Credit mistakes originate in many ways. To pretend that making a
credit mistake before the age of 30 is newsworthy is more laughable than
newsworthy. Nevertheless, a
new study
by Credit Karma as cited by CNBC suggests just that… 68% of consumers
are likely to make a “credit fumble” before the age of 30. While this
may be true, and obvious to anyone, the implication is less than
laughable. Yes, people are likely to make credit mistakes. But, this
does not account for the totality of credit issues in an individual
consumer’s credit reports.
Do credit mistakes come from consumers?
If you’ve ever applied for or used credit, you know that it is
possible to make a mistake. You could miss a payment, you could get a
medical collection, etc. There’s no question that consumers can make
credit mistakes. So yes, consumers can make credit mistakes. However,
that’s not the focus of this article. Let’s focus on both sides of the
fence, not just harping on the “68%” who have had a credit fumble.
Do credit mistakes come from credit bureaus?
You may think a multibillion dollar industry is devoid of mistakes.
And if you do think this, you’re wrong. The credit bureaus are sued more
often than the Obama administration. The credit bureaus were sued so
often that the government created multiple laws regulating the way in
which credit information is reported and corrected. In fact, many
studies have showed that these mistakes (some reporting that as many as
79% of consumer credit reports contain errors) have
misplaced some consumers into subprime markets.
Do credit mistakes come from creditors?
Similar to the credit bureaus, creditors also are the cause of credit
mistakes and consumer credit reports. Clark Howard recently reported
that consumers were being taken advantage of by legal proceedings. You
can read the article here,
but they were essentially filing lawsuits hoping that you did not
respond and getting default judgments against you in order to avoid all
the legal requirements of collecting on debts and reporting them
accurately to the credit bureaus.
Conclusion.
We all have a responsibility to ensure that we take our financial
obligations seriously. And when I say “all,” I am talking about you, the
credit bureaus, creditors, bureaucrats, judges, etc. So, while the CNBC
article and the credit karma survey are technically correct that 68% of
consumers have a credit fumble before the age 30, I’m more concerned
with the other side of the equation. That is, the fact that the
remaining 32% also experience the negative effects of inaccurately
reported credit information without having a credit fumble (thanks to
the credit bureaus and creditors). Finally, the next time you hear what
appears to be outlandish surveys, remember that there’s two sides to
every story.
