What is an Inaccuracy in a Credit Report?

What is an Inaccuracy in a Credit Report? 

Many consumers misunderstand what an inaccuracy is considered on a credit report. 

Here are some examples of Inaccuracies you may find in a Credit Report: 

• Accounts that don’t belong to you

• Addresses that don’t belong to you

• Social security number that doesn’t belong to you

• A name that is not yours

• Current or previous employers you didn’t work for

• Old Records that should have been removed

Examples: 

• Bankruptcies can be reported for ten (10) years

• Civil suits, judgments, and records of arrest can be reported for seven (7) years

• Paid tax liens can be reported for seven (7) years from the date of payment

• Accounts placed in collections can be reported for seven (7) years

Here are some examples that consumers commonly confuse for inaccuracies:

• Accounts that belong to the consumer but claim they didn’t get the bill or didn’t get the chance to pay. 
  

• Being charged with a “Collateral Attack” *example* - an apartment complex charges a tenant  for various things written in the contract but tenant believes they do not owe the charges and refuses to pay - then charges show on credit report. 

• Filing for bankruptcy but still still having negative marks on credit accounts. 
  

• Having a loan extended but still having a late or non payment show up up. 

There are more examples that could effect your credit score. Don’t be afraid to reach out for questions. Many consumers are confused about how credit reports work. It’s a frustrating process.

What is a Charge-Off?

Put simply, a charge-off is put in place when you miss too many payments and your account goes unpaid, a creditor may prevent you from making additional charges. Even if a creditor stops trying to collect on your account, you could still be responsible for the debt. 

A charge-off is the last resort that creditors take and decide that the debt is a loss for the company. You could potentially end up with an unpaid charge if your account becomes delinquent. This can happen with credit card debts and installment loans like an auto loan, personal loan or student loan.

This does not mean you’re off the hook. Even if your account is listed as a charge-off and the creditor is taking the loss, you’re still responsible for paying back the debt. A charge-off can remain on your credit history and show up on your credit reports for up to seven years from the date your missed payment was reported. 

How does a charge-off end up on your credit reports?

Once a creditor writes off your account, it may be reported as a charge-off to the credit bureaus, which translates to a derogatory mark on your reports. The derogatory mark can stay on your reports up to seven years. The creditor may sell your account to a third-party collections agency if the debt was unsecured. If this is the case, your account could appear as an “account in collections” on your reports. When this happens, your credit score may lower and it will become more difficult to qualify for credit or get competitive interest rates. 

The Difference Between a Charge-Off, a Write-Off, and a Transfer

A charge-off and a write-off are the same thing: A creditor decides that you are not likely to pay back the debt and prevents you from making additional charges on the account after the account becomes severely delinquent. This may have a negative effect on your credit. However, a transfer can be neutral. This means the original creditor has sold your account or moved it to a different creditor. The account may be transferred in good standing or listed as a charge-off. 

How does a charge-off affect your credit? 

Before your account was officially a charge-off — you probably missed a number of payments. These missed payments can significantly damage your credit because payment history is a major determining factor on your credit scores. Your scores will most likely suffer further if the account is listed as a charge-off because of the derogatory mark. 

If your account is in collections, it may also lower your credit scores. Not paying the collections agency can further damage your credit, because the agency can report missed payments to the credit bureaus. 

In positive news: if you show that you use credit responsibly from here forward — such as making on-time payments and being proactive about your debt — then the effects of the derogatory marks on your credit reports can begin to diminish after about 2 years. And, thanks to the Fair Credit Reporting Act, you have the right to have negative information like a charge-off removed from your credit reports after seven years. 

Should you pay a charged-off account?

You should first verify that the charge-off account is accurate. If there is a charge-off account on your credit reports, you should verify all of the information. 

Make sure to look at these things:

• Your account may be sold a few times through third-party collections agencies. Make sure each sold account is marked “closed” and has a zero balance. Only the most current collections account should be listed as open.

• Check the outstanding balance. If it’s more than you think it should be, ask the creditor to explain any additional costs or make the correction.

• Verify the charge-off date on the original account as well as any offspring accounts in collections. The charge-off date should be the date of your first delinquent payment on the original account.

Is the charge-off is legitimate

If you find that the charge-off is legitimate, it is important that you take action to pay it off. It may be tempting to to not pay the charge-off, since the lender has likely stopped trying to collect on the account. But as long as the debt is yours, you’re legally responsible for it until it is paid, settled, or discharged in a bankruptcy filing. Plus, the charge-off can ruin your chances of getting a loan. Some lenders require that you pay all outstanding debt before you take out a mortgage or other types of loans. 

If the charge-off is an error

Don’t pay the charge-off if you find that it was made in an error. If it was an error or if it isn’t removed from your reports after 7 years, you can file a dispute. TransUnion, Equifax, and Experian have a dispute option and are required to review them within 30 days. However, it is best to write a letter and send the dispute by certified mail. This method removes the computer generated checking and lets you know that a real person has investigated your information. 

How to pay charged-off accounts

• Communicate with the original lender.

If the debt hasn’t been sold to a collection agency, you can work with the original lender to make payment arrangements. Once it is paid off, the lender will change the status of the account to “paid charge-off” and update the balance to 0. Lenders usually see a paid charge-off as more favorable than an unpaid debt. 

