Credit scores: Everyone’s got one, even if they don’t know it — and these numbers can have a profound impact on the trajectory of your life. Representative Alexandria Ocasio-Cortez knows this firsthand, thanks to a false claim circulating about her credit score.
Recently, she put financial services firm Equifax on blast, calling the credit scoring system “broken.”
AOC’s comment is a timely one; as a member of the House Finance Committee, she’s in an excellent position to do some digging into the practices of the credit scoring industry, which is dominated by firms Experian, Equifax and Transunion.
As anyone who’s tried to do anything that requires credit history — buying a house or car, getting a job, buying car insurance, applying for a line of credit, getting housing — knows, the scores developed under the secret sauce used by these companies are arbitrary, really difficult to appeal and hard to shake.
If you mess up your credit, it can take years to clear — whether you have some financial trouble and miss a few bills, rack up credit card debt, experience a foreclosure or anything else. Many consumers are advised to regularly check on their credit reports for signs of anomalies. In fact, the big three firms are required to furnish free reports periodically by law.
Without regular monitoring, a black mark on your credit may come as a nasty surprise. For instance, someone once bought a house under my name — and it went into foreclosure!
We aren’t “customers” of these companies in the sense that we opt to do business with them. They start scraping data about us as soon as we begin establishing credit histories — like with student loans or first credit cards in college — and scoring us accordingly. Being delinquent on payments, having too many accounts or carrying too high a balance are all marks against you — but having little to no…