CREDITOR PREDATOR

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MONEY MATTERS

Never before have so many been allowed to make so much about your life so public. Roy Green reports on the new dangers of credit.

Almost everyone lives on the verge of bankruptcy. Our average savings is about a fourth of what a typical family saves in Japan. The cash reserves typically total two weeks' living expenses, the mind frame for most Americans being that the cushion for emergencies equals the cash-advance limits on their credit cards.

Not surprisingly then, over 20 percent of all complaints to the Federal Trade Commission this decade have involved credit bureaus. They make a computer error, or you have a dispute with a store about a credit card purchase, and bang! you can be denied credit, a job, a mortgage — even the 900 numbers won't take your calls. Everyone needs to know how to get his or her secret hidden file, how to understand it, and how to correct any errors now, before the credit hits the fan.

It's no secret that each of us should review our credit reports annually. Everyone you ask can tell a horror story of some mistake that caused grief and prevented someone from getting a mortgage, consumer credit, or a job. What is a secret is that the credit reporting industry now has evolved (or devolved) to the point of simplifying our entire financial worthiness to a single number. There are a few well-guarded, veiled, unknown pitfalls/situations/conditions that could get you in trouble and cause your numerical value to dig for cover. And the stakes of the game have been raised; it is time to be more than a vigilante in protecting your credit virtue — you must become a credit warrior.

Spies vs. Spies

There is a secret file on each of us about our entire credit history that is readily available to the friendly guys in the corporate shark tank every day at the push of a button. This file records each payment on every mortgage, auto loan, and credit card, as well as disputes, defaults, bankruptcy, etc. It is as if photos of you financially naked are posted on the corporate locker room wall.

The first new threat is that it is easier to access your credit information than ever before, and the information is accessed more often, by more people, for more reasons than you could possible imagine. You know how much junk mail you get? Well chances are that for every letter there has been one or more credit inquiries from curious strangers who want to review your private history and send you their pitch. Therefore, if there is a mistake or problem on your report, everyone knows about it but you. That would be kind of like spinach between your teeth at a dinner party.

The second new threat is that your whole credit history will soon be summarized in a single number called the Credit Score. If there is a single flaw on your report, there won't be an explanation, just an arbitrary judgment. That would be like someone considering you as a possible soul mate on the basis of your participation in a swimsuit competition. I would rather be a monk.

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