Little-known firms tracking data used in credit scores
(WASHINGTON POST) Atlanta entrepreneur Mike Mondelli has access to more than a
billion records detailing consumers’ personal finances — and there is little
they can do about it.
The information collected by his company, L2C, comes from
thousands of everyday transactions that many people do not realize are being
tracked: auto warranties, cellphone bills and magazine subscriptions. It
includes purchases of prepaid cards and visits to payday lenders and
rent-to-own furniture stores. It knows whether your checks have cleared and
scours public records for mentions of your name.
Pulled together, the data follow the life of your wallet far
beyond what exists in the country’s three main credit bureaus. Mondelli sells
that information for a profit to lenders, landlords and even health-care
providers trying to solve one of the most fundamental questions of personal
finance: Who is worthy of credit?
Federal regulations do not always require companies to
disclose when they share your financial history or with whom, and there is no
way to opt out when they do. No standard exists for what types of data should
be included in the fourth bureau or how it should be used. No one is even
tracking the accuracy of these reports. That has created a virtually
impenetrable system in which consumers, particularly the most vulnerable, have
little insight into the forces shaping their financial futures.