TRW formed a credit reporting unit in the 1960s, and it became one of the nation's biggest such firms. It merged in 1996 with Britain's leading credit reporting company under the name Experian, which now is based in Dublin, Ireland.
A 2002 report on the credit reporting industry by the Federal Reserve Bank of Philadelphia noted that consumer files were relatively primitive in the pre-computer era. Along with reports of any missed payments, a file might also include newspaper clippings about a person's arrest, marriage or promotion.
That changed in the 1970s as computers arrived on the scene and as corporate databases proliferated like weeds. This prompted passage of the Fair Credit Reporting Act, which laid down the first regulations for the growing industry.
Under the act, which was amended in 1996 with additional privacy safeguards, consumers were given the right to find out what's in their files and to dispute any inaccurate information. The act also limited access to a credit file to those with a "permissible purpose," such as lenders, other credit issuers or insurers.
It's clear, though, that not enough has been done to level the playing field. Although consumers have a right to a free copy of their credit file annually from each of the big agencies — available at AnnualCreditReport.com — those files can be unclear or difficult to understand.
Worse, because each agency uses its own system, consumers have to monitor all three to ensure that their files are accurate. If a problem is found, you have to jump through each company's hoops to make changes — a time-consuming and often frustrating process.
Here's my proposal: Create an online clearinghouse, run by the federal government's Consumer Financial Protection Bureau, that would allow people to fix all their files at one time.
Moreover, require each credit reporting agency to explain clearly any black marks on a person's file and to offer potential remedies. It's our information. Give us back some control of it.
Nobody asked these guys to have so much control over our lives. Nobody gave them the go-ahead to hoard our personal information.
The least they can do is pretend they actually care about our financial well-being.