation. For more information about his company and home renovation loans, visit www.DirectRehabLoans.com, or call (877) 876-3688.

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