THE BUSINESS OF THE CREDIT BUREAUS

By Stephen Leifer Personal Credit

Credit bureaus make money selling data. They sell date about you to people who want to offer you credit.

What data is most valuable to them?

The data that’s the most valuable is data of people with poor credit. People with bruised, or sub-prime credit make the banks the most amount of money because these people will pay the most for credit. They will pay the highest interest rates, and the highest annual or monthly fees.

So what’s wrong with that, you may ask.

This is a major concern because the credit bureaus responsibility is to maintain the accuracy and integrity of the data.

What is the motivation of the credit bureaus to maintain accuracy and integrity of data, if the worse the data is, the better it is for them?

The bottom line is that the more negative information on a credit report, accurate or not, the better it is for the bureaus. The worse people’s credit is the more valuable the data is.

Just some interesting insight into the credit bureaus.