The Bogus Brick Wall
There's nothing that Congress (or consumer advocate attorneys) can do to put a stop to financial catastrophe. Those gut-wrenching, devastating financial disasters will happen in the lives of otherwise good people. Divorce, job loss, and health crisis will always be facts of life.
However, there's much that can be done to throw a drowning person a rope. As long as there's a lifeline, most people will take comfort in knowing that a solution to their predicament is out there somewhere. We all desperately need to know that we can work our way out, step-by-step, from bad situations. While the devastation of a financial or life disaster is certain to sting for a while to come, a person can have hope if he or she knows that effort and hard work can resolve the situation.
Unfortunately, that's not the picture the banks, credit cards, and even some credit experts paint. Instead, they paint a picture of a brick wall that is seven years tall and three credit bureaus deep. They cast the impression that "time is the only antidote to bad credit" and they discourage any talk of credit improvement prior to the day, almost a decade in the future, when the negative credit listings begin falling off of the credit reports on their own. When you know that an item on your credit report is in error, where do you go and with whom do you speak with in order to straighten the situation out?
Roger found himself asking these same questions after he discovered a student loan on his credit report that was being reported in total default. This one negative listing, of course, completely destroyed Roger's once-pristine credit score. In fact, Roger had struck a new agreement with his student loan lender and had done a rehab payment program with his student loan lender. In the rehab, Roger had made increased payments on his student loans over a period of nine months. At the end of that time period, the student loans were paid in full (and Roger was feeling pretty good).
After the loans were paid in full, Roger found out that the student loans were still being reported as bad loans and that he had received no credit whatsoever for paying them off. In fact, his credit report still showed that he was in default.
Roger was understandably freaked out, so he called his original student loan lender who directed him to Sallie Mae, who managed Roger's student loans. Sallie Mae responded by sending Roger a letter in which they stated that he needed to contact the original student loan lender to dispute the default listed on his credit report. Round-and-round it went with Sallie Mae and the student loan lender both pointing the finger back at one another. Neither would fix the problem because neither wanted the responsibility.
Roger was told that there was nothing he could do and that the negative reporting would remain on his credit report for seven years. When he investigated the possibility of "credit repair" he was told over and over again by a multitude of government and consumer advocate websites that "time is the only antidote to bad credit." Even though Roger had made a new agreement with his student loan lender and even though Roger had paid the loan off early, the consumer "experts" of the world continued to drone on that, since Roger had once been late on his student loan that the listing was technically accurate (even though the listing showed him in default now). Confused and discouraged, Roger gave up.
Several of these pundits who preach the "brick wall," that credit repair cannot be hurried along, are the same people who claim to speak for the average American. This is particularly bizarre when you consider the sources: many consumer protection groups, state and federal regulatory agencies, and even many consumer advocacy lawyers. Such less-than-fully-informed sources actually buy the party line being sold by the credit industry that negative credit shouldn't be challenged unless it's clearly inaccurate. These same "consumer advocates" know full well that credit reports are rife with errors, but they fail to understand that the circumstances surrounding questionable credit are complicated. Many consumer advocates like to think that there's a clear, black and white line between accurate credit and inaccurate credit. They imagine a world where people can be neatly divided into "good" consumers and "bad" consumers -- and they go so far as to imagine that the credit score can predict which is which. So, in support of the dogma being promoted by the credit industry, these "consumer advocates" parrot the tidy and prevalent lies that are meant to convince the average American to leave their credit report and credit score well-enough alone.
Jane Campbell is a "consumer advocate" and an attorney (Jane's name has been changed). She has fought many cases against collection agencies, credit card companies, credit bureaus and the like on behalf of consumer clients. Over her many decades of legal practice, she has set across a desk handfuls of times from actual middle-class Americans experiencing actual credit troubles. Jane...
Credit Revolution: Path of the Smart Consumer 2007 John C. Heath, Esq., Dr. Randy Padawer, Jayson R. Orvis. All Rights Reserved. Published by Far Cliffs Multimedia, LLC