Fair Credit Reporting Act

Why You Need to Dispute Errors on Your Credit Report

By | Credit Repair, Credit Reports, Credit Scores, Fair Credit Reporting Act, Your Credit

chasing bad credit

There’s a plague in the United States, but it has nothing to do with the flu. Instead, it’s a plague of errors on the credit reports of millions of Americans.

According to the Federal Trade Commission, more than 20 percent of Americans had errors on their credit report as of 2013, and more than 5 percent of those errors were serious enough to negatively impact a credit or interest-rate decision. That means that more than 60 million Americans have errors on their credit report, and more than 15 million of those people could receive a denial for credit or pay exorbitant rates because of incorrect credit reports.

While you may find those numbers shocking, the most shocking fact is that they’ve stayed roughly the same for decades. While the three major credit bureaus and their regulating authorities often talk about the necessity to minimize errors, the simple fact is that the burden of ensuring your credit report is accurate falls entirely on your shoulders.

Why Credit Report Errors Are Dangerous

Which would you prefer, a 25-percent interest rate on a loan or a 5-percent interest rate? Do you want to get a denial for your next credit-card application? A low, erroneous credit report could even lead to failing your background and credit check for a new job.

In today’s world, others use your credit report in numerous ways that can seriously impact your life even beyond interest rates and credit approvals. Just consider the legal ramifications if someone steals your identity. What if the thief were to start a company in your name or try to get a tax refund in your name? Before you know it, simple credit-card bills are the least of your worries.

It’s vital that you closely monitor your credit reports from all three bureaus, then move decisively to dispute any error as soon as you spot it, no matter how small or inconsequential it may seem.

How to Monitor Your Credit Report for Errors

It’s important to remember that “your credit report” isn’t a single entity. Instead, each of the three major credit reporting agencies in the United States holds its own version of your credit history, and each has its own relationship with your creditors and other information-reporting parties.

That means if you find an error on your credit report from any one of the three agencies, you then need to verify that information on your report from the other two agencies as well.

You can do this in two primary ways:

Use your free, annual credit reports

The Fair Credit Reporting Act, or “FRCA,” requires each of the three primary reporting agencies to provide you with a free copy of your credit report every 12 months. The only official online Web page to start that process is at, a website run jointly by the three bureaus.

You can request your report from all three bureaus at the same time or spread your requests throughout the year. Each bureau runs its own 12-month timeline, based on the last time you requested your report from that bureau.

Use a credit-monitoring service

The downside to relying on your free, annual reports is that you’re only viewing your information from each bureau once per year. If an error occurs just after you’ve requested your report, you might have to wait 11 months to find out about it. As an alternative, credit-monitoring services can provide you with updated reports each month. A variety of paid memberships are available, but many credit-card providers also offer their customers free monitoring services.

How to Dispute Credit Report Errors with Credit-Reporting Agencies

If you find any type of error, even just a mismatch in your personal information like address history, you need to initiate a dispute immediately. You’ll need to contact each credit-reporting agency separately because they’re not required to communicate with each other until someone confirms or removes a dispute. Even then, a corrected error within one agency can still linger in another’s records.

Remember that you should always use certified mail when sending information to a credit agency through the post office.

Dispute Credit Report Errors with Equifax

Equifax allows you to dispute errors online or through the mail. To get started online, visit the Equifax Online Dispute portal that will walk you through the process of initiating the dispute and monitoring its progress.

To begin a dispute by mail, send a letter explaining the full circumstances of your dispute and all supporting documentation to the following address:

Equifax Information Services, LLC

P.O. Box 740256

Atlanta, GA 30374

Dispute Credit-Report Errors with TransUnion

TransUnion allows you to dispute errors online, through the mail or over the telephone.

To dispute an error online, visit the Transunion Online Dispute portal.

To dispute an error over the phone, call 1-800-916-8800. Make sure you have all supporting information at hand before you begin the call.

