Worried about yourcredit score?
That little three-digit number is a big deal in our financial lives.
It serves as a sort of grade for how you handle money.
The anxiety around credit scores is palpable.
It’s also lucrative.
Freezing your credit also doesn’t run you anything.
Idecided to write about itand, in the process, created an Experian account.
The company has been hounding me ever since.
When I click for more information, lo and behold, I’m confronted with a paid service.
Here’s the thing, though: A lot of the services it’s offering are already free.
They did not address the arbitration agreement.
But Experian is hardly the only company out there selling credit-related services that drain consumer dollars.
The credit-monitoring and identity-theft-protection industry, according to IBISWorld, is worth about $5.4 billion in annual revenue.
They also often fail to catch fraud related to medical services or tax refunds.
And even when they do catch identity theft, they do so after the fact.
“But the thing is those products aren’t all that effective.”
Credit-repair companies often target people with lower incomes and people desperate to improve their credit reports and scores.
Credit-monitoring companies can really appeal to anyone worried about their credit and identity theft.
“Most of the letters that you’re paying for are going into the garbage,” Pizor said.
In 2022, it sued TransUnion, accusing it of violating that order.
In 2005, it dinged Experian for marketing free credit reports that weren’t so free.
These companies and credit-related services aren’t necessarily evil.
A significant part of the issue is that the ecosystem is a mess.
Immigrants and young people in particular can benefit.
For consumers, the whole thing feels like a maze.
It’s tough to separate the good actors from the bad and to understand the trade-offs at hand.
There is this sense of existential dread around credit scores.
A negative one can really drag people down.
He’s been shocked at how much credit scores have come up.
“The more I thought about it, the more I realized this focus is based on experience.
At some point, their low credit score has negatively impacted their lives.”
But you don’t need to obsess over it, let alone spend a bunch of money on it.
If you see something weird on your report, you could dispute it on your own.
“If you have a credit score over 720 or 780, stop worrying.
Don’t be obsessed with getting an 800 or 820,” Wu said.
“This is not your SAT score.”
If you want to sign up for identity-theft protection or credit monitoring, fine.
The credit experts I spoke with were very wary about credit repair across the board.
The next time you start to worry about your credit score, take a beat.
“I mean, the magic bullet is building a better system,” Wu said.
Emily Stewartis a senior correspondent at Business Insider, writing about business and the economy.
