Yes, there is. To understand how and why the credit bureaus profit from bad credit, we need to explain some things.
First off, it is important to understand that the credit bureaus are in the DATA BUSINESS. They collect and sell data. "Data" is their product.
And if data is their product, who are their customers? The bureaus are for-profit companies, so they have to be selling their product to someone to stay in business.
Who do they sell it to?
They sell it to banks and lenders.
So banks, then, are the customers of the credit bureaus. In particular, banks who offer credit cards, car loans, mortgages, and more, buy data from the credit bureaus in order to market their own products to consumers.
So credit bureaus collect data and sell it to banks.
Like any business, they want to focus on the products that are in the greatest demand in their market. In other words, their focus needs to be on the data that their customers want most. This leads us to the next question, which is:
What kind of data are the banks after?
Put yourself in the shoes of a bank that offers high interest loans loans for a moment and think about this scenario. You want to sell a loan to someone. Two potential customers walk into your bank.
One is a consumer with good credit, who has access to a lot of credit cards and can pretty much get a loan for anything he wants, anytime he wants.
The other is a consumer with bad credit. His credit took a dive when he lost his job a while back. He’s been struggling to pay this bill and that, and to put food on the table for his family. It’s more difficult for him to get loans because his credit is shot, and since his credit cards are all charged off, he doesn’t have any available credit to speak of.
Which of these consumers do you think is more likely to want or need a loan from the bank?
The second, of course. The first consumer isn’t in need like the second consumer is. The first consumer can get a loan anywhere; why would they want to get one here?
But the second consumer is in desperate need of anyone who will loan them the money they need to get by and (hopefully) get back on their feet. Since they are likely struggling, and likely don’t have a lot of loan options available to them, they are more likely to be in a position to need the loan from the bank. (In other words, they’re an easy sell.)
And what makes it even better for the bank is that a loan for consumer number 2 is a lot more profitable than a loan for consumer number 1, because the consumer with bad credit will have a much higher interest rate.
It is for this reason that certain banks, credit card companies, and "sub-prime" lenders want to offer their "sub-prime" products to consumers with bad credit. It is why they go to the credit bureaus to purchase "bad credit" (or sub-prime) data in order to market their products to consumers who desperately need or want them.
And it is this fact that makes "bad credit" very profitable for the credit bureaus. Since sub-prime data is in high demand, they can charge premium prices for it.
This also means that once your credit is less than perfect, the credit bureau has very little monetary motivation to do anything about correcting problems that would result in an increase in your credit score. This is probably why it can be so difficult to get the bureaus to respond to disputes in the appropriate manner, and it’s probably why they have designed their whole system as a "guilty until proven innocent" system in which even if you CAN prove that you are innocent, it can be very difficult to get the bureaus to comply with the law and to get incorrect negative information corrected or removed.
The cards are stacked against consumers, which is why getting credit repair help and support from qualified resources is an important step in the credit repair process. The Credit Repair Intelligence System offers both cutting edge credit repair information, along with the help and support that consumers need to repair their credit.