The Bureaus Get Rich on Bad Credit

The job of selling data comes at a price.  Depending upon what type of data you need, as a data purchaser, whether you’re buying data to evaluate whether or not someone’s a good credit risk or you’re buying data to send a marketing message to, for a new credit card offer, data is extremely valuable.  

Credit bureaus make money selling data, so now we have to look at what data is the most valuable data.  The data that’s the most valuable is the data of the people who will pay the most amount of money for credit.  The people who will pay the highest interest rates, and the highest annual or monthly fees.

That data is the data of bad credit people.  People with harm, bruised, or sub-prime credit and the people who make the banks the most amount of money in fees and interest.  So that data is truly the most valuable.

Now this brings up a major concern.  The credit bureaus job is to also maintain accuracy of the data 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 the more mistakes they have on credit reports, the better it is for them, because the worse people’s credit is, the more valuable the data is.  The credit reporting agencies make more money from consumers who have worse credit, because the data is more valuable at that point.

Just some interesting insight into the world of the credit bureaus.

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