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Fair-Credit-Reporting-Act

Who Is Allowed to Check Your Credit Reports?

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Who Is Allowed to Check Your Credit Reports?

Accessing your credit information is easier now than it has been at any other point in history. Thanks to the Fair and Accurate Credit Transactions Act, an amendment to the Fair Credit Reporting Act (FCRA), you even have the right to view a free copy of all 3 of your credit reports every 12 months. To claim your free reports from Equifax, TransUnion, and Experian simply visit AnnualCreditReport.com. Depending upon your state of residence you may have access to additional free copies of your 3 credit reports each year as well.

Even after you have exhausted your free annual credit reports, there is no shortage of websites online which will grant you access to your credit reports and possibly your scores either for free or for a fee. This easy access to your credit information is certainly a good thing for consumers. However, the ease of access might also have you concerned about who else can put their hands on a copy of your credit reports.

The good news is that the credit reporting agencies (CRAs) are not simply allowed to release your credit information to anyone who asks for it. Instead, the FCRA lays out some very specific rules regarding to whom the CRAs may disclose your credit information. In order to access your credit report a company must have what is legally referred to as Permissible Purpose. Read below for a list of some of the most common reasons your credit reports may legally be accessed.

Court Order

Per the FCRA if a judge orders the CRAs to disclose your credit reports, legally they are bound to hand them over.  

Request from You, the Consumer

You also have the right to access you own credit reports as often as you like. As already mentioned, you even have the right to a free copy of your 3 reports annually. Beyond that you can still request unlimited additional copies of your credit reports, though you might be charged for the privilege of doing so.

Credit Transactions

You probably already know that when you apply for a loan or credit card the bank or card issuer is going to check your credit as part of the application process. In general this is 100% legal under the FCRA.

Employment Screening

Current and prospective employers also have permissible purpose to pull your credit reports. However, your written permission is required first. There is also a common myth that employers may access your credit scores as well, but the truth is that employers may have access to your credit reports only.

Insurance Underwriting

Insurance companies often rely upon your credit information in order to determine the risk of doing business with you and, if they choose to take you on as a customer, how much to charge. According to the FCRA this is typically permitted.

Account Review

Under the FCRA your existing creditors are permitted to obtain your credit reports as well. Current creditors may pull your reports and scores to determine whether your risk level has changed and if they wish to continue doing business with you.

Child Support

Per the FCRA your credit reports can legally be used to determine how much you can afford to pay in child support.

Collection Purposes

Like it or not, collection agencies are often able to pull your credit reports according to the FCRA and, unfortunately for the consumer, they do not need your permission to do so. As long as the collection agency follows the rules, these reports may be used for skip tracing purposes (aka finding you) and for determining your capacity to pay your debts.

Prescreened Credit Card Offers

Have you ever received a "preapproved" offer in the mail? If so, the CRAs likely sold your information as part of a large mailing list to a credit card issuer. Your full credit report was not given to the card issuer, but due to a specific set of search criteria the card issuer probably has a very good idea of the information contained in your report. Although you did not specifically authorize the access or even apply for a loan, this disclosure of your credit information is still allowed under the FCRA. If you want to stop the CRAs from selling your credit information for prospecting purposes then you will have to visit OptOutPrescreen.com to officially make the request.

Unauthorized Credit Report Access

You should already be keeping an eye on your credit reports often to make sure that the information contained there remains accurate. However, you may not have realized that you should be keeping an eye on your credit report inquiries (records which pertain to when your reports were accessed) as well.

Many credit report inquiries (aka pulls) have the potential to lower your credit scores. Plus, if you discover unauthorized or suspicious inquiries it could even be a sign of identity theft. The FCRA gives you the right to dispute any such inquiries - either on your own or with the help of a reputable credit repair professional.

CLICK HERE or call 704-499-9696 to schedule a no-obligation credit analysis with a HOPE4USA credit expert today. 

 

credit-expert-michelle-black

Michelle Black is an author and leading credit expert with a decade and a half of experience, a recognized credit expert on talk shows and podcasts nationwide, and a regularly featured speaker at seminars across the country. She is an expert on improving credit scores, budgeting, and identity theft. You can connect with Michelle on the HOPE4USA Facebook page by clicking here.

