CSC Plays Vital Role in Credit Ratings Business

Identity theft is rising and mortgage rates are falling, making it more crucial than ever for consumers to watch their credit. As the fourth-largest credit reporting service in the United States, CSC Credit Services plays an important role in that trend.

"Consumers need to pay more attention to their own credit-worthiness than ever before," says Robert Denny, president of CSC’s Credit Services division. Since CSC Credit Services manages the credit history of more than 40 million consumers, the group has been able to observe--and benefit from--several trends that make good personal credit even more important than usual. Good credit is critical to buying homes, cars and other goods--but it’s under attack from a number of threats.

Stopping Attacks on Credit

The most serious threat is identity theft, where criminals use consumer information such as Social Security or credit card numbers to open up lines of credit in someone else’s name.

A year-long investigation commissioned by Congress and conducted by the US General Accounting Office discovered more than 90,000 cases of identity theft in 2001. Identity theft is insidious because it’s so easy for criminals to commit and because its effects on consumers are so devastating. With a few pieces of data, a person could steal another’s name to buy goods, run up credit card balances, declare bankruptcy or even engage in criminal activities. The damage caused by identity theft can take months to repair.

A consumer often will not know that she has been a victim of identity theft until she has been denied for a loan because of mysteriously ruined credit. Fortunately, there are ways to catch identity theft before it becomes serious. Consumers should call their credit companies, for instance, if their bills don’t arrive on time, which could indicate stolen mail leading to credit-card number theft.

Most importantly, though, as the Federal Trade Commission’s identity theft organization says, "One of the best ways to catch identity theft is to regularly check your credit record." A close examination of a credit record can reveal new, unauthorized credit cards and cell phones and excessive credit inquiries that indicate a criminal is shopping with the new ID. The consumer should call the police in addition to contacting all three credit repositories--Equifax, Trans Union and Experian--to alert them of the fraudulent activity.

Even if there is no reason to suspect identity theft, it’s worth checking one’s credit to make sure there are no glitches in it. There are billions of information items going into credit reports, from a variety of sources-- credit card companies, lenders and even cell-phone providers. The sheer mass of data being entered can lead to problems on the credit report. "Even though mismatching of information is small relative to the amount entered, mistakes can still happen," Denny says.

A cell phone company, for example, could mistakenly report that a phone bill is more than 30 days overdue, or a credit card company could fail to report the payment of a large balance. Denny recommends that consumers treat their credit health almost as they would their physical health, and have annual "check-ups" so they know everything is OK.

Low Interest Rates Spark Use of Credit Scores

Checking one’s credit isn’t simply a way of averting bad things, of course--it’s also a key to obtaining good things, like cars and houses. Historically low mortgage rates are pushing consumers to buy and refinance homes in record numbers, which in turn means a greater need to know personal credit ratings. Credit scores are a vital part of purchasing homes and other large items that require loans. "Credit ratings are one of the foremost tools to lend people money," Denny says. Credit scores give indications of payment history and, accordingly, how good a risk a loan recipient might be.

Credit scores can change dramatically depending upon the most recent information entered in credit reports, so consumers should once again check their scores before making any large purchases. If any problems occur, consumers can report those errors to the credit agencies and fix the problems before attempting to buy anything.

The upsurge of refinancing and home purchases has helped CSC’s credit reporting business. CSC serves customers primarily in the South and Central states but through a long-standing partnership with credit services powerhouse Equifax, provides its 20,000 commercial customers access to 200 million consumer credit reports. Even though about 99 percent of its business is with commercial customers such as banks or credit card companies, CSC still benefits from the increased mortgage activity. "Almost 25 percent of our business is linked to mortgage lending," Denny says. "If mortgage lending goes up, it drives even more business our way."

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