The Credit Report
A credit report gives a summary of an individual’s credit history, including debt and open credit lines. The report is provided by one or more consumer reporting agencies (CRAs) to potential lenders giving them information to help make decisions on an individual’s financial requests, from car loans to starting a business.
Why Credit Reports Are So Important
Having a good credit report allows an individual greater financial opportunities. A good report can earn an individual the ability to purchase a new car or get a preferred apartment. A bad credit report can limit that access.
However, individuals with bad credit should remember the report can go up as well as down. It helps to think of a credit report like a school report card; a bad grade for one semester can be an incentive to earn a better grade in the new semester. An individual’s financial standing can always change.
While an individual must largely accept responsibility for their own credit history, some basic protections do exist. The Fair Credit Reporting Act (FCRA), created in 1970, helps to prevent consumers from being unjustly damaged because of inaccurate or arbitrary information.
Some examples include:
-When information from one consumer’s file merges with another consumer’s file and causes damage based on the information contained in both reports. While seemingly only a problem with frequently used names (John Smith, Jennifer Johnson, etc.), merged files occur most frequently with individuals sharing the same name, such as family members
One real world example is a friend of mine had a Chapter 7 Bankruptcy show up on his Equifax report, causing him to be turned down for a loan. The case number on the Bankruptcy actually correlated back to a Chapter 7 that had been filed by his father, that my friend was in no way a party to. They did however, have the same first and last name and lived at the same address.
When one individual willfully steals the identity of another individual to gain access to financial records, open new lines of credit, and commit fraud in the name of financial gain.
A common problem in the 21st century, victims of identity theft should contact the police and fill out an identity theft affidavit from the Federal Trade Commission.
When a business or individual accesses a person’s credit history without consent, resulting in damage to the person’s credit rating.
INACCURATE PUBLIC RECORDS
-When a credit report contains outdated or incorrect credit information, such as an ongoing lawsuit that you were in fact victorious on, or a judgment that has since been paid.
STALE OR RE-AGED DEBT
-When creditors alter the date of a person’s last payment on a debt to keep the item on a credit report. The Federal law regulating credit reports recognizes a seven and one half year limitation period, from date of first delinquency. This should not be confused with the four-year statute of limitations for bringing a suit on most debts in Texas State Courts. Also, please be advised that once a lawsuit goes to judgment all bets are off. The FRCA also provides methods for victims of re-aged debt to seek justic
The Dispute Process
Disputing an item on a credit report starts when the aggrieved individual sends a dispute letter to the CRA. Once a dispute gets submitted, the CRAs are required to reinvestigate the issue, which will generally involve communication with the furnisher of that information and require the CRAs to provide the correct information. Should the CRAs fail to investigate the debt, the individual can then pursue a cause of action against the CRAs under the FCRA.
Once a dispute gets submitted, both the CRAs and the furnishers are required to reinvestigate the issue. The furnisher is the creditor or other such provider of the original information. This process which will generally involve communication with the furnisher of that information and require the CRAs to provide the correct or delete the information.
Free Consultation Available
Individuals seeking to learn more about their credit history can apply for a free copy of their credit report once a year from each of the three main CRAs at www.annualcreditreport.com. For a free consultation, including a complimentary credit report review, individuals can contact Foley Law at any time. If eligible, our company may be able to help dispute the inaccuracies and, if necessary, discuss the possibility of bringing suit against the CRAs and/or furnishers.