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My Debt Has Been “Charged Off.” What Now?

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My Debt Has Been “Charged Off.” What Now?

“Michelle, last year I lost my job and was unable to keep up with my credit card payments. The credit card accounts have been closed and the accounts are being reported as “charge offs” on my credit reports. I don’t know why, but the accounts are still showing outstanding balances. Since the accounts have been charged off that means that I don’t owe the debt anymore and the balances should be zero, right? What gives?!”

A somewhat common misconception which consumers may have is the idea that if a bill is charged-off then the debt is no longer owed. Unfortunately for the consumer, that is a myth. A charge off does not equal forgiveness of a debt.  Charge off is simply a classification or a category that creditors give to debt which they will be writing off as a loss for tax purposes. When a charge off notation appears on a credit report, it does not mean that the consumer no longer owes the balance. The balance may still be very much owed to the creditor or collection agency.

When a debt is charged off by the original creditor (typically once the account has become around 6 months past due), it is often sold or turned over to a collection agency. If you can afford to pay the debt before it is reported to the credit reporting agencies, you should do so. You can save yourself a big headache in the future by paying the account now.

It is also important to be aware of your rights concerning charged off debt. Take a look at the list below to protect yourself from “credit bullies” who are employing abusive or illegal collection tactics.

Know Your Rights

1. FDCPA (Fair Debt Collection Practices Act) -

Collection agencies are not allowed to harass you. They cannot call you excessively, threaten you, or call you at all hours of the night. Collection agencies cannot call your friends and family members in an attempt to embarrass you. There are a lot of other protections afforded to you under the FDCPA. If you have been called or harassed by a collection agency, it might even be in your best interest to speak with an attorney who specializes in FDCPA cases. In fact, feel free to contact us if you would like a referral to a reputable attorney in your area. If you have been harassed then there is a chance your attorney will even represent you on contingency with no upfront funds coming out of your pocket for attorney fees.

2. FCRA (Fair Credit Reporting Act) –

A. Re-aging is illegal.
Derogatory accounts are allowed to remain on your credit reports for 7 years from the date of default (when the original account became 6 months past due). If a collection agency changes the date of default on the original debt in an attempt to manipulate the date when an item is purged from your credit reports, that is known as re-aging and it’s illegal.

B. You have the right to dispute inaccurate, questionable, unverifiable, and outdated accounts.
If you believe that a collection account on your credit reports has been re-aged, you have the right to dispute the account with the credit reporting agencies. You can file disputes on your own, or with the help of a professional like HOPE4USA. You also have the right to dispute any accounts which you believe to be inaccurate or unverifiable. 

The best thing that you can do for your credit scores is, of course, to keep all of your payments on time. However, anyone using a little common sense can realize that most people never set out not to pay their bills. It’s not like consumers with credit problems just wake up one morning and say, “I think I’ll stop paying my bills today.” No, most people who get into credit and financial trouble do so due to unfortunate circumstances like job loss, illness, family emergencies, etc. Bad credit happens to good people every single day.

If you have made credit management mistakes in the past, there is good news. Bad credit does not have to last forever. CLICK HERE to download our free HOPE4USA Credit Report Toolkit for some expert advice on how to get started on your road to recovery today!

michelle-black-credit-expert

Michelle Black is an author and leading credit expert with over a decade and a half of experience, a recognized credit expert on talk shows and podcasts nationwide, and a regularly featured speaker at seminars across the country. She is an expert on improving credit scores, budgeting, and identity theft. You can connect with Michelle on the HOPE4USA Facebook page by clicking here.

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Huge Changes Coming to a Credit Bureau Near You

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Huge Changes Coming to a Credit Bureau Near You

Consumers can expect to see major changes in the way that the credit reporting agencies - Equifax, TransUnion, and Experian - handle much of the information on their credit reports and the consumer dispute process in the coming months and years. In fact these changes, brought about as part of a settlement agreement released on March 9, 2015, are so sweeping that they have the potential to lead to higher credit scores for millions of US consumers.  

