We live in a credit driven world. This makes credit reports, and complete and accurate credit reporting, more important than ever. We suggest reviewing your credit report for inaccuracies or omissions on a regular basis (and certainly at least once a year). If you find any inaccuracies or omissions, you can use the Fair Credit Reporting Act (FCRA) to hold reporters and furnishers liable. You may be entitled to actual damages, statutory damages and/or punitive damages, as well as free attorney representation.
Your credit report is a picture of your credit risk. This picture reflects your risk at a specific point in time, and when you take another one, the picture will probably look a little different. When your credit information changes, your report and credit score will also change to reflect the updated information. There are steps you can take to ensure that each time a new snapshot of your credit history is taken it shows your best side.
Most potential lenders will look at your credit report and score before deciding whether to grant you a loan. Creditors want to know your track record in handling debt and how reliable you are based on your payment history. They use the records kept by credit bureaus or credit reporting agencies (business that collect and store information about borrowers). These records include the amount of debt you have and how faithfully you’ve paid it back and how high (or low) a credit score you have earned.
What is a credit report?
Credit reports are files which include information about you such as your financial history, your bill payment history, and whether you have been delinquent on any account. But credit reporting also includes details about you personally, including where you live and work, as well as whether you’ve been sued, arrested, and/or filed bankruptcy.
Consumer reporting agencies (credit bureaus) compile and sell your credit report to businesses who use this information to evaluate your applications for credit, insurance, employment, and other purposes. The FCRA protects you by controlling how creditors report payment history, how credit bureaus keep credit history records, and how this information can be shared among lenders. The law is purposely designed to promote accuracy and ensure the privacy of information used in credit reports.
The three major national credit bureaus maintain credit files on millions of consumers nationwide, and accurate reports are especially important if you’re considering a major purchase such as buying a home or car or applying for a new job. Checking in advance on the accuracy of information in your credit file could eliminate any surprises and speed the credit granting process. You qualify to get a free annual credit report from Experian, Equifax and Transunion.
Who has access to my credit reports?
Only people with a legitimate business or your permission can get a copy of your report. These include:
- Employers or prospective employers. More and more employers are relying on credit reports, background checks and the FCRA (known under the Fair Credit Reporting Act as “consumer reports”) to make hiring decisions. While this increasingly common practice is not necessarily unlawful, employers frequently run afoul the strong protections imposed by the FCRA designed to protect against the unfair use of consumer reports in the area of employment. It is unlawful for any person to use a “consumer report” about you for employment purposes unless you authorized such use in writing. If the employer wants to take adverse action against you, it must first provide you with a copy of the consumer report along with a copy of your rights under the FCRA.
- Insurance companies
Your record may not be given to anyone who does not have a legitimate business need for it. Stores to which you are not applying for credit or prospective employers may not examine your record, just like a curious neighbors may not.
Common examples where such “pulls” are “impermissible” include (but are not limited to) credit accounts where you are an authorized user, debts for traffic and parking tickets, and some medical procedures. If you think you are the victim of an impermissible pull, or just aren’t sure, call 888-332-7252 and speak to a lawyer experienced in fair credit reporting claims as excessive pulls may lower your credit score and give rise to a claim for monetary compensation to you from the debt collector.
Can debt collectors pull my credit report?
According to the Fair Credit Reporting Act, when your past due account is sent to collections, debt collectors can legally check your credit report where the original creditor has or had that right. Instances where the original creditor (and thus subsequent collectors) have that right (often referred to as a “legitimate business purpose”) include when you sign credit agreements such as mortgages, credit cards, auto loans, because in your application you also agreed to allow the creditor (and its designated representatives) to pull your credit reports on you anytime they feel it’s necessary.
However, if the original creditor did not have the right to access your report, the debt collector may not, and doing so can be an impermissible pull.
How do I get copies of my credit report?
The FTC requires the three major national credit bureaus to provide your credit reports once a year as a matter of right, for free. You are also entitled to a free copy of your report if you’ve been denied credit, insurance, or employment because of information supplied by a credit reporting agency. In addition, you’re entitled to one free copy of your report a year if you certify in writing that:
- You’re unemployed and plan to look for a job within 60 days;
- You’re on welfare; or
- Your report is inaccurate because of fraud.
Otherwise, a credit reporting agency may charge you per copy of your credit report.
You have the right to know everything contained in your credit report, including any medical information and the sources of such information. Make sure your report is accurate. If it isn’t, it could be costing you higher interest rates, higher insurance and other damages, which you can prevent. The three major bureaus may be reached as shown below:
P.O. Box 740241, Atlanta, GA 30374-0241; (800) 685-1111.
P.O. Box 2002, Allen, TX 75013; (888) EXPERIAN (397-3742).
P.O. Box 1000, Chester, PA 19022; (800) 916-8800.