• Settle the Debt 

If you decide to negotiate a settlement and either the original lender or collection agency accepts less money than originally agreed, keep this in mind: It should appear on your credit reports as a “settled” charge-off. This could negatively impact your credit scores, but the account won’t be sent to collections. 

• Pay the collections agency

If the creditor sold the account to a collections agency, the you would pay the agency. Before you do, write to the agency and ask for proof that it owns the account. After you have paid off the debt, the account will appear on your reports as “paid collection”, which is more favorably viewed by lenders than an unpaid account.  

Once you have paid off the debt, through the original creditor or the collections agency, or via a settlement, make sure you ask for a final payment letter. You should also keep tabs on your credit reports. If the account isn’t shown as paid, you will have the letter as proof that you can use to help get your credit reports corrected. 

Removing a Charge-Off 

If the charge-off listed on your credit reports is legitimate, there is not much you can do to remove it. You can try negotiating with the original lender. If the account hasn’t been sold, you can offer to pay the debt in full exchange for the charge-off note to be removed from your reports .

Some debt collectors may offer to remove the charge-off note from your credit reports — this is sometimes knows as a “pay for delete” offer. It is important to note that lenders are required to report accurate and complete information, so any “pay for delete” service is unlikely to be successful. Otherwise, a charge-off should be removed automatically from your credit report after 7 years. 

Final Steps

Once you have taken care of the charge-off, you should take healthy credit steps to improve your credit. There are credit counseling services that help you make a budget and avoid delinquent payments in the future. 

If you have found an error on your credit report and investigations have failed. Contact us for help. 

Real Example of Mixed Credit File

Siblings, especially twins are more likely to have their credit files mixed than most people. One man had realized that his credit file continued to be mixed with his twin sisters file. The US credit rating agencies can’t seem to tell them apart. Sometimes they associate his social security number with her name and vice versa.  

When he applied for a job, his background check listed his name as hers; and his actual name was listed as an alias. They have both been consistently rejected for credit cards, despite both of them having good credit. Mitchell was denied a car loan by a bank that he had used for years. However, they did have luck obtaining housing. 

This is a problem that they have to worry about anytime they apply for credit. They never know what information is coming up when their file is pulled. 

The problem doesn’t lie within the banks or lenders, but the credit system. In the United States, the Big Three: Equifax, TransUnion, and Experian have the most control over our information. These companies obtain hundreds of data sources to predict your credit score. In this mass of data, mistakes happen. 

When a credit system messes up, consumers are supposed to have a recourse in fixing the problem. Each agency has a dispute process. When a consumer disputes an error, the credit bureaus are required to do an investigation. When that fails, consumers are oftentimes unsure of what to do. The next step is to file a complaint with the Consumer Financial Protection Bureau (CFPB), which will forward your complaint to the appropriate ratings agency. 

Unfortunately, these situations go in circles. The furnishes will verify your information with the creditors and the creditors will verify your information with the furnishes. In the twins situation, the male pulled his files and mailed in physical proof of his identity, such as his social security card and drivers license. After investigation, his reports still listed his sister as an alias or a former name. 

These situations are rarely heard of, but happen often. In this situation, it is likely due to their social security numbers “matching” in the system. Since they are twins, they were likely given social security numbers that are one digit off. The credit bureaus consider this a match, since they only verify 8 out of 9 digits. They also have the same last name, and likely lived in the same household growing up, giving the bureaus verification that they are the same person. 

We recommend that you check your credit reports a few times a year. This is especially important if you may have a relative with a similar name. Many people do not realize their credit has been compromised until they are denied credit. You can check your credit reports for free once a week until April of 2022 at www.annualcreditreport.com 

If you have investigations that keep failing, contact us for help. You may be entitled to a settlement. 

The e-OSCAR System

When delving into the credit reporting world, it is easy to get lost in the terminology. You see a lot of acronyms in credit reporting such as: CRA, DF, FICO, and FCRA, but this blog will discuss e-OSCAR. 

What is e-OSCAR?

OSCAR stands for “Online Solution for Complete and Accurate Reporting”. The “big three”: Experian, Equifax, and TransUnion owns and created this software in 1993. 

Put simply, e-OSCAR is an automated credit dispute system. This system was created due to the mass amount of manpower needed to process consumers’ claims of mistakes on their credit reports.  According to the Federal Trade Commission, at least 1 in 5 consumers has an error on one of their three credit reports and 1 in 4 of these errors have a negative impact on the consumers’ overall credit scores. It is recommend that you check your credit report at least once a year and report anything that seems incorrect. As of now, consumers are able to obtain their credit reports for free once a week until April 2022 due to the pandemic. 

Consumers can submit a complaint to the credit reporting agency by phone, online, or by mail. It is best to submit your dispute by mail, using certified mail, so that you have verification that they received it and that a real person will look into it. 

The bureaus receive letters topping the thousands each day. The bureaus created e-OSCAR to streamline the dispute process. 

Credit Disputes and e-OSCAR

Credit disputes involve a 3-step process: 

1. The credit bureau receives a credit dispute letter.

2. An employee reads the letter and assigns one of e-OSCAR’s 29 three-digit codes to classify the type of error.

3. The employee enters this code along with basic information about the consumer and creditor. They may also enter one or two lines of explanation.

e-Oscar Coding

When the credit reporting agency receives a dispute they enter it into the e-OSCAR system. Next, an e-OSCAR representatives categorize the complaint in one of 29 three-digit dispute codes. These codes include:

• 001 — not his/hers.