The settlement came about after New York State Attorney General Eric Schneiderman and his office began investigating the practices of the 3 credit reporting agencies in 2012. While the neither Equifax, TransUnion, nor Experian were actually found to have violated any laws, the 3 credit reporting giants have agreed to a settlement which will implement a very significant overhaul affecting many different credit reporting and consumer dispute policies.

Additionally, the changes will not merely apply to residents of the state of New York but rather will be implemented for consumers nationwide. Without question the settlement marks the most significant change in credit reporting since the Fair and Accurate Credit Transactions Act (FACTA) amendment to the Fair Credit Reporting Act (FCRA) in 2003.  In fact, credit reporting changes of the magnitude included in the settlement agreement generally only come about when mandated by federal law.

The lengthy settlement agreement (a whopping 41 pages long of not-so-light reading) details a massive amount of information regarding the credit reporting practices changes to come. Here are some of the most important highlights.

Time Frame

·        The changes detailed in the agreement will not take place overnight; however, they will be implemented nationwide over the next 6 to 39 months (3.25 years).

Medical Collections

·        According to the agreement unpaid medical collections will not be permitted to be added to a consumer's credit reports for a period of 180 days (approximately 6 months). The change is designed to prevent consumers from having unnecessary derogatory collection accounts added to their credit reports in cases where a medical insurance company is simply dragging its feet to pay a bill - a common occurrence.

·        When a medical collection is paid by an insurance company it must be removed from a consumer's credit reports immediately, regardless of how long it has been there. Previously paid medical collections were permitted to remain on a consumer's credit reports, leading to credit score damage, for 7 years from the date of default on the original account.

More Free Credit Reports for Consumers with Disputes

·        Each credit bureau has also agreed to provide an additional free credit report to consumers who file a dispute using an AnnualCreditReport.com credit report. Previously, as part of 2003's FACTA, consumers were only entitled to only one from credit report every 12 months via the same website.

Changes to the Dispute Process

·        Perhaps the biggest changes to come about as a result of the settlement are among those involved with the consumer dispute process.

¨      Refusing to Process Disputes - The credit bureaus are no longer permitted to refuse to accept a dispute due to the fact that a consumer has not receive a credit report recently nor for the failure of a consumer to include a credit report identification number with his/her dispute.

¨      Deceased Indicator Changes - When a credit bureau receives a dispute from a consumer than an account on his/her credit report is inaccurately reporting that the consumer is deceased (and the credit bureau's investigation has in fact revealed that the consumer's dispute has merit) the credit bureau must share the information regarding the incorrect "deceased indicator" with the other 2 credit bureaus so that they may remove the indicator as well. (These inaccurate deceased indicators often show up on a consumer's credit reports when they hold a joint account with someone who has passed away.)

¨      Review of Supporting Dispute Documentation Submitted by Consumers - Previously if a consumer filed a dispute with documented proof of a credit reporting inaccuracy the credit bureau would still rely upon the data furnisher (i.e. creditor or collection agency) to review the dispute and determine whether to verify or delete the account. Under the new agreement when a consumer includes documentation to support a dispute and the data furnisher verifies the account as accurate anyway the credit bureau will be required to assign an agent to perform its own investigation, independent of the data furnisher. If the credit bureau agent determines that the consumer's dispute is indeed valid then the agent will have the authority to modify or delete the disputed account.

¨      Escalated Dispute Handling - The credit bureaus will be required to process disputes occurring as a result of fraud, identity theft, and mixed credit files (where the files of 2 consumers are merged into 1) in an escalated manner. Escalated disputes will be handled by specialized groups with experience in these complex dispute situations. 

michelle-lambright-black-credit-expert

Michelle Black is leading credit expert with over 13 years of experience, the credit blogger at HOPE4USA.com, a recognized credit expert on talk shows and podcasts nationwide, and  a regularly featured speaker. She is an expert on credit reporting and scoring, budgeting, and identity theft.

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Dawn of the Debt.....the Zombie Debt!

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Dawn of the Debt.....the Zombie Debt!