To dispute an error by certified mail, send a letter explaining your dispute with all supporting documentation to:

TransUnion LLC Consumer Dispute Center

P.O. Box 2000

Chester, PA 19016

Dispute Credit Report Errors with Experian

Experian allows you to dispute errors online, through the mail or over the telephone.

To dispute errors online, visit the Experian Online Dispute portal.

To dispute an error over the phone, call 1-866-200-6020.

To dispute an error by certified mail, send your letter and documentation to:

Experian National Consumer Assistance Center

P.O. Box 4500

Allen, TX 75013


Who’s Spying On Your Credit?

By | Ask a Credit Expert, Consumer Rights, Credit Reports, Fair Credit Reporting Act, Your Credit

If you are not regularly monitoring your credit report, you might be surprised to learn who is making credit inquiries. Even more surprising is the decisions these people are making based on that information.

If you have filled out an application for a job, a rental property or a mobile phone, or if you need utility service, your credit report may have been reviewed as part of that application process.  When you supply your name, birth date and Social Security number on any type of application, you may be unknowingly subjecting yourself to a credit report inquiry. Insurance companies use your credit history to decide the premium you will pay, landlords may check your credit to determine if you would be a good tenant, utility companies may pull your credit report to set your payment terms, and employers may decide to hire or promote you based on your credit rating.  Government agencies, including state or local child support enforcement, also have the right to pull your credit report for license or benefit applications.

Your credit report contains private information and includes not only your name, but your address and previous addresses, telephone number, Social Security number, year and month of your birth, and your employment information. Your report may also include public record information, such as civil judgements, tax liens and bankruptcies. This is information that you may not want certain people to know. According to the Fair Credit Reporting Act, however, anyone with a “legitimate business need” can access your credit report. Each inquiry can drop your credit score from two to five points. While these inquiries stay on your credit report for two years, they will only affect your score for one year.

The good news is that you have a right to obtain a free copy of your credit report from each of the three reporting agencies each year, and you have the right to know who else is looking at it.  When you order a copy of your report, it will include information about anyone who has inquired about your credit or has requested a report. It is a good idea to regularly monitor your report, because many credit reports contain serious errors that can jeopardize your credit rating and financial well-being.

Credit inquiries are not only carried out by financial institutions when you are applying for a credit card or rate-shopping for a loan or mortgage. Many companies are using credit reports more and more often to make any number of decisions. This is all the more reason to frequently check the accuracy of your credit reports.  Otherwise, you may be denied your ideal apartment, lower insurance premiums, or even your dream job or hard-earned promotion at work.

Moving Beyond Stall Letters

By | Ask a Credit Expert, Collections, Consumer Rights, Fair Credit Reporting Act, Fair Debt Collection Practices Act, Your Credit

We hate to be the bearers of bad news, but credit companies have never been your best friend. One of the reasons may be the fact that they hold a lot of control over a certain item that many people are fearful about: the credit report. In a perfect world, creditors would report only correct information on our credit reports and all would account as it should. Unfortunately, this world is far from perfect, and any disputes that we may have are not easy ones to settle.

When filing a dispute, the most common item the consumer will receive is a “stall letter.” When disputes are submitted by consumers, the bureaus will send out a vague response that most commonly says something like, “We’ve already verified this item” or, “We find this dispute to be frivolous.” To frustrate a consumer further, they are not informed how the bureau came to that conclusion, but these are the only statements bureaus are allowed to make as efforts to reject a dispute. An investigation costs money for both the bureaus and creditors, and they will use every power within their means to halt a dispute in the early stages. This irritating tactic is often a defective deterrent that buys time or chases the consumer away.

Do not let their “frivolous” statements discourage your efforts to dispute. Once the credit company realizes that their stall letter is not working – which requires you to send another letter disputing the item more aggressively – what usually follows is a request for proof of your identity. By having proof of identification on hand ahead of time, you can respond immediately and thwart the credit company’s efforts to stall for extended lengths of time. Do not let their evasive methods fool you; these companies are required to look into your dispute and investigate it as many times as you deem necessary, whether you have proof or not. As a consumer, you have the right to verify the information on your credit report and the bureau is required by law to accommodate. The burden of proof lays on them, not on you.