What should I look for in my credit report?
The FCRA says that you must be told what’s in your file and have errors corrected. You are entitled to one free report from each bureau once every 12 months. When you get your credit report, look for:
Negative Information. If a lender refuses you credit because of unfavorable information in your report, you have a right to the name and address of the agency that keeps your report. Then, you may either request information from the bureau by mail or in person. You will not get an exact copy of the file, but you will at least learn what’s in the report. The law also says that the bureau must help you interpret the data–because it’s raw data that takes experience to analyze. If you’re questioning a loan refusal made within the past 30 days, the bureau is not allowed to charge a fee for giving you information.
Any error that you find must be investigated by the credit bureau with the creditor who supplied the data. The bureau will remove from your file any errors the creditor admits are wrong. If you disagree with the findings, you can file a short statement in your record giving your side of the story. Future reports to creditors must include this statement or a summary of it.
Old Information. Sometimes credit information is too old to give a good picture of your financial reputation. There is a limit on how long certain kinds of information may be kept in your file. For example, bankruptcies must be taken off your records after 10 years and suits and judgments, tax liens, arrest records, and most other kinds of unfavorable information must be dropped after 7 years.
What about inaccurate or incomplete credit reports?
Under the FCRA, both the credit reporting agency and the furnisher (the organization that provided the information to the credit reporting agency, such as a bank or credit card company) have responsibilities for providing and correcting inaccurate or incomplete information in your report. To protect all your rights under the law, contact the credit reporting agency, and in certain instances, the information provider.
If your report contains erroneous information, the bureau must correct it, including completing incomplete reporting. For example, if your file showed that you were late making payments, but failed to show that you were no longer delinquent, the credit reporting agency must show that you’re current. When the reinvestigation is complete, the bureau must give also you the written results and a free copy of your report if the dispute results in a change.
If an item is changed or removed, it cannot be put back in your file unless the furnisher verifies its accuracy and completeness, and the bureau gives you a written notice that includes the name, address, and phone number of the provider. And if your file shows an account that belongs to another person, it must be deleted.
Also, if you request, the bureau must send notices of corrections to anyone who received your report in the past six months. Job applicants can have a corrected copy of their report sent to anyone who received a copy during the past two years for employment purposes.
If a reinvestigation does not resolve your dispute, you can also ask the bureau to include your statement of the dispute in your file and in future reports.
Tell the bureau or credit reporting agency in writing what information you believe is inaccurate. Include copies (NOT originals) of documents that support your position. In addition to providing your complete name and address, your letter should clearly identify each item in your report that you dispute, state the facts and explain why you dispute the information, and request deletion or correction. Enclose a copy of a current credit report with the items in question identified. Send your letter by certified mail, return receipt requested, so you can document what the bureau received. Keep copies of your dispute letter and enclosures and follow these record keeping and mailing instructions.
What is re-aging a debt or reaging an account?
Re-aging a past-due account means your creditor sets the account due date back to current or marks payments as more current than they actually were. Reaging may be in violation of the Fair Credit Reporting Act and the Fair Debt Collection Practices Act, if the re-aging constitutes false information furnished or transmitted to a credit reporting agency. Re-aged debts may also restart a statute of limitations on collections. If you think you have a reaged account, contact an attorney for help.
What duties do the bureaus/credit reporting agencies have?
Bureaus must reinvestigate the items in question–usually within 30 days–unless they consider your dispute frivolous. They also must forward all relevant data you provide about the dispute to the furnisher. After the furnisher receives notice of a dispute from the bureau, it must investigate, review all relevant information provided by the bureau and report the results back.
If the furnisher cannot verify the disputed information to be inaccurate, it must notify the bureaus and correct this information in your file. Disputed information not verified must be deleted from your file.
Your credit file may also be incomplete as opposed to inaccurate, for example, it may not reflect all your credit accounts. If you’ve been denied credit because of an “insufficient credit file” or “no credit file” and you have accounts with creditors that don’t appear in your credit file, ask the bureaus to add this information to future reports. Although they are not required to do so, many will add verifiable accounts. You should, however, understand that if these creditors do not report to the bureau on a regular basis, these added items will not be updated in your file.
What are the statute of limitations on credit reporting negative information?
When negative information in your report is accurate, only the passage of time can assure its removal. Accurate negative information can generally stay on your report for 7 years. There are certain exceptions, including where you can leverage violations of your consumer rights.
Credit Reporting Agencies can report negative information as follows:
- General negative information
- late payments
- charge offs,
- information about a judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer.
- Bankruptcy information
Unlimited: (No time limit)
- Criminal convictions;
- Credit information reported in response to an application for a job with a salary of more than $75,000; and,
- Credit information reported because of an application for more than $150,000 worth of credit or life insurance.