What to do when the databases you rely on start stripping out the very data you are paying for?
Word in today’s Wall Street Journal that the main credit reporting firms will be removing many civil judgments and tax liens from credit reports prompts us to restate one our core beliefs:
Not only do databases routinely mix people up, they are far from complete in the information they contain.
Now, they will be even farther away from complete, because in order to list adverse information the credit reporting companies want several identifiers on each piece of information before they include it in a credit report. Even if there is only one person in the United States with a particular name, if his address and Social Security number are not included in a court filing against him, that filing may never make it onto his report. From what we’ve seen, there are almost no SSN’s in most of the filings we review.
As a result of this new policy, the credit scores of a lot of people are about to go up, says the Journal.
To answer the question posed at the top of this posting: what you do is you go after the information yourself. You (or a competent pro you hire) looks at databases and courthouse records for liens, litigation and other information people use every day to evaluate prospective associates, counterparties and debtors. If there’s enough money at stake, you may want to conduct interviews, not only with references but with people not on the resume.
The idea that databases are missing a lot is old news to anyone who stops to take a careful look.
The next time you are searching in a paid database, you may notice a little question mark somewhere around the box where you enter your search terms. Click on that and prepare to be shocked.
“Nationwide” coverage of marriage licenses may include only a handful of states, because such licenses are not public information in many jurisdictions. In other cases, the information is public but the database doesn’t include it because it’s too expensive to gather data that has not been scanned and stored electronically.
Of course, sending someone to a courthouse costs more than a few clicks performed while sitting at your desk. But does it cost more than lending to the wrong person who defaulted on a big loan six months ago?