As a consumer, although you have the right to dispute multiple items as you see fit, this is not typically the most effective maneuver. When several disputes are received at once, you are more likely to get stall letters than anything else. The bureau will attack with their frivolous statements once again, but this time they will have reason to believe that your disputes are frivolous or designed to misdirect. Multiple disputes may also trigger internal concerns that slow the whole process.

Our advice? Be smart about what you dispute as a consumer, but never shy away from keeping creditors on their toes.

Consumers Have Power? There’s No Dispute

By | Ask a Credit Expert, Consumer Rights, Credit Reports, Fair Credit Reporting Act

To anyone who’s ever doubted the ability of individuals to convince large faceless institutions (like, say, credit bureaus) to fix their errors and do what’s right, the National Park Service’s recent announcement that it will be restoring a quotation at the Martin Luther King Jr. Memorial in Washington, D.C., must represent a ray of hope.

For those not familiar with the story, the granite memorial, which was dedicated last fall, featured a quote of King’s that had been condensed from 45 words down to 10. The problem was that the truncated version actually conveyed the opposite meaning of the “drum major” speech it was taken from. After poet Maya Angelou and others disputed the abridgement, Interior Secretary Ken Salazar finally ordered the park service to correct it.

“Yeah,” you might be saying, “but they could prove THAT error. How am I supposed to prove an error on my credit report is wrong?”

Answer: You don’t have to.

No, really. The burden of proof is on the credit bureaus and creditors, not the consumer. The Fair Credit Reporting Act ensures that when you contact the bureaus with a dispute about your credit report, their responsibility is to contact the creditor, and the creditor has to verify it.

The only exception is that sometimes you’ll need to prove your identity. The bureaus frequently will require proof of identity — a photo ID with your current address, something with your Social Security number, and something else confirming your current address — if you’ve moved within the last couple of years. Creditors, too, will sometimes require completion of a fraud affidavit if an account appearing on your credit report isn’t yours.

One last thing to remember: The bureaus can’t tell you to stop disputing, or that they won’t investigate a dispute anymore. As a consumer, you always have the right to dispute. For us, if a bureau responds to a client’s dispute by saying, “Yeah, it’s verified, and it’s correct the way we’re reporting it,” if the client says it’s still not correct, then we continue to fight on that item and continue to dispute.

Ultimately, whether you’re talking about faulty credit reports or botched memorials, there’s no reason people should feel powerless to correct bad information. And fortunately, unlike the King quote, credit reports aren’t written in stone.

What Is Your Lucky Number?

By | Ask a Credit Expert, Credit Reports, Credit Scores, Fair Credit Reporting Act, Personal Finance

We may play the date of our wedding anniversary in the lottery, remember that magnificent eighteenth birthday when we got to drive our father’s car for the first time, and long to lose that extra ten pounds, but the number that most impacts our life – both in what we decide and in what others decide about us – is our credit score.

Our credit score affects whether or not we can buy a house, the interest rate we can get on a new car loan, and sometimes even whether or not we get a job interview. A credit score is more than a memorable number or date, it is something we must actively manage to improve our quality of life.

Credit scores range from 350-850, and the higher the score the better. These numbers are guidelines, so while many folks aspire to achieve a credit score of 850, most people top out at 815 or 820. Some people who actively work to maintain a credit score over 800 call themselves the 800 Club. They get together online or in person and discuss ways to increase their score. It pays off – if you have a credit score of 800 or higher, refinancing your mortgage is a piece of the proverbial cake.

For the rest of us, a credit score of 620-650 is enough to secure a mortgage (albeit at a higher interest rate than the folks with credit scores of 750-800). A credit score under 650, though, sets the borrower up for additional scrutiny and potential problems with securing credit. (620 works for a mortgage because the mortgage is secured with the house itself; however, someone with a credit score of 620 is unlikely to get a credit card since that line of credit would be unsecured.)