• 002 — belongs to another individual with same/similar name.

• 008 — late due to change of address or never received statement.

• 010 — settlement or partial payments accepted.

• 019 — included in the bankruptcy of another person.

• 038 — claims account closed by consumer.

In addition to the code that best fits the dispute, the agency may enter a few lines of explanation. Once e-OSCAR receives this data, the system creates and records a formal dispute. It then distributes the information to the other credit reporting agencies and to the appropriate data furnishers.

Issues with e-OSCAR 

Credit disputes are unique and complicated. Critics of the e-OSCAR system believe that neither a 3-digit code nor 2 lines of explanation are sufficient. Attorneys encourage consumers to send as much evidence as possible to support their claim. This makes it harder to credit bureaus to later claim that the error is your fault because you didn’t send enough informational evidence. Critics also question whether e-OSCAR staff fully review additional documents that provide support to the consumers complaint. 

What to Know About Disputes

Under the Fair Credit Reporting Act (FCRA), the Consumer Reporting Agency (CRA) has up to 45 days to resolve a dispute. If the error involves an account with your organization, the credit bureau will usually reach out to investigate the item you reported. CRA’s resolve only 15% of complaints without involving the data furnisher. After you provide a response to the dispute, the CRA will notify you of the verdict. The error will either be validated and will be corrected, or they have determined there was no error and the item is reported as accurate. 

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. 

You Can Repair Your Credit Without a Credit Repair Service

Credit repair companies can remove information on your credit report that is lowering your credit score but they cannot remove negative marks if the information is accurate, timely, and verifiable. Credit repair services can cost you around $100 a month, but everything the service does, you can also do on your own. 

Your credit score is calculated from information in your credit reports. A study from the Federal Trade Commission found that 5% of consumers had errors on their credit reports that could significantly lower their scores. 

Legitimate credit repair services check your reports for information that shouldn’t be there and dispute it on your behalf. They may also check to make sure the information does not reappear. Sometimes information that is accurate but cannot be substantiated is removed, but it could be reinstated if it is verified later. 

Errors that can be addressed: 

• Accounts that do not belong to you.
  

• Bankruptcy or other legal actions that were not yours.
  

• Misspellings, which may mix in negative entries that belong to someone with a similar name — or may mean positive entries aren't showing up when they should.
  

• Negative marks that are too old to be included.
  

• Debts that can't be validated and verified.

Using a credit repair service can cost between $79-$129, and the process could take several months to a year. You may also be required to setup a fee to begin. Credit repair services argue that you will save money because of lowered interest rates. It is true that lower interest rates go to borrowers with higher scores but it is also true that you can handle credit repair yourself. 

You can opt to fix your credit report on your own. Here is how: 

• Obtain your credit report: As of now you can retrieve your credit reports for free once a week at www.annualcreditreport.com until April 2022. Check all of your information and verify that it is accurate.

• Dispute errors: As a consumer, you can dispute errors directly with the three major credit bureaus. All three bureaus have an online dispute process, but it is more efficient to send in a complaint by certified mail. This provides proof of service and a real person will have to look at your information.

• Work on your payment history: The biggest factor affecting your credit score is your record of paying bills on time. If you have late or missed payments, that can drag your score down. It is important to bring your late accounts to current as soon as possible and consider writing a goodwill letter asking your creditor to remove the make from your credit reports.

• Use less of your available credit: How much of your available credit card limit you are using is known as your credit utilization ratio. The lower, the better for your score. If you can afford to do so, consider making multiple small payments in the billing cycle to help keep this ratio down.
  

Before deciding to use a credit repair service, know that you can do all of this on your own. It is as simple as looking through your reports and verifying the information without the cost. If you have inaccurate information on your credit report, you may be entitled to a settlement. 

If you find inaccurate information, be sure to dispute the information. If you need help, reach out to us for help in the process. We may also be able to obtain a settlement for you. 

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. 

What to Know About the 3 Major Credit Bureaus

Credit reports affect your life more than most people realize. When you are leasing or buying a new home, applying for loans or credit cards, getting insurance coverage, or applying for a new job, there is likely someone using one of your credit reports to evaluate you. 

Because your credit reports carry so much of your information, the companies in charge of putting together and selling them have a major influence over your financial life. These companies are known as credit bureaus. In this blog we will look closer at what the credit bureaus do and the rules they must follow. 

The three main credit bureaus in the U.S. are Equifax, TransUnion, and Experian. They are the three largest nationwide providers of consumer credit reports to lenders, insurance providers, employers and other companies who use credit information to help predict risk. 

Credit reporting has been around for over 100 years, but it has evolved over time. Credit bureaus use to be small and localized, but overtime the “Big Three”, as the major credit bureaus are known, attained may of these smaller credit agencies and consolidated their data into larger databases. 

Presently, each of the three major credit bureaus maintains a database with information of approximately 220 million U.S. consumers. When you apply for a loan and/or credit card, it is a given that the lender will access at least one of your credit reports provided by these three companies during the application review process. 

Big data, as the credit reporting industry is often called, brings in big money. The three main credit bureaus earn billions of dollars every year selling credit information to other companies. They collect information about you and sell it to others who are willing to pay for the data.  

