It is amazing that the average consumer has
only about one inquiry per year although it is not really surprising since the
"super" prime customer is usually an older consumer who has already done his
or her credit building for twenty or more years.
For everyone else, it stinks.
Unless you have lived in your house for twenty
years, odds are that everybody and their grandmother wants to check
your credit and even for some of the most asinine reasons. I can
understand for lenders extending credit in the form of an unsecured
or secured loan but today things have gotten ridiculous.
Ask anybody who has just bought a house.
Your phone and cable companies want to check
your credit. Some utilities will check your credit. So does your
cell phone company. Even a security monitoring service for your
burglar alarm wants to check your credit.
Your car insurance company doesn’t seem to
care anymore whether or not that you have clean driving record
because they are obsessed with your credit score.
Banks have even got into the act and I am not
talking about a loan. Yes, opening up a checking account may require
a credit check even though most banks already rely on services like
Chex Systems. At this time, there are few financial institutions
willing to check your credit score but it is already happening. When
I opened up a checking account with Pentagon Federal Credit Union,
they used Equifax to check my credit rating.
But what boggles the mind with the credit
check obsession is that many of these checks are done by providers
of a service who can pull the plug on your account the day that your
payment is late!
So why the need to check your credit?
I can understand that credit worthiness is
important to a vendor but why not include a deposit to skip the
credit check. These vendors will be more than happy to slap you with
a late fee and other restrictions if you screw up.
And furthermore, if checking your credit is so
important, then why not report your payment history to the credit
bureaus?
Almost none of these type of vendors who check
your credit are willing to report your credit behavior except when
you go delinquent.
The truth of the matter is that your credit
score has become a sucker list for many of these types of companies.
Too many dings on your credit report may cost
you but it doesn’t really predict if you are willing to pay for
cable TV or any other service.
The legislative arm of the auto insurance
industry admonishes insurers who base their policies entirely on a
credit score however they worded their admonishment in such a way
that it is perfectly acceptable to use 99 percent of a credit score
write a policy. This sleight of hand gives the illusion that the car
insurance industry is not exploiting people with clean driving
records even though using one percent less of one hundred percent
still means you are getting hosed if your credit score is not
pristine.
But how far are vendors taking this credit
score obsession to?
A friend of mine once had a salesman from a
large home improvement company give him an estimate for some work to
be done on his house. My friend agreed to the quote and wanted the
work to start right away. However, the salesman wanted to check my
friend’s credit but my buddy told him that he was going to pay in
cash. After a long discussion that included phone calls to the
salesman’s manager, the home improvement company ultimately refused
to accept the job.
Apparently cold hard cash is no longer the
criteria for certain companies.
Perhaps this anecdote is a bit far-fetched
right now. But I hate to think what it would be like when credit inquiries are part of the norm
for practically every service.
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