If your credit score is below 620, the only credit offers you’ll receive are for secured cards. With secured cards, you put money down up front to back the line of credit. For instance, you would give the lender something like $500 to hold as collateral. $500 would then be your credit limit on a credit card that you can utilize and pay off like any other credit card. When the credit card is paid off, you would get your $500 back.

On the other end of the spectrum is American Express, one of the hardest credit cards to get these days. Most American Express cards have to be paid off each month – compared to most Visa, MasterCard, and Discover cards that have only a minimum payment due each month – so America Express has a higher standard (and a higher credit score requirement) for its card holders.

Wherever you are in the credit score spectrum, it is time to learn what your score is and why. It is time to own, and not be owned by, the most influential number of your financial life and to manage it to make it work for you.

Impacts on Your Credit Rating

By | Credit Repair, Credit Scores, Debt, Fair Credit Reporting Act, Your Credit

Remember the old Labyrinth game that used to be so popular? It could get frustrating trying to manipulate the board just right so that the metal ball would successfully navigate the maze. Sometimes, navigating the credit game can be just as frustrating – but the stakes can be a lot higher.

Part of what helps you successfully manage your credit rating is knowing what will affect your score. There are a variety of things that can impact your credit rating positively and negatively, and there are some things that you might think would affect your score that have no impact whatsoever.

Two things that will not affect your score that most people think do are income and denials. Your income is not a factor in determining your score, although it can be a factor in whether or not you are extended credit. And getting denied doesn’t impact your score because no one sees the denials.

Looking at your own credit score also doesn’t impact your credit score, nor do inquiries from insurance companies or pre-approved credit offers. These are called soft inquiries. Hard inquiries, on the other hand, can have a big impact on your score. Every time you apply for credit, the inquiry made based on that application will affect your credit score negatively. In other words, you shouldn’t go applying for every new credit card just because the offer came in the mail.

Your debt to limit ratio will also have a pretty significant impact on your credit score. Your overall debt to limit ratio will affect your score, but each individual account will as well. If you have several lines of credit and most of them have very low balances, that can help, but if you have one or more that are continually flirting with the limit, that will have a negative impact on your score.

Your overall score will de determined based on a number of factors, including debt to limit ratio, the length of time you’ve had credit, what kind of payment history you have, and whether or not you have a bankruptcy, charge off, or outstanding collections on your report.

Maintaining and improving your credit rating can be a simple process:

  • use your credit regularly, but never more than you can afford to pay off in a reasonable amount of time
  • make sure your credit report is accurate by reviewing it regularly
  • make your payments on time, every month
  • don’t use credit as a way to extend your income; instead, cut back spending as much as possible

How Long Can Information Be Reported On Your Credit Reports?

By | Bankruptcy, Collections, Consumer Rights, Credit Cards, Credit Laws, Credit Repair, Credit Reports, Fair Credit Reporting Act, Your Credit

One of the first credit repair steps involves removing information that is outdated.  The problem is that many consumers cannot tell when information is outdated.   On the surface, it seems like a simple exercise – just compare some dates.  While that is correct, the more difficult part involves determining which dates to compare.  The answers are provided in The Fair Credit Reporting Act, section 605.  According to section 605, the following items may not be reported on your credit reports:

  1. Bankruptcy: Cases under title 11 [United States Code] or under the Bankruptcy Act that, from the date of entry of the order for relief or the date of adjudication, as the case may be, antedate the report by more than 10 years.
  2. Civil suits, civil judgments, and records of arrest:  Civil suits, civil judgments, and records of arrest that from date of entry, antedate the report by more than seven years or until the governing statute of limitations has expired, whichever is the longer period.
  3. Paid tax liens: Paid tax liens which, from date of payment, antedate the report by more than seven years.
  4. Collections and Chare Offs: Accounts placed for collection or charged to profit and loss which antedate the report by more than seven years.
  5. Other Adverse Items: Any other adverse item of information, other than records of convictions of crimes which antedates the report by more than seven years.

So What Are The Exceptions?

