Excellent summary.
And just to add another example of massive power the agencies unilaterally have over us:
Let’s say you had a $30 bill from a dentist. Because the temp dope in the dental office misspelled your name and address, you never got the bill and the dumshxt couldn’t contact you. So they put the bill out for collection, and that $30 collection account shows up on all 3 of the credit agencies.
You have $8 million in the Big Bank you use, and decide you want to buy a vacation home, don’t want to use all your cash, and go in to your bank for a $3 million loan on a $6 million home.
From that $30 collection account, your FICO credit score on all 3 agencies just went from a perfect 800+ to under-650 deadbeat status, no matter that you’ve paid back several million-dollar RE loans, several $200k auto loans, thousands of dollars in credit cards you pay monthly, and still have $5 million in the bank. The logrythms they use to predict your credit-worthiness are of course so ingenius, you know...
Your rate on that prospective loan just went from 3.8% to over 5% because of that $30 collection caused by dental dumshxt.
Now if the bank has an actual person underwriting your loan request, you’ll get your loan, but the Big Bank may have to go through 25 layers of bureaucracy to do it. And that’s only because you have that big bank account.
Credit reporting agencies OWN applicants, and while you are absolutely right that it makes credit affordable and generally is good for that reason, the power they have over your personal financial plan (when some idiot at a dumshxt dental office screws up) is just mind-numbing.
This example isn’t about me (unfortunately lol) but in my job, I personally have witnessed similar scenarios often. And while the 1-percenters can say it’s more ridiculous in their case, it hurts thousands of us ‘little guys’ far worse.
There is a lot of righteous anger out there about the Equifax security breach, and I am not arguing against it.
The point that goes under the radar in this is that personal information security has been violated in major systematic hacks for a long time (decades) and it’s time for a major revamp of personal identification. SSN’s were developed in the 1930’s when there was no consideration of modern information security. So many databases and security systems rely on SSN’s and those have been spread far and wide. Even before the Equifax hack, this was true.
In the example of the dental office scenario you suggested - the real risk is that the lowly paid office staff person is likely selling your personal ID, including SSN to identity fraudsters. Hospitals, medical providers and dental clinics are good sources for fraud artists, and they do not have to hack in - they can just bribe an employee.
Some thought needs to be put into a secure biometric id system that would replace SSN as key identification. The problem with that was on display in the Senate interrogation of the former Equifax CEO - and is also visible in the investigation of the Russian hacking into the 2016 election. To wit - very few in the Senate or the House have any basic understanding of modern information technology. You can hear it in the way they frame questions. How can you expect good policy to emerge from folks who have no understanding of the problem?