In 1874, if you wanted to buy groceries on store credit, the cashier would reach under the counter and pull out a little blue book. Inside would be your name, profession and whether you paid your debts on time. It was the beginning of the Equifax business model. And it was never about the regular citizens. It was about the businesses that wanted to lend to them. Regular people are the product. Banks and businesses are the customers.
And in many ways, that makes sense. Businesses do work better if they know something about their patrons. It's safer to lend money, which means it's cheaper and easier to get for "creditworthy" customers. Sort of a win-win but for one uncomfortable thing: Today, credit bureaus like Equifax have grown into massive corporations that slurp up virtually every piece of our financial lives. We never signed up for Equifax, or either of the other two companies that monitor just about every non-cash transaction. We never opted in. And it's hard to opt out.
On today's show: Why credit bureaus know so much about us, and why lawmakers have been struggling to regulate them for the past fifty years.