There are exceptions to these general rules.  Most of the exceptions are based upon the use of the report.  The general rules are not applicable in the case of any consumer credit report to be used in connection with the following:

  1. Credit transactions involving, or which may reasonably be expected to involve, a principal amount of $150,000 or more;
  2. Underwriting of life insurance involving, or which may reasonably be expected to involve, a face amount of $150,000 or more; or
  3. Employment of any individual at an annual salary which equals, or which may reasonably be expected to equal $75,000, or more.

If you have ever wondered why there are so many different credit scoring models, this is one of the primary reasons.  The information that is permitted to be included on the credit report can vary depending on what the credit report is being used for.

So When Does The Time Period Start?

In regards to bankruptcy, the 10 year period starts at the date of entry of the order for relief or the date of adjudication.   In regards to the other items, the 7 year period begins, with respect to any delinquent account that is placed for collection (internally or by referral to a third party, whichever is earlier), charged to profit and loss, or subjected to any similar action, upon the expiration of the 180-day period beginning on the date of the commencement of the delinquency which immediately preceded the collection activity, charge to profit and loss, or similar action.   Clear as mud, right?

So What Does This Mean?

In order to understand if items on your credit report are outdated, you need to understand how the dates are calculated.  Remember, you should review your credit reports frequently for errors and signs of identity theft.  It is not uncommon that dates are incorrect.  In fact, in the case of debt collection, errors in the proper dates are very common.  These errors may result in negative items being reported longer than necessary.  Check the dates on your reports and verify that the information is correct.  If you need help, give us a call – we would be happy to assist you.


Credit Repair: What is a Credit Report Anyway?

By | Credit Repair, Credit Reports, Fair Credit Reporting Act

Understanding your credit report and credit score can help you manage and improve your credit situation.  By knowing what affects your credit report and credit scores, you will be able to take positive actions that may lower your credit risk and increase your credit score.

There are three major credit bureaus: Equifax, TransUnion, and Experian. Together, these three bureaus compile and maintain credit files on nearly 90 percent of adults in the United States.

A common public misperception is that these bureaus are government agencies or extensions of the federal government.  In fact, the bureaus are private, for-profit companies that gather your credit history information and sell it to businesses that are legally permitted to see your report.  The businesses allowed to request your credit report include creditors such as banks and credit unions, credit card companies, mortgage lenders, and retail stores, in addition to employers, landlords, and insurance companies.

A consumer credit report is a document prepared by the credit bureaus that provides the following: Personal Information, Credit History, Public Records (bankruptcy, judgments, etc.), and Inquiries.  Other than inquiries, all of the above information remains on your credit report for seven to ten years.  This information is documented and sold to current and/or potential lenders, employers, landlords, and insurance agents for the purpose of providing the consumer’s payment history and credit worthiness.

Based upon the Fair Credit Reporting Act, credit grantors are permitted to review your credit report to objectively determine your credit worthiness.  There are 190 million credit active people in the United States who have a credit file, meaning they have applied for credit in some form since they were eighteen.   As consumers pay their bills, most lenders report the payment and account information to at least one of the three credit bureaus.  However, a recent study shows that up to 79% of all credit reports contain inaccuracies.

While a bankruptcy, judgment, or late payments can lower your credit score pretty quickly, improving your score takes time.  It is best if you check your credit scores and credit reports at least every 6-12 months, especially prior to applying for a loan.  This way, you have no surprises when a potential lender views your report. You’ll have time to work on improving any inaccuracies on your credit report and work to increase your credit score, if needed.


Can An Employer Check Your Credit Reports?

By | Consumer Rights, Credit Laws, Credit Repair, Credit Reports, Credit Scores, Fair Credit Reporting Act, Your Credit

In most states, checking an employee’s credit report is considered a permissible purpose.  Employers check employee’s credit reports to assess the overall risk of the employee.  Employees with better credit reports are generally deemed to be more responsible and organized.  Whether or not you agree with this assessment, you need to be prepared.  If you are currently looking for a job, or your current employer decides to check your credit report, it is imperative that your credit report be as strong as possible.  This includes making sure that your credit report is accurate and also that you manage your credit accounts responsibly (Learn more about credit repair).

