Can anyone tell me how the CRAs make money? I'm sure that the creditor pay to put the info on there. Are they paid for how long the item stays on or otherwise why would they care so much if they took an item off? I know I have items on there that were only reported once and not on a monthly basis.
Several ways. Businesses pay $$ to both add information to the credit histories as well as to request credit histories when considering the extension of credit. Theorhetically, if all the info added is true and accurate, then the credit reports obtained should be accurate, resulting in the approval of loans for those most likely to repay, and the info to deny those who might not repay. This is the way it SHOULD work, but it doesn't always happen this way. Also, the CRA's sell your information to potential lenders. Lenders give the CRA certain criteria to filter with (i.e., score of >= 620, no lates on any mortgages, no balances near maximum credit limits, etc.). The lender uses the names and addresses to send you those 'preapproval' letters for credit cards, loans, etc. The insurance industry is now using credit histories during their rate process as well.
Since the information on our credit reports is ours, I think we should get a royalty every time they disclose the information to a third party. I constantly read articles about how a creditor, CRA, DMV, ISP Provider etc. is selling MY information to others - fair is fair - if it is mine, and you are selling it, I deserve a royalty.