 In most cases, debt does not live forever. That is wonderful news for anyone who has made overwhelming financial management mistakes in the past. There are laws which govern how long a lender has the right to sue you when you default on an account. The length of time will vary depending upon the state in which you lived when the debt was initially established. The Fair Credit Reporting Act (FCRA) also governs how long a delinquent account is legally allowed to remain on your credit reports. The 2 statute of limitations (SOL) “clocks” are different, so let’s take a look at each.

Time Barred Debt Clock

The term “time barred debt” signifies that a creditor can no longer sue you for in an attempt to collect on an unpaid financial obligation. The statute of limitations clock which governs when a debt will become time barred varies per state. Here is a chart to help you out.

How Many Years a Collector Has to Sue: State Where You Lived When Debt Was Established:

  • 15 Years: KY and OH
  • 10 Years: IL, IN, IA, LA, MO, WV, WY
  • 8 Years: MT
  • 6 Years: AL, AK, AZ, AR, CO, CT, GA, HI, KS, ME, MA, MI, MN, NV, NJ, NM, NY, ND, OR, SD, TN, UT, VT, WA, WI
  • 5 Years: FL, ID, NE, OK, RI, VA
  • 4 Years: CA, PA, TX
  • 3 Years: DE, MD, MS, NC, NH, SC, Washington D.C

Credit Reporting Clock

The credit reporting SOL clock is much easier to understand since it is the same for all 50 states. The FCRA states that a defaulted debt can remain on your credit reports for 7 years from the date of default. Period. If an account is sold to a collection agency, the SOL clock for credit reporting cannot legally be restarted. 

Resurrecting “Dead” Debt

If you have defaulted on past debt which you could not afford to pay then it is important to beware of “zombie debt” coming back to bite you. Collection agencies have been known to try a variety of tactics to resurrect old debts which should be dead and gone due to the fact that the debt was part of a discharged bankruptcy, the debt is the result of identity theft, or the SOL clock has expired and the debt has become time barred. Here are 2 of the tactics often used by zombie debt buyers of which you should beware:

1. Default Judgments

Even if a debt has become time barred in your state, a creditor may still attempt to sue you for the debt. If you fail to show up in court and defend yourself then you will automatically lose and the creditor will be awarded a default judgment. The moral of this story is that, if a creditor is suing you for a old debt and you believe that the debt should be time barred, show up to court. Better yet, show up with an attorney.

2. Tricking Consumers into Resetting the Clock

It is surprisingly easy for consumers to accidentally restart the statute of limitations so that a creditor can regain the right to sue you and attempt to force collection. (Note: nothing can legally restart the SOL clock for credit reporting. If you have heard otherwise, you have heard a myth. Of course, you should always keep an eye on your credit reports for mistakes since some collection agencies are known break the law quite often, but that is a story for another article.) Collection agencies trick many consumers into acknowledging that a debt belongs to them and, once the debt has been acknowledged verbally or in writing, that acknowledgement may be enough to remove the debt from a time barred status, depending upon your state. 

A second way that consumers get into trouble with zombie debt is by making a small payment on an old, time barred account. For example, a debt collector might contact you regarding an old account and ask you to make a small payment in good faith. Unbeknownst to the consumer, once any payment has been made on the account then the clock has been reset and the creditor once again has the right to sue. 

Please do not misinterpret the previous paragraph as advising you not to pay a legitimate, albeit old debt. If you find yourself in a better financial situation where you can now afford to settle past mistakes then, by all means, go for it. However, you should be sure to settle any time barred debts in full rather than scheduling small, monthly payments. If you settle or pay the account in full then there will be no deficiency balance left for a creditor to come after and you can protect yourself from a potential lawsuit. Paying off your debts is admirable, and may be the right thing to do even if the debt has become time barred. 

credit-repair-north-carolina

About the Author:  Michelle Black is an 11+ year HOPE Credit Expert, the credit blogger at www.HOPE4USA.com, a recognized credit expert on talk shows and podcasts nationwide, a contributor to the Wealth Section of Fort Mill Magazine, and  a regularly featured speaker at seminars up and down the East Coast. She is an expert on improving credit scores, budgeting, and recovering from identity theft. You can connect with Michelle on the HOPE Facebook page by clicking here.

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