 Conditions for Furnishing and Using Consumer Reports for Employment Purposes: 

A consumer reporting agency may furnish a consumer report for employment purposes only if the employer who obtains such report from the agency certifies to the agency that the employer has complied with the disclosure requirements in the Fair credit Reporting Act with respect to the consumer report, and that the employer will comply with the conditions for adverse actions, if applicable, with respect to the consumer report.  The employer is not permitted to use information from the consumer report in violation of any applicable Federal or State equal employment opportunity law or regulation; and the consumer reporting agency must include a summary of the consumer’s rights with the report.

 The Consumer Must Provide Permission in Writing:

Generally, a person may not procure a consumer report, or cause a consumer report to be procured, for employment purposes with respect to any consumer, unless a clear and conspicuous disclosure has been made in writing to the consumer at any time before the report is procured or caused to be procured, in a document that consists solely of the disclosure, that a consumer report may be obtained for employment purposes.  The consumer must provide written authorization to the employer before the employer may procure the credit report.

What if Your Employer Takes an Adverse Action Against You Based on Your Credit Report?

Before taking any adverse action based in whole or in part on the report, the employer intending to take such adverse action must provide to the consumer to whom the report relates a copy of the report.  The employer must also provide a description in writing of the consumer’s rights under the Fair Credit Reporting Act.

Do Not Take Any Unnecessary Chances:

If you have not checked your credit report lately, you should.  Studies show that only about ten percent of consumers check their credit reports regularly.  Before you potentially lose an opportunity for a new job, or even possibly lose the current job you have, check your credit reports and take proactive steps to make sure that your credit reports are as strong as possible.

What Items Are Reported to the Credit Bureaus?

By | Consumer Rights, Credit Cards, Credit Laws, Credit Repair, Credit Reports, Credit Scores, Fair Credit Reporting Act, Personal Finance

The credit reporting system is not perfect.  In fact, it is far from perfect.  As a result, a consumer that manages credit responsibly may not be rewarded with an appropriate credit score.  To understand how this can happen, consumers need to understand who reports credit data to the credit bureaus. 

Approximately 30,000 data furnishers provide data to the credit bureaus each month.  This results in about 4 billion points of data each month.  That breaks down to approximately 130 million items each and every day.  The largest providers of data are financial service providers such as banks, credit unions, and consumer finance companies. 

While these numbers are staggering, there is a lot of data that is not reported.   Creditors are not actually required to report data to the credit bureaus.  As a result, some creditors choose not to report any data at all.  Other creditors choose to only report negative information or to exclude important key data points such as credit limits.  If you have positive information and your creditors do not report it the bureaus, or if they only report negative or incomplete items, your credit score will be impacted negatively.  This is simply because you will not receive the benefit of this positive information when your credit score is calculated.

So why wouldn’t a creditor want to report information?  Some creditors are concerned that their competitors will obtain valuable information about their customers and then use this information to compete for the customers or evaluate certain lines of business.  Some creditors choose not to report to limit the potential liability imposed on data providers by the Fair Credit Reporting Act.  Some creditors simply want to avoid the costs associated with providing data altogether.  These costs include reporting expenses, dispute investigation expenses, compliance expenses, and system maintenance expenses.  Some regulated entities, such as telephone companies, are restricted by regulations as to the information they may report.  Some of these companies, for example, are only permitted to report data about accounts that are past due or are in a charged-off status.

If you are trying to improve your credit score, it is important that you work with creditors that report both positive information as well as the negative information.  It is also important that they report all of the information, not just selective data that may negatively impact your credit score even though your account is in good standing. Check your credit report frequently and verify that all of your creditors are reporting to the credit bureaus correctly.  Remember that your credit score is based only on the information that is reported, and your credit score could be higher if you have positive information that is not reported or not reported completely.

Call Now for a FREE Credit Consultation