Re: credit bureaus' scam #2

Potential creditors, insurers, and employers carefully review consumer files to help them qualify applicants.

That used to be true.

Once upon a time in America, if you applied for a credit account anywhere, a bookkeeper in some dusty back room requested a credit report from your local bureau. In fact, in those heady days before the corporate titans took over, all credit bureaus were local. Then every line of your file would be assessed, and if there was a problem, you might be telephoned or called in for more discussion. Lo, you might even be asked for a personal pledge attesting to your responsible intentions. Then a decision would be rendered, usually, but not always, in your favor.

The problem with that business model is that it isn't very scalable. Scouring an individual's credit report takes time, and it also takes skilled (with any luck, that is) human beings to render careful judgments. Unfortunately for fair decision-making, that's just not manageable if you want to extend credit to hundreds of thousands or even millions of people on a national scale. Automation, of course, must save the day, and technology hasn't yet allowed that to include an individualized reading and analysis of everybody's credit reports.

That's where the credit score comes into play. A seemingly wonderful solution, credit scores actually introduce a boatload of other new problems.

So quash Psychosis #2 here and now. Of course the credit bureaus want consumers to believe that things haven't changed, that life is as quaint as it was decades ago, and that people actually pay attention to the report itself rather than just a glorified number. In fact, the bureaus need consumers to believe that, which takes us to our next bit of consumer psychopathology: