Common Credit Report Errors You Need to Know About

Common Credit Report Errors You Need to Know About

Your credit report plays a crucial role in your financial life, influencing everything from loan approvals to interest rates. However, errors in these reports are more common than you might think. To protect your financial health, it's essential to regularly review your credit report and know what to look for. Let's dive into the most common credit report errors and how to spot them.

Identity Errors
One of the first things to check is the accuracy of your personal information. Look for:

• Misspellings in your name, incorrect phone numbers, or wrong addresses

• Accounts that don't belong to you but are listed under your name

• Suspicious accounts that could indicate identity theft

These errors might seem minor, but they can have significant consequences. For instance, a "mixed file" occurs when your information gets confused with someone else's, potentially affecting your credit score.

Account Status Inaccuracies
Next, scrutinize how your accounts are reported:

• Closed accounts incorrectly shown as open

• Accounts where you're listed as the owner instead of an authorized user

• Inaccurate reporting of late or delinquent payments

• Wrong dates for last payments, account openings, or first delinquencies

• Duplicate listings of the same debt, possibly under different names

These errors can significantly impact your credit score and financial opportunities.

Data Management Errors
Finally, check the numerical details:

• Incorrect current balances on accounts

• Inaccurate credit limits

Even small discrepancies in these figures can affect your credit utilization ratio, a key factor in determining your credit score.

What to Do If You Find Errors

If you spot any of these errors, don't panic. You have the right to dispute inaccurate information. Here's what to do:

1. Contact the credit reporting company that provided the report

2. Reach out to the lender or company that furnished the incorrect information

3. Follow the dispute instructions provided in your credit report

Remember, maintaining an accurate credit report is crucial for your financial wellbeing. By regularly checking your report and promptly addressing any errors, you can ensure that your credit score truly reflects your financial responsibility.Stay vigilant, and don't hesitate to take action if something doesn't look right. Your financial future may depend on it!

Check your credit report for free at Annual Credit Report

Credit Report Errors on the Rise: Why You Need Regular Credit Checkups

In an era where financial health is more crucial than ever, a disturbing trend has emerged: credit report errors are skyrocketing. Recent data from Consumer Reports shows that complaints about credit report inaccuracies filed with the Consumer Financial Protection Bureau (CFPB) have more than doubled since 2021, with nearly 645,000 complaints lodged last year alone.These errors are far from trivial. They can significantly impact your financial well-being, affecting your eligibility for housing, job opportunities, and access to credit. With so much at stake, it's clear that we need to take a more proactive approach to managing our credit reports.

The Credit Checkup Initiative

In response to this alarming trend, Consumer Reports and WorkMoney have launched the "Credit Checkup" project. This initiative aims to encourage consumers to regularly review their credit reports, identify inaccuracies, and report errors promptly to the CFPB. Why it matters: Your credit report is essentially your financial report card. It plays a pivotal role in shaping your financial future, influencing loan approvals, interest rates, job prospects, and housing options.

How to Conduct Your Credit Checkup

1. Access your free reports: Thanks to a policy implemented during the COVID-19 pandemic, the three major credit reporting agencies - Equifax, Experian, and TransUnion - allow consumers to access their reports weekly at no cost through AnnualCreditReport.com.

2. Scrutinize for errors: Common mistakes include incorrect personal details like names or addresses, and misreporting of debts related to loans.

3. Report inaccuracies: If you find errors, dispute them with each major credit bureau. Provide supporting documentation and a detailed explanation of the issue.

4. Keep records: Maintain copies of all correspondence and consider sending materials via certified mail.

5. Escalate if necessary: If disputes remain unresolved, escalate the issue to the CFPB. In some cases, legal assistance may be required.

Contact us if your disputes don’t get resolved

What Do Lenders Really See When They Check Your Credit Report?

What Do Lenders Really See When They Check Your Credit Report?

Have you ever wondered what lenders actually see when they pull your credit report? It's not just a mysterious number that determines your fate. Let's explore the key elements that lenders examine when reviewing your credit history.

Your Personal Profile

First things first, lenders will see your basic personal information:

- Full name

- Current and previous addresses

- Social Security number

- Date of birth

This information helps verify your identity and ensures they're looking at the right person's credit history.

The Credit Account Lowdown

Next comes the meat of your credit report – your credit accounts. Lenders will see:

- Types of accounts (credit cards, mortgages, auto loans, etc.)

- When each account was opened

- Credit limits and loan amounts

- Current balances

- Payment history (including on-time payments and any late payments)

This section gives lenders a comprehensive view of how you've managed credit in the past. They'll be looking for a history of on-time payments and responsible credit use.

Public Records and Collections

Any public records related to your finances will show up here. This includes:

- Bankruptcies

- Tax liens

- Judgments

- Collection accounts

These items can significantly impact your creditworthiness, so lenders pay close attention to this section.

Credit Inquiries

Lenders can see who else has been checking your credit. There are two types of inquiries:

1. Soft inquiries (when you check your own credit)

2. Hard inquiries (when you apply for credit)

Too many hard inquiries in a short period can be a red flag for lenders, suggesting you might be taking on too much new credit.

Credit Scores

While not technically part of your credit report, lenders often receive credit scores along with the report. These scores, like FICO or VantageScore, provide a quick snapshot of your creditworthiness.

The Big Picture

Lenders aren't just looking at individual elements; they're piecing together an overall picture of your credit health. They'll consider:

- Length of credit history

- Credit utilization (how much of your available credit you're using)

- Mix of credit types

- Recent credit activity

What This Means for You

Understanding what lenders see can help you manage your credit more effectively. Here are some key takeaways:

1. Regularly check your credit reports for accuracy

2. Make payments on time, every time

3. Keep credit card balances low

4. Be cautious about applying for new credit

5. Maintain a mix of credit types if possible

Remember, your credit report tells your financial story. By managing your credit responsibly, you're writing a story that lenders will want to read – and one that could open doors to better financial opportunities in the future.

The CFPB Continues to Propose a Rule to Ban Medical Debt

The Consumer Financial Protection Bureau (CFPB) has proposed a rule to ban medical debt from credit reports. This has led to frustration among collectors and financial services firms. The proposal aims to help families recover from medical crises, prevent debt collectors from coercing people into paying bills they may not owe, and ensure that creditors do not rely on data that is often inaccurate. The CFPB's research shows that medical debt has little predictive value in credit decisions, and the data inaccuracies in medical debt reporting can erode the utility of the credit reporting ecosystem. Some collectors have already been moving away from reporting medical debt to credit agencies due to concerns about data integrity and their ability to comply with the Fair Credit Reporting Act

Consequences

The potential consequences of the CFPB's plan to ban medical debt from credit reports are a subject of debate. Collectors and financial firms claim that the proposal would restrict lending, raise borrowing costs, and result in more denials of credit to consumers. They argue that hiding medical debt from credit bureaus would further reduce credit scores' utility as a proxy for a borrower's ability to repay, which they believe doesn't benefit anyone.

The potential consequences for consumers are still uncertain and will likely depend on the outcome of the CFPB's proposal and any subsequent changes to the credit reporting system.

Arguments

The arguments against the CFPB's plan to ban medical debt from credit reports are primarily related to the CFPB's funding structure and the potential impact on the credit reporting system. The CFPB's funding mechanism, which allows it to request funding from the Federal Reserve instead of Congress, has been the subject of a legal challenge. Critics argue that this funding structure insulates the CFPB from congressional oversight and that the agency's actions, including the proposed rule on medical debt, could be called into question if the funding mechanism is found to be unconstitutional.

Efforts

CFPB research found that 58 percent of all third-party debt collection tradelines were for medical debt, making medical debt the most common debt collection tradeline on credit records in 2021. Last March, the big three credit reporting conglomerates, Equifax, TransUnion, and Experian, announced that they would stop reporting some, but not all, medical bills on an individual’s credit report. Large credit scoring companies are moving to models that completely or partially exclude medical bills, though many creditors still rely on older models that haven’t made that shift. VantageScore, an entity owned by the conglomerates, has stopped using medical debt in its scores entirely.

Last April, Vice President Harris launched an all-of-government effort to address the burden of medical debt, and to increase consumer protections around billing and collections. At the time, the Consumer Financial Protection Bureau issued a bulletin to prevent unlawful medical debt collection and reporting in light of the No Surprises Act. The CFPB has taken many steps to ensure that patients are not being unfairly treated, particularly when it comes to coercive credit reporting and collection tactics.

Rohit Chopra, director of the Consumer Financial Protection Bureau, continues to defend the agency's proposal to prevent credit bureaus from considering medical debt in consumer credit scores

What Does Your Credit Score Mean?

If you know your credit score but don't know what the number means, there are several resources available to help you understand your credit score and how it impacts your financial health. Here are some steps you can take:

1. Understand what a credit score is: A credit score is a three-digit number that represents your creditworthiness, or the likelihood that you will pay your bills on time. It is calculated based on the information in your credit report.

2. Learn about credit score ranges: Credit scores typically range from 300 to 850, with higher scores indicating better creditworthiness. Different lenders may have different criteria for what they consider a "good" credit score, but generally, a score above 700 is considered good.

3. Understand how your credit score is calculated: Credit scores are calculated based on several factors, including payment history, amounts owed, length of credit history, new credit, and credit mix.Understanding these factors can help you identify areas where you can improve your credit score.

4. Check your credit report: Your credit report contains the information that is used to calculate your credit score. You can request a free copy of your credit report from https://www.annualcreditreport.com Reviewing your credit report can help you identify errors or inaccuracies that may be impacting your credit score.

5. Take steps to improve your credit score: If your credit score is lower than you would like, there are several steps you can take to improve it. These include paying your bills on time, paying down debt, and avoiding opening too many new credit accounts at once.

Credit Score Range

Credit scores typically range from 300 to 850, and different credit score ranges can indicate different levels of creditworthiness. Here are the most common credit score ranges and what they mean:

1. Poor: A credit score below 580 is generally considered poor and may make it difficult to qualify for credit or loans.

2. Fair: A credit score between 580 and 669 is considered fair and may qualify you for some credit or loans, but at higher interest rates.

3. Good: A credit score between 670 and 739 is considered good and may qualify you for credit or loans at competitive interest rates.

4. Very Good: A credit score between 740 and 799 is considered very good and may qualify you for credit or loans at even more competitive interest rates.

5. Exceptional: A credit score above 800 is considered exceptional and may qualify you for the best interest rates and terms on credit or loans.

It's important to note that different lenders may have different criteria for what they consider a "good" credit score, and credit score ranges can vary based on the scoring model used to evaluate them. However, understanding these credit score ranges can help you gauge your credit health and take steps to improve your credit score over time.

How Often Do Credit Scores Update?

Credit scores typically update at least once a month, but the frequency could vary depending on your lenders and unique financial situation. Lenders usually report updated information every 30-45 days, so it's possible you might receive an updated credit score each month.

However, every lender has its own reporting schedule and policies, so there is no set date each month when you can expect your credit scores to be updated. The information in your credit reports must update first before your credit scores can update.

The frequency of credit score updates depends on how many active credit accounts you have and when each of those lenders reports new information

It's important to note that each credit monitoring service may update at different times, and not all lenders report to all three credit reporting agencies, which is one reason why you may see some variations in your credit scores.

Several factors can affect credit scores, including:

1. Payment history: Payment history is the most significant factor that affects credit scores, accounting for 35% of the total score. It considers whether you have paid your bills on time for each account on your credit report, including credit cards, loans, and other debts.

2. Amounts owed: The total amount you owe on your credit accounts and the percentage of your available credit that you are using also affect your credit score. This factor makes up 30% of your credit score.

3. Length of credit history: The length of time you have had credit accounts is another factor that affects your credit score, accounting for 15% of the total score. The longer your credit history, the better your score.

4. New credit: Opening new credit accounts can also affect your credit score, making up 10% of the total score.

5. Applying for multiple credit accounts in a short period can negatively impact your score.

6. Credit mix: The types of credit accounts you have, such as credit cards, loans, and mortgages, also affect your credit score. This factor makes up 10% of the total score. Having a mix of credit accounts can positively impact your score.

It's important to note that different credit-scoring models may weigh these factors differently, and lenders may also consider other factors when evaluating your creditworthiness. However, understanding these factors can help you manage your credit accounts and improve your credit score over time.

Ultimately, it's a good idea to check your credit reports regularly for accuracy and monitor your credit score to ensure that you are aware of any changes.

You can check your credit report for free once a week at: https://www.annualcreditreport.com

This site provides your full report from Experian, Equifax, and TransUnion.

Basics of Consumer Credit

What is Consumer Credit?

Consumer credit is the borrowing of money for goods and services. This could be in the form of credit cards, personal loans, and other lines of credit. Total consumer credit comprises of two major types: revolving and non-revolving. The borrower agrees to pay back the borrowed amount plus interest over a set period of time, usually in monthly installments. Consumer credit is commonly used for big purchases such as cars, homes, and education.

Revolving credit

Revolving credit lets you borrow up to the pre-approved credit limit. The borrower is required to make monthly payments either on the full amount or regular payments. Interest is charged on the outstanding balance. Examples include credit cards, home equity lines of credit (HELOCs), and personal and business lines of credit.

Non-revolving Credit

Non-revolving credit is a type of credit a borrower repays in fixed payments over a set period. Unlike revolving credit, a non-revolving credit is a one time arrangement. Once the credit line is paid off, the lender closes the account. Examples include: home mortgage loans, student loans and business loans.

What is a Credit Report?

A credit report is a record of an individuals credit activity and current credit situation. The report is created by the credit reporting agencies also known as credit bureaus or credit reporting companies, that collect information about an individual’s credit accounts, payment history, and other financial transactions that is submitted to them by creditors, such as lenders, credit card companies, and other financial companies. Creditors are not required to report to every credit reporting company.

What’s in My Credit Report?

Your credit report will include:

Personal information

• Your name and any name you may have used in the past in connection with a credit account, including nicknames

• Current and former addresses

• Birth date

• Social Security number

• Phone numbers

Credit accounts

• Current and historical credit accounts, including the type of account (mortgage, installment, revolving, etc.)

• The credit limit or amount

• Account balance

• Account payment history

• The date the account was opened and closed

• The name of the creditor

Collection items

Public records

• Liens

• Foreclosures

• Bankruptcies

• Civil suits and judgments

• A credit report may include information on overdue child support provided by a state or local child support agency or verified by any local, state, or federal government agency.

Inquiries 

Companies that have accessed your credit report.

What are Inquiries?

An inquiry is a record of when a lender, a creditor, or other authorized entity requests to see your credit report. There are two types: hard inquiries and soft inquires.

Hard Inquiry: Occurs when a lender or creditor requests to see and individual’s credit report as part of a credit application for a loan or credit card. Hard inquires can impact a credit score and remain on a credit report for up to 2 years. Multiple hard inquiries within a short period of time can signal to lenders that an individual is seeking a lot of credit, which could be interpreted as a sign of financial distress.

Soft Inquiry: Does not impact credit scores and are not visible to lenders. Soft inquiries can be initiated by the individual when checking their own credit report or by organizations like employers or credit monitoring services.

How Do I Check My Credit Score?

As of April 2023, Annual Credit Report is still allowing access to free credit reports once a week. Go to this link: https://www.annualcreditreport.com/index.action to get your reports from Equifax, Experian, and TransUnion.

What if I See Errors?

If you see errors on your credit report, dispute the information with the credit reporting company in writing. Explain what you think is wrong, why, and included documents that support your dispute.

What is e-OSCAR?

e-OSCAR is the “Online Solution for Complete and Accurate Reporting” system through which the consumer reporting industry (consumer reporting agencies and data furnishers) resolve disputes brought by consumers concerning the accuracy of information maintained in their credit files.

When a consumer contacts a consumer reporting agency with a dispute, the agency transmits an electronic form called an ACDV through e-OSCAR to the data furnisher. The data furnisher responds to the consumer’s dispute by returning the ACDV through e-OSCAR. For example, if a consumer disputes the accuracy of the payment history on their Citibank credit card to Trans Union, Trans Union will send an ACDV to Citibank informing Citibank of the consumer’s dispute and Citibank will respond to that dispute by returning the ACDV to Trans Union.

e-OSCAR also allows data furnishers to correct or delete a consumer’s account by sending an electronic form called an AUD. When a consumer contacts a data furnisher and requests a change of information that has been previously reported, the data furnisher researches the account. If the data furnisher verifies that the account information in question needs to be modified, the company will use the e-OSCAR system to complete an AUD.

Actual Payment Information Suppressed

The biggest credit card companies are suppressing actual payment information on credit reports.

The CFPB reported in 2020 that the largest credit card companies are purposely suppressing customers’ actual payment amounts from their credit reports.  Actual payments are the amounts the borrower repays each month, as opposed to the minimum payments or balance. This means that millions of borrowers are missing key information of their repayment behaviors that impacts their credit. This suppression harms the opportunity to receive better financial offers and costs billions of dollars in interest expenses.

As of 2022, the CFPB reported that Americans paid over $120 billion annually in interest and fees on credit cards and since then the average interest rates charged by credit card companies have been quickly increasing.

Last May, the CFPB sent letters to the CEOs of the nation’s largest credit card companies - JPMorgan Chase, Citibank, Bank of America, Capital One, Discover, and American Express - asking if they furnished actual payment information. They asked why they stopped sending complete data and if they had plans to change their practice.

They learned that:

• One large credit card company took the move first, and the others started suppressing their data shortly after.

• The companies didn’t say when they intended to restart reporting actual repayment information.

• Companies suppress data to limit competition. By withholding information it made it harder for competitors to offer more profitable and less riskier customers better rates, products, or services.

Credit card companies are making it difficult for people to shop for credit and to save money. People expect that their credit behaviors - like paying credit card bills in full each month will be reflected in their consumer reports and credit offer they receive.

More Information from the CFPB: CFPB Summary

Credit Reporting: Compliance Condition Code

What is the Compliance Condition Code (CCC)?

The is reported in a Metro 2 data field which allows furnishers to report a condition that is required for legal compliance. CCCs are used to reflect accounts closed at consumer’s request, and consumer disputes under the Fair Credit Billing Act (FCBA), the Fair Debt Collection Practices Act (FDCPA), or the direct dispute provisions of the Fair Credit Reporting Act (FCRA) .

According to the Consumer Data Industry Association (CDIA), which publishes yearly written reporting procedures on behalf of the national consumer reporting agencies (Trans Union, Equifax and Experian) to be followed by their data furnishers, CCCs should not be reported in response to a consumer dispute investigation request the data furnisher receives directly from the consumer reporting agencies, unless the data furnisher uses a CCC to satisfy its FDCPA obligation to communicate that a debt is disputed.

When the CCC is used to report that some information about the account is or was in dispute, this “dispute flag” should, in principle, be removed or changed to indicate the investigation is complete. In practice, furnishers and consumer reporting agencies often fail to remove this dispute flag from the CCC field after a consumer’s dispute has been resolved. As a result, the dispute flag often remains on the account long after the consumer’s dispute. Moreover, the dispute flag provides essentially no detail on the content of the dispute, including whether the dispute was initially lodged with the furnisher or the consumer reporting agency.

Hyundai Hurting Credit Reports

On July 26th on the Consumer Financial Protection Bureau (CFPB) penalized Hyundai Capital America (Hyundai) for providing inaccurate information to nationwide credit reporting companies and did not take the proper measures to address or correct this information when it was identified between 2016 and 2020.

Hyundai Capital America serves approximately 1.7 million drivers of Hyundai, Kia and Genesis vehicles and has agreed to pay a $6 million civil fine and $13.2 million in restitution to current and former customers, making this the CFPB’s largest Fair Credit Reporting Act case against an auto servicer.

The CFPB found that Hyundai used manual and outdated systems, processes, and procedures to furnish credit reporting information. This resulted in Hyundai providing negative inaccurate information over 8.7 million times across 2.2 million accounts from January 2016 to March 2020, damaging customers’ credit reports and often resulting in lowered credit scores.

In a statement Hyundai Capital America stated that it launched an “end-to-end review” of it’s credit reporting, and was committed to giving customers “timely, accurate, high-quality service and care.” In the investigation the CFPB received many consumer complaints that Hyundai was inaccurately reporting their accounts. Hyundai identified many of the issues causing these inaccuracies in its internal audit books but it still took years to address the problems.

The CFPB concluded that between January 2016 and March 2020 Hyundai violated the Fair Credit Reporting Act (FCRA) and it’s implementing regulation, Regulation V, by:

• Failing to report complete and accurate loan and lease account information: Hyundai repeatedly did not take steps to promptly update and correct information it furnished to credit reporting companies that it determined was not complete or accurate, and continued to furnish this inaccurate and incomplete information.

• Failing to provide date of first delinquency information when required: FCRA requires data furnishers to provide credit reporting companies the date of delinquency for when a delinquent account is being charged off or placed for collections. Hyundai failed to report a date of delinquency for many consumers who were more than 90 days delinquent.

• Failing to modify or delete information when required: Hyundai’s furnishing system often overrode manual corrections made by employees in responding to consumer disputes. The furnishing system would provide monthly updates to credit reporting companies that reintroduced the data error after it had been disputed and corrected.

• Failing to have reasonable identity theft procedures: FCRA requires furnishers to respond to any notifications from credit reporting companies about furnished information that is the result of identity theft. Hyundai failed to establish reasonable identity theft and related blocking procedures to respond to identity theft notifications, and continued to report such information that should have been blocked on a consumer’s report.

• Failing to have reasonable accuracy and integrity policies and procedures: Regulation V requires furnishers to maintain written policies and procedures regarding the accuracy and integrity of the information furnished. Hyundai failed to review and update its credit reporting furnishing policies and procedures from 2010 to 2017. It was not until 2021 that the company finally updated some of its credit reporting policies and procedures.

Enforcement Action

The CFPB was created by the Consumer Financial Protection Act, and has the authority to take action against institutions violating consumer financial laws, including engaging in unfair, deceptive, or abusive acts or practices and violating FCRA, which protects consumers from the transmission of inaccurate information about them. Today’s order requires Hyundai to:

• Pay $13.2 million in compensation to current and former customers: As identified by the CFPB, consumers about whom Hyundai, after determining the information was inaccurate, furnished to credit reporting companies inaccurate information that the consumers were 30 or more days past due on an automobile retail installment contract or lease will receive compensation for the harm incurred.

• Pay a $6 million fine: Hyundai will pay a civil money penalty to the CFPB, which will be paid towards the victims relief fund. This fund provides compensation to consumers harmed by violations of federal consumer financial protection law.

• Take steps to correct all inaccurate account information: Hyundai will review all account files that it currently furnishes to credit reporting companies and correct all inaccuracies and errors described in the order and send updated information to the credit reporting companies. Hyundai will also examine its monthly furnishing data processes for the errors described in the order, take reasonable steps to identify such errors, and resolve identified errors before providing the data to any credit reporting company.

• Address procedures identifying and correcting inaccurate information: Hyundai will establish and implement written policies and procedures regarding the accuracy and integrity of the information relating to consumers that it furnishes to a credit reporting company. Hyundai must specifically include processes for identifying and promptly correcting systemic errors in Hyundai’s credit report furnishing system. Hyundai will also examine current policies and procedures and implement changes to the practices of its employees to ensure that its employees properly route, categorize, investigate, and respond to all direct and indirect credit reporting disputes.

Changes in Medical Debt Reporting

The nation’s largest credit reporting agencies; Equifax, Experian, and TransUnion announced on Friday that many U.S. consumers will have their medical debt wiped from their credit reports. 

In a joint statement, they stated that nearly 70% of medical collection debt accounts from consumer credit reports would be removed after conducting months of market research. The changes will take effect July 1, 2022.

Paid medical debt will no longer be included on consumer credit reports. Credit bureaus plan to extend the timeline reporting how long a medical bill is sent to collections. Typically a medical bill is sent to collections after 180 days. Consumers will now be given up to one full year. This will give consumers more time to work with insurance and/or medical providers to address their debt before it is reported to their file without it impacting their credit score.

 Most medical debts in collection on consumer credit reports are under $500. Beginning in the first half of 2023 Experian, Equifax, and TransUnion will no longer include unpaid medical collection debt that is under $500, though that threshold may increase. 

This does not change the responsibility of the consumer to pay, but it may alleviate some of struggle consumers face when trying to apply for credit. 

What is an ACDV?

The largest search we find on our page concerns ACDV’s. So, what is an ACDV? 

An ACDV is an Automated Credit Dispute Verification form that  is used by the credit reporting agencies to communicate consumer disputes to lenders and collection agencies. 

ACDVs are transmitted to furnishers via an electronic system known as the "E-OSCAR" system, which is an automated system that enables furnishers and credit reporting agencies (CRA’s) to create and respond to consumer credit history disputes.

The ACDV process tracks and manages an ACDV initiated by a credit reporting agency on behalf of a consumer and routes it to the appropriate furnisher.

The furnisher then, returns the ACDV to the initiating CRA with the updated information (if any) relating to the consumer's credit history.

In responding to an ACDV, a furnisher informs the CRA’s if the disputed information is "Verified" or if the disputed information should be "Changed" or if the disputed item of information should be "Deleted".  To do this the furnisher literally checks a box. 

Once checked, this will instruct the CRA that all information about the disputed tradeline is, in fact, accurate and that no changes should be made. If a furnisher chooses to change information, it will check a box called "Change Data As Shown" and then will input changes into the various fields of information that need to be changed. Whenever a furnisher directs a CRA to change information on a consumer’s credit file, that furnisher affirms to the CRA that it has made the same changes to its own systems.  This affirmation is made by the furnisher on the form used to process the dispute. 

Free Report Weekly Until April 2022

On March 2, 2021 the three major credit bureaus, TransUnion, Equifax, and Experian in a joint statement said that they will continue to offer consumers free weekly credit reports until April 20, 2022 due to the ongoing COVID-19 pandemic. 

Prior to the pandemic, credit bureaus were required by law to provide a single free report just once a year and consumers were charged about $20 each additional time they needed one. 

Frances Creighton, president and CEO of the Consumer Data Industry Association, which represents the three credit bureaus told Consumer Reports Inc.: “None of us could have foreseen that the pandemic situation would last longer than a year.” This time is especially important for consumers to have the key to their financial information. 

Credit reports are used by lenders to determine whether you’re a good credit risk. Your credit report shows whether you made mortgage, credit card, auto loans, and/or student loan payments on-time. Employers, potential landlords, cellular service providers, and employers are able to review your report with your permission. 

Your credit score is calculated by the information in your credit report. This is the three-digit number that is meant to determine your creditworthiness. Getting a credit report on a regular basis can help consumers monitor their information because changes in the report can happen daily. 

You can obtain your credit reports at AnnualCreditReport.com. The credit reporting industry has seen an unprecedented amount of consumer complaints made to the Consumer Financial Protection Bureau over errors discovered in credit reports. Credit report errors accounted for nearly 2/3 of the total complaints in 2020, which is a rise of 23% from 2019 according to the CFPB’s complaint database. 

It was found that up to 1/4 of credit reports contain at least one mistake according to a 2012 Federal Trade Commission Report. Consumer Reports Inc. conducted a nationally representative survey of 2,223 U.S. adults in January 2021 and found that 12% of Americans who checked their credit report found an error. 

Errors include anything from incorrect address information to more serious problems, such as loans that are listed multiple times, paid-off loans that appear as still open, and/or information about someone else’s account that appear on your account. 

Last year, in another survey, participating consumers noted a range of mistakes on their reports. One man found that his mortgage was listed twice. His bank had promised to fix the error but it still remained on his report months later. Another consumer’s report had his sons information mixed with his own. One other found that an unpaid bill had went into collections in a state he had never lived in. 

These errors can negatively affect a consumers credit score and could be a particular problem for people who deferred loan payments with lenders or credit card companies. 

Last May, the Coronavirus Aid, Relief, and Economic Security Act was passed and required companies providing federally backed mortgages and student loans to offer deferrals while still reporting to the credit bureaus that the loan is current. Some credit card companies and auto lenders also offered deferrals. For some, those deferred loan payments were still being reported as late. This is another good reason to check your report often. 

There are consumers who are advocating that credit reports should be free permanently. They feel that consumers should not be charged to access their own data. Chi Chi Wu, an attorney at the National Consumer Law center, who has a focus on credit issues, said: “There’s nothing I can think of that would legally or logistically prevent the Big Three credit bureaus from making free weekly reports permanent”. 

Credit bureaus are suppose to look at all supporting documentation when a consumer files a dispute, but they very often do not. Agencies should ensure that any supporting documents a consumer submits in the automated dispute filing is considered in the bureau’s review of their case. Oftentimes the task of reviewing disputes is outsourced and the bureaus will usually accept the results of the outsourced investigation without questioning the accuracy of the findings. 

Currently, credit bureaus will only match 7 of the nine digits of a social security number in the consumes report. To avoid errors, advocates are pushing for the bureaus to require the matching of all nine digits. 

If you find an error in your report you should file a dispute with the three credit bureaus. TransUnion, Equifax, and Experian are separate companies so the disputes must be filed to each. It is best to send a letter by certified mail and keep copies for yourself. The paper trail will make it easier to confirm that the credit bureaus are following the lawful time lines. You should avoid filing disputes online because often credit bureaus have standardized forms that might force you to oversimplify your situation and never have an actual representative look at the dispute. 

Along with the letter, you should include any evidence. This could be account statements or information on payments made that will protect you from a credit bureau dismissing your claim because of lack of sufficient backup information. Avoid resubmitting a evidence later on because it could be denied if the claim is considered similar to previous ones. 

Dispute Still Denied

If your disputes get denied consider hiring an experienced lawyer to file a case. We specialize in FCRA law, your consultation is free, and your legal fees will be covered so there is no out of pocket expense. 

Personal Statement 

You are able to add a personal statement to your report to help explain your situation. Banks and other institutions will typically read and consider this note when making a decision about your creditworthiness, especially if you lost a dispute and have a negative item on your report. 

Ask to send updated report

If you won a dispute you should ask the bureaus to send out an updated report. This new report will go to anyone who has checked your report within the past six months. 

Twitter Shredded by Credit Karma's Comically Inaccurate Scoring

Last week, Twitter was bombarded with consumers expressing their (hilarious) frustrations concerning their credit scores provided by Credit Karma, the personal finance company owned by Intuit. 

The frustration comes from users realizing that Credit Karma is providing them with lower credit scores than what is found on their credit reports. 

Consumers were tweeting about applying for credit cards, loans, and attempting to purchase vehicles thinking that they had good or excellent credit, only to find out that the credit score that the issuer pulled was lower than what they had found on Credit Karma. The tweet that started the meme trend can be found here.  

Twitter users were quick to share and create memes about how their credit score was inflated on Credit Karma. @RiotGrlErin had even tweeted “checking your credit score on credit karma is like checking your symptoms on WebMd.”

But, users were on to something important when it comes to checking your credit score. There are many reasons why your credit scores differ between what a personal finance website tells you and what lenders or credit card companies find. There are mainly two reasons: For one, a lender may pull your credit from different credit bureaus, either Equifax, Experian, or TransUnion. Your score can differ depending on which bureau your report is pulled from, since they do not all receive the same information about your credit accounts. Secondly, there are different credit score models and versions that exist across the board. 

Credit Karma’s website states that they use the VantageScore® 3.0 model. VantageScore may look at the same facts that the other popular FICO scoring models does, such as your payment history, amounts owed, length of credit history, new credit and your credit mix but each scoring model weighs these factors differently. Because of this, VantageScore and FICO Scores tend to vary from one another. The VantageScore® 3.0 on Credit Karma will likely be different from your FICO Score that lenders use most often. If you are planning on applying for credit, make sure to check your FICO score since there is a good chance that lenders will use this to determine your creditworthiness. FICO Scores are used in over 90% of U.S. lending decisions. It is important to note that there are also industry-specific FICO Scores to look at when you are planning a specific purchase. For example FICO® Auto Scores are ideal if you are wanting to finance a car with an auto loan. If you are planning to buy a house you should look at FICO® Scores 2, 5 and 4. 

The best way to look at your scores is to visit www.annualcreditreport.com where you can access and download your reports from Equifax, Experian, and Trans Union. Due to Covid, your report is free to access once a week until April 2021. 

Feel free to shoot us a message for any questions!