How They Get Your Information

You may not recall giving credit bureaus permission to create a credit file about you, and you shouldn’t. This is because that is not how the bureaus work. Many companies that you and others owe money, are willingly sharing details about their customers with the bureaus. These companies include lenders, banks, credit card issuers, collection agencies, and others. These businesses are called data furnishes. Data furnishers opt to share information with the credit bureaus for many reasons. The biggest motivator is that credit reporting give a company’s customers extra motivation to pay their debts and to pay on time. 

Most of the data in credit reports comes from data furnishers, but the credit bureaus collect information in other ways too. When it comes to public records such as bankruptcies, the credit bureaus seek out purchase information from data aggregation companies like PACER, AKA Public Access to Court Electronic Records, and LexisNexis. 

Information the Credit Bureaus Collect

The credit bureaus collect a great deal of data to include in your credit report but ignores some details about your life also. For example, your credit reports do not include criminal records, income, or bank account balances. The information that they do collect for credit reporting purposes can generally fit into one of the five categories.

Categories:

1.Personal Information

• Name (current and previous)

• Addresses (current and previous)

• Date of Birth

• Employer

• SSN

2. Collections

• Accounts sold to, or managed by third-party debt collectors

3. Public Records

• Bankruptcies

• Previously included judgements and tax liens as well

4. Credit Inquires

• Details about when your credit was accessed during the last two years.

5. Accounts 

• Credit obligations (current and previous)

• Account numbers

• Payment History

• Current Balance

• Status (current, closed, past due, charged-off, etc.)

• Credit Limit

• Date of account opening

Credit bureaus collect this information for the reason that it is profitable. Other companies are willing to pay for your credit reports. Credit reports are helpful to lenders and other companies to predict the risk of doing business with you. Scoring models, like FICO and VantageScore, can also use these details to calculate your credit score. 

Credit Bureaus Must Follow Federal and State Laws

It I can be aggravating that the credit bureaus are allowed to collect sensitive financial information without your permission. Even though these companies are allowed to gather your information and sell it to others, there are rules in place to help protect you. 

At the federal level, the credit bureaus are obligated to follow the Fair Credit Reporting Act, also known as the FCRA. The FCRA is in existence to protect consumers and regulates what consumer reporting agencies are required to do when it comes to your information. The full text of the FCRA is over 100 pages, but here are some of the key provisions of the act:

• Credit Report Accuracy: The bureaus must impose “reasonable procedures” to assure “maximum possible accuracy” of the information concerning the individual. They should only be including accurate information on your credit reports. Should you discover credit reporting errors or fraud, the FCRA allows you to dispute the information. When you submit a credit dispute, the bureau must investigate your claim. They have 30 days to respond to the dispute and to delete information that isn’t verified as accurate. 

• Free Annual Credit Reports: It is a good idea to review your credit reports frequently. An amendment from 2003 to the FCRA, known as the Fair and Accurate Credit Transactions Act or FACTA, provides free access to each of your credit reports once every year. AnnualCreditReport.com is the website you should visit to access these free reports. The three major credit bureaus are offering a free weekly credit report access at this website until April 2021 in response to the Coronavirus pandemic.

• Permissible Purpose: The credit bureaus are only allowed to sell your credit reports to certain entities such as Lenders, insurance companies, landlords, and employers (with written permission). They may have “permissible purpose” to buy a copy of your report. In good news, someone such as your ex-partner or random creepers would be out of luck.

• Freezing Your Credit Report: You have the right to freeze your credit reports as a protective measure. When a credit freeze or security freeze is in place, companies you don’t have a current relationship with cannot access your credit information. In order to grant them access to your data, you must first unfreeze your report. An amendment established in 2018 to the FCRA, known as the Economic Growth, Regulatory Relief, and Consumer Protection Act, lets your freeze and unfreeze your reports for free.

• Opting Out: The credit bureaus are able to sell your information to certain companies for marketing purposes, even if you are not applying for financing. Your credit data may have been sold without your knowledge if you have ever received a prescreened offer of credit or insurance in the mail. Use the link OptOutPrescreen.com or call 888-5-OPTOUT (888-567-8688) if you wish to stop sharing your credit information for marketing purposes

Along with the FCRA, the credit bureaus must comply with state laws as well. For example, on top of the free annual credit reports provided by the FCRA, state law might require the credit bureaus to give you more free reports. In some states, employers aren’t allowed to review your credit information as a part of the background check. 

Different Credit Bureaus Contain Different Information

When reviewing your credit reports from all three bureaus, you will likely find similar information on each report. But, there are probably some differences as well. For example, your Experian credit report might show a collection account, while that account may be missing from Equifax and TransUnion. 

There are many reasons why your credit reports could contain slightly differing information. Here are a few examples:

• The credit bureaus are competitors and they do not share data with one another.

• Credit reporting is voluntary. Just because a data furnisher opts to share information with one bureaus does not mean it has to report information to all of them. The most major lenders will report to all three credit bureaus.

• The consumer doesn’t always understand the dispute process. Someone might dispute an incorrect item with one credit bureau, but not the other two. This could results in an incorrect account being deleted form one credit report while it remains on the others.

• Dispute results can be inconsistent. Even if you dispute an inaccurate account with all three credit bureaus, the results may vary. Each bureau will conduct its own investigation. So, while a data furnisher might verify the account as accurate with one credit bureau, it could also fill to respond to the others. This might lead to a disputed account remaining on one or more of your reports, but not all of them.

• Your credit file could be mixed. Credit bureaus can make mistakes. One major mistake is combining your credit file with someone else’s file. This often occurs when people have similar names. Generally, mixed files occur with just one credit bureau at a time.

It is critical to understand how the credit bureaus work, whether you’re building credit for the first time, rebuilding damaged credit, or trying to maintain your already good credit rating. The credit bureaus are important but they do not control every aspect of your financial life. 

The credit bureaus don’t assign your credit scores. They don’t approve or deny loan applications. They don’t decide which accounts you will open or how you will manage your credit obligations. Knowing what the three credit bureaus are allowed to do and which behaviors are wrongful can protect you and help you keep your credit intact. 

Only One-Third of Americans Checked Their Credit This Year

CompareCards have conducted a survey for the third year in a row in August 2020 following the massive data breach from Equifax four years ago. Only thirty-three percent of Americans have checked their credit reports in the past year. This is a concern since there have been an increase in credit card fraud attempts during the Covid-19 pandemic. In 2019 39% checked their reports and in 2018, just 37%. It is most crucial to be checking your reports at this time because it has never been easier. For the past four months until April 2021, consumers are able to check their credit reports for free once week, instead of just once a year through AnnualCreditReport.com.

Consumers aged 75 and older are at most risk for credit card fraud and only 20% of this age group has reviewed their credit report in the last year. Cardholders are taking less action to prevent identity theft. Here are some steps to take to prevent identity theft:

• Review online banking and credit cards often

• Check your credit score

• Activate alerts via text, email, etc to inform you when changes are made

• Review your credit report

• Change passwords to your banking and credit card sites

• Change the PIN on your ATM card

From a group of the surveyed consumers, 41% of cardholders were unaware that they had the option to check their credit report for free weekly due to the pandemic. Twenty-eight percent of those surveyed admitted that they did not plan to take advantage of this free allowance. Checking your credit report every week isn’t necessary but checking it once a month will put your mind at ease and keep you up to date and it won’t do any harm. Once you take a look at the reports one or two times, it will give you a good idea of what it looks like and you will have an easier time finding mistakes and errors, if they were to occur. Consumers who don’t have a credit card or a loan are more likely to feel that they do not need to review their reports as often. There is too much fraud out there to not keep tabs on your file. 

Only half of credit or debit cardholders check their credit score each month and a third of those admit that they do not always review their card or bank statements to ensure accuracy. Women are dropping the ball on checking their reports with only 41% doing so monthly as opposed to men at 59%. Breaking down to different generations, Gen Xer’s are best about checking their scores followed by Millenials. 

The fatigue of the pandemic may be distracting from the focus of identity theft. There has been an economic downturn and rampant job loss which is understandable why some consumers may be more focused on other areas of their personal and professional lives than they are of identity theft. More people are at home more often, so instead of binging out on Netflix during downtimes, we could be keeping up to date on identity theft. 

Most people are hesitant about providing their personal information online but nearly 47% of people with a credit or debit card provided their entire social security number in an online form in the past month according to the survey. In 2019 it was 40%. This increase may have occurred due fluctuations in the job market and people applying for unemployment and onboarding at new jobs online. Even providing a partial SSN causes concern. This puts consumers more at risk for identity theft, which makes checking your reports and statements a priority. 

Seventy percent of cardholders have reported using the “sign in with “Facebook” feature to sign up or log in to various websites. While this is a convenience, using your Facebook account to log into other multiply accounts can be problematic. There has been security concerns about Facebook’s ability to protect personal data. The information you are giving has an increased risk of being exposed which is a major target for hackers. Facebook is a signal site that contains information about you that are useful to hackers. Facebook has a past for not keeping data safe so it is important to proceed with caution when you login to other accounts or webpages. 

Nearly half of cardholders (47%) were victims of a data breach within the last year and 14% of them experienced this harm more than once. Consumers may want to take stronger steps to protect their identity such as:

• Freezing your credit- With a credit freeze, or security freeze, you can restrict access to your credit reports and prevent others from opening new credit-related accounts with your information. You will still have access to your credit reports during the freeze and your credit score will not be affected.

• Sign up for alerts - Many companies are on the market to provide services that monitor for identity theft as well as keeping an eye out for Social Security number scanning. 

• Create safer digital habits - You can set calendar reminders to change important passwords often and learn to recognize the signs of phishing emails and other online scams. It is important to remain cautious when providing personal and financial information online and you may even want to invest in security software for electronic devices. 

Most of all it is important to realize that you, as a consumer, have your financial health and security in your own hands. Nobody cares as much about your credit and money as much as you do. It is vital that you protect your personal information and finances because no one else can do it for you. 

Drastically Dropping Credit Score

Many people are are wondering why their credit scores are dropping at a drastic rate. You may be doing things such as paying off auto loans, credit cards, and even making credit card payments well above the minimum due. So, this drop seems really unfair, doesn’t it?

You first want to retrieve your credit reports from the three main bureaus: Equifax, TransUnion, and Experian. You can obtain and download these reports from: AnnualCreditReport.com  These reports are now available weekly, for free until April 2021! Every month millions of data are retrieved by credit bureaus to be posted. The items in your report should be accurate but sometimes errors can be found. You should check for things such as: a misspelled name, a mixed-up account in the lenders’ records, a suffix such as “junior” that should be “senior” and other items that could be a mix up with someone else’s data on your report. By getting all three reports you will be able to see the discrepancies faster.

The bureaus do not have all the same information. They compete for business both into and out of their files. Some lenders may only be reporting to one of the lenders and you may find that you have very different credit scores from each reporting agency. Make sure to dispute anything that you do not recognize as yours, that is more than seven years old, or if something is missing. The best way to dispute is by sending them a letter through certified mail, so that you know an actual person is reading your dispute and you can verify that they received your letter. Since they are in competition with each other, if that data is incorrect, that is not a good competitive business for you. 

High Balances

If you are making the above minimum payment on a number of cards which you are carrying balances, the interest being charged is making your balance go up which is causing you to lose points.  You should be keeping your credit card balances below 30% of your credit limit. If you have multiple cards, don’t focus on just paying off one. The card with a high balance will still effect your credit score regardless if they other(s) are paid off. 

Accounts not appearing on report

Some lenders don’t report to every bureau every month. It costs the lender money to report to the bureaus that you have paid a bill. Auto lenders are quick to repossess a vehicle if you miss a payment but might find little advantage in reporting the paid-off loan instantly. It may take a three-month period for that good news to get published! It’s unfair! 

Closed Credit Card Accounts 

If you have paid off credit cards and then closed the accounts, the utilization points in your score will have gone down because you have lost the available credit from those cards. This is a reason why it is important to not close accounts if you can prevent from doing so. Your credit limits are tied directly to your credit utilization ratio, which counts for 30% of your overall FICO score. You should try to keep credit cards open, whether you are using them or not, unless you are being charged a large fee for their use. One tip I can suggest: If you have two cards from the same bank issuer, you should ask to have the closed account credit limit added to your remaining opening account. This will keep the utilization factor low while saving you an annual fee. 

Your credit history has gotten shorter

If you have recently closed any other accounts, it could have impacted your credit history. Your credit history is how long you have had credit being reported in your name. In credit reporting, the older the better. This makes it more difficult for young people to build up their scores. It is useful to know that some scoring models only count your open accounts in this calculation. 

What affects your credit score?

Here is a brief FICO score primer:

The five basic components in order of importance:

• Payment history (35 percent)

• Credit utilization (30 percent)

• Length of credit history (15 percent)

• Credit mix (10 percent)

• New credit (10 percent)

Credit mix

While the car payments aren’t a factor in utilization, they have a direct impact on the credit mix portion of your score. Lenders like to see that borrowers can handle both revolving credit (credit cards, etc.) and installment debt (car notes, mortgages, etc.) on a monthly basis. Once your car notes were paid off, you lost those points. You still have your good payment history on those notes and that history will stay on your credit reports for 10 years. But credit cards alone will not do much for you in the credit mix department.

New credit

Having hard inquiries over the past couple of years could negatively impact your credit score but only in short term. If you have applied for credit that you did not receive that will hurt you since you would not have the new available credit credit to balance out the impact of that inquiry. It is important to have a fairly good idea that you will be accepted for credit before you apply. 

If you have questions or concerns about your credit report use our online form to contact us. We can answer your questions and see if you might have a case. 

Tips for Boosting your Credit Score before Applying for a New Apartment

When getting a new apartment, you are required to do a lot of paper work. Luckily, most apartment applications occur online, especially since the onset of the coronavirus pandemic. Landlords and property management companies will still ask that you provide personal information so that they can conduct a thorough credit and background check. 

Different states, cities, and apartment complexes will have different requirement, but most rental applications will request similar information for each applicant, so that they can verify your identity and your ability to pay rent. This typically includes information such as: personal contact information, social security number, current and previous addresses, employer information with proof of income, emergency contacts, and vehicle information. 

Even though it is all basic information, rental applications can still be extensive. Once everything checks out - meaning you have a clean criminal record, a good rental history with no evictions, and have proof that you can afford your new place - a new home will await for you on the other side. 

To help you obtain a new home here are a few wats you can manage and maintain your credit score to amaze your potential landlord:

Know what is on your credit report ahead of time

It is reassuring to know what your prospective landlord will be seeing when they run a credit check. Before your apartment hunt visit AnnualCreditReport.com and download your free credit report from each of the three main credit bureaus: Experian, Equifax, and TransUnion. You can download your credit report weekly for free through April 2021. (This is typically annually)

Once you download your reports, it is vital that you review them carefully. If you have student loans, or any other credit balances, it should come as a surprise to find them on your report. You will also be able to see your credit score. 

You want to look out for negative marks that you may not have known about. If you see something that is inaccurate or an error, make sure you dispute the errors right away. It is better to send a letter by certified mail rather than using their system so that you have the comfort of knowing a real person is looking into the issue and you can verify that they received the dispute.

Improve Your Credit Score

The best way to prime your credit score, is to first know how it is calculated. The most popular is the FICO score model that looks at five key factors:

• Payment History (35%): Whether you have paid past credit accounts on time. 

• Amounts Owed (30%): The total amount of credit and loans you are using compared to your total credit limit, aka your utilization rate.

• Length of Credit History (15%): The length of time you have had credit. 

• New Credit (10%): How often you apply for an open new accounts. 

• Credit Mix (10%): The variety of credit products you have, including credit cards, installment loans, finance company accounts, mortgage loans, etc. 

To boost your credit score quicker, pay off as much credit card debt as soon as possible without completely draining your cash reserves. Do this more than 30 days before you apply so that your credit score can refresh. 

Finances

You will be asked to provide proof of income when you apply for your new apartment, which is typically your pay stubs and/or tax returns. In addition you should also be prepared to provide statements for both your checking and savings accounts. It is always good to make sure you have proof that you have savings set aside for your security deposit and incidentals like facility fees, parking fees, and maintenance fees. 

 Be Weary of New Credit Inquires

If you can avoid it, don’t apply for any new credit cars, auto loans, or any other kinds of credit products right before you apply. When a lender performs a credit check, it leads to a “hard inquiry” into your credit history. Hard inquiries appear on your credit reports that are pulled by the lender and may results in a temporary decrease in your credit score. While the decrease is usually insignificant, around five points, it can send red flags to the potential landlord. 

Build Up Your Savings

Before moving into your new place, prepare for your increased cost of living. If you have the ability to live rent-free with a family member, take advantage! Every month, or even better, every week, set aside what money you would be spending on rent. After a few months you will build up a nice emergency fund. 

These are just a few helpful tips to get you ready for your move! If you are denied, check over your report for inaccuracies. If you need help, contact us for a free consultation

Covid and Credit Score

Covid-19 has been such a unprecedented event and there is still a lot of work being done to configure how different situations should be treated and reported. 

The Fair Credit Reporting Act (FCRA) is a law enacted in 1970 that gives consumers certain rights when it comes to their credit reports that include the ability for consumers to dispute credit reporting errors. It also requires that furnishers (those that produce credit reports) are reporting accurate and up-to-date information. 

Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) in March 2020. Part of this act ensures that consumers impacted by Covid-19 are still able to receive loan accommodations without having their credit score impacted. This means that when banks and other lenders provide a loan, payment deferrals, and other forms of relief to consumers due to the pandemic, it should not impact their credit score.

Many Americans have been heavily impacted by Covid-19 and have received these types of relief from banks and lenders. While these should not impact credit scores, there are different credit reporting agencies and different credit scoring models. The current challenge is to make sure that loan payment deferrals are being treated consistently. As a consumer, you have the right to view your credit score. Currently, you are able to obtain a free credit report weekly as opposed to yearly. It is important that you check your credit report and score regularly and to make sure to contact the credit reporting agencies if you notice any inaccuracies in your report, especially now if you have received a loan during the pandemic. 

If you feel that your credit report has inaccuracies contact us to take a look and to see if you have a claim. Consultation is free and you may be entitled to a settlement! 

Credit Report vs. Credit Score

Credit Report Vs. Credit Score

One common misunderstanding is differentiating your credit report and your credit score. Lenders use the numbers from both to determine the likelihood that you will make payments as agreed in your contract. Lenders that use your credit report and your credit score include credit card companies, apartments, car loans, and mortgage. Your credit report holds information on all your past credit history. The data that gets collected is used to determine your credit score.

Your credit score is a three-digit number that lenders, such as those mentioned above, use to determine how safe or how much of a risk you may be as a customer. The range is typically between 300 and 850. Credit scores are determined based on how much debt you owe, history of repayment, if you have any marks for being late, and how long you have had your credit accounts. It is common for your scores to fluctuate based on your account activity.  There are different scoring models used to determine your score. Some even use your income to calculate your credit score.

Here is a general look at credit score ranges:

• 300-579: Poor

• 580-669: Fair

• 670-739: Good

• 740-799: Very good

• 800-850: Excellent

It is important to strive for a higher score because you will receive more favorable credit terms such as lower interest and lower payments. Credit scores will vary depending on what model was used. Not all creditors report to all three bureaus (Experian, TransUnion, and Equifax). Some creditors may only report to two or none at all. They may also calculate your medium score from all three major credit bureaus.

  Your credit report is a statement that provides information about your lines of credit and your payment history but does not contain your credit score. Your credit report is compiled by the three major credit reporting companies (Experian, TransUnion, and Equifax). These are also known as bureaus or consumer reporting agencies. Lenders will use these reports to determine if they want to loan you money and it helps them determine the interest rate you will receive. Other businesses that use credit reports are renters, insurance agencies, and utility services. Your employer may also run a credit report to make employment decisions about you.

Credit reports will contain:

 Personal Information:

• ·         Name

• ·         Address

• ·         Social Security Number

• ·         Date of Birth

• ·         Phone Numbers.

Credit Accounts:

• Current Accounts and Accounts History

• Credit Limit/ Amount

•  Account Balance

Collections

Public Records

•    Foreclosure

•   Civil Suits

• ·Bankruptcies

Reports can sometimes have errors. It is important to check your credit report. If you find any mistakes, it is imperative that you report these errors right away. Everyone is entitled to a free credit report once a year. Find your free credit report at

https://www.nerdwallet.com/blog/finance/credit-score-vs-credit-report-whats-difference/

Credit Lock vs. Credit Freeze

Credit Lock vs. Credit Freeze

A credit freeze and credit lock are often confused as being the same thing. Both can block creditors and others from accessing your credit file and opening an account in your name. Both a freeze and a lock can help protect you from identity theft. Typically, freezing your account is free but locks come with a fee.

A credit freeze lets you restrict access to your credit file. This makes it harder for someone trying to steal your identity to open a new account in your name. A lender needs your credit report to determine if you are qualified to receive a new line of credit. When you have a credit freeze in place, your credit report cannot be pulled up and the lender is unable to approve a loan or credit card.

Freezes are free and a bit harder to undo. Freezes are required by law to be free. A credit freeze cannot affect your credit score, prevent you from: opening a new account, obtaining your free credit report, or from theft. If you want to lift a freeze, then you required to have a PIN to unlock it online or you may have to request the PIN in writing.

 Locks aren’t always free and can be easier to open and reapply. It is likely to come with a monthly fee. It will block access to your credit file, like a freeze, so that a new account cannot be opened in your name. To place a lock or a freeze on your credit file, you must first contact the three credit bureaus. A credit lock has no legal protection in place, so credit bureaus are not responsible if a new account has been opened in your name. When you want to lift your lock, you are able to do so instantly online.

 When should you use a lock or freeze? If your credit report and/or other personal information has been wrongly used or exposed, you should use a credit freeze. A credit lock is used more as preventative measures, before anything was to happen. To freeze or lock your credit file, you will first need to contact all three credit bureaus. The first step in knowing if you need to lock or freeze your credit file is to check and monitor your credit score. A jump in your score could be fraud. Check out freecreditreport.com

Problems persist with Credit Bureaus

Problems persist with Credit Bureaus

Have you experienced issues with credit bureau’s? It seems to be a running theme. The three major credit-reporting bureau’s – Equifax, Experian, and TransUnion, have had the most complaints for four consecutive years. These complaints involve inaccurate information on credit reports. Fighting with these bureaus can be a hassle because the bureaus have more power than the consumer.

            Lawmakers have only begun to pay attention since the enormous data breach from Equifax just two years ago. This led to being able to freeze your reports for no fee but didn’t provide any new ways to protect the consumer. There have been a few reforms in the past few years, such as bureaus being required to inform the other bureaus when a credit file is found to be mixed with another person and that a report can no longer include debts outside of an agreement or contract. For example, The reports are not allowed to include medical records that are 180 days old or less or medical debts that have been paid by an insurer.

            Problems have been persistent, and it seems that reform is not happening fast enough. The disputes are converted into codes that summarize the complaints for the data furnishers, which can be thought of as computers talking to computers. This can be frustrating when you have a dispute that is more complex and you need to talk to a real person.

            During the data breach of 2017, Equifax had a settlement of $700 million, which is comparable to a parking ticket in their eyes. It is just the cost of doing business and easier than changing their business practices to be fair and partial to consumers. It is imperative as a consumer to check your credit report regularly, or you may find yourself unexpectedly rejected for credit when it is most crucial. annualcreditreport.com is a site where you can check your credit report for free annually. As a consumer, it is your job to identify that your accounts are in good standing and have all the correct information. If your personal information is wrong, it could potentially be a mixed file or identity theft. It isn’t uncommon for a credit file to be mixed with someone who has similarities to your identifying information. It is most likely to happen if you have a common first and last name or if you have a family member with a similar or the same name. Credit bureaus may even consider only 7 of the 9 digits of your social security number when matching your information. You have the right to dispute these errors and have them corrected and/or deleted. An error in your file could prevent you from getting credit, renting a home, or getting a job.

            If you come across an error, you should take action from both sides. You should contact the furnisher that provided data to the bureaus and to contact the bureau(s) reporting the error. It may even be best to write a formal letter by mail so that a person and not a computer will receive the information. It also provides you with a paper trail if you were to make a claim.  Being persistent is key, it is not easy to get a furnisher to immediately admit their wrongs. Filing a dispute with the credit bureaus as you communicate with the furnisher will help preserve your right to make a legal claim if the error fails to be corrected. You can find dispute information and mailing addresses through these links: equifax.com/disputes, experian.com/disputes and transunion.com/disputes Contact us today with any questions you may have regarding your credit report.

What to Know About FCRA Compliance

What to Know About FCRA Compliance

The Fair Credit Reporting Act, or the FCRA, is a federal law that was enacted in 1971. It was originally designed for consumers to receive help resolving inaccuracies in their credit reports.

        The range of the FCRA was expanded in 1996 to include: background checks for employment screening. It is mandatory for an employer using a third party to conduct background checks under the FCRA compliance.

        The FCRA compliance was made to protect the consumer. Employers that use background reports and Consumer Reporting Agencies, also known as background screening companies are regulated by the FCRA. The FCRA is relevant when an employer obtains a background check for employment from a third party. Background checks include things such as: criminal history, employment verification, education verification, reports on motor vehicles, health care sanctions and professional licenses. The employer and background screening company must have compliance with the FCRA.

        It is highly important that an employer must disclose that they will be doing a background check and they must have written authorization. There are strict adverse action procedures that they must follow if they make an employment decision based on negative information in the report. According to the Consumer Reporting Agency, they must have compliance in procedures that make sure reports are as accurate as possible, while following all state and federal reporting guidelines.

     Here are terms to know to understand more about the FCRA:

The Consumer Report. This is a background report aka a background check that contains factual information of dates of employment, criminal records, and driving history.

The Investigative Consumer Report. This is a background report that includes information obtained through personal interviews that discuss employment performance such as a  personal and/or professional reference check.

The Consumer Reporting Agency, (CRA),  which is where the background screening company prepares the background report.

The Consumer – Which is the person who is the subject of the report.

The User – The person who is requesting and using the background report.

Disclosure – The document used to inform the consumer that they may be subject to a background report.

Authorization – The document signed by the consumer in which they authorize preparation of the background report.

Adverse Action – The process followed by an employer when considering a negative employment decision based on the background report.