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credit-reporting

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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The Top 5 Things You Need to Know about the Credit Reporting Agencies' New Settlement Agreement

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The Top 5 Things You Need to Know about the Credit Reporting Agencies' New Settlement Agreement

Media outlets were set into a frenzy last month when the New York Attorney General's office announced a landmark settlement agreement which had been reached with the 3 major credit reporting agencies - Equifax, TransUnion, and Experian. The agreement will completely overhaul many of the practices and policies previously held by the credit reporting agencies (CRAs) and has the very real potential to bring about credit score increases for millions of American consumers.

The 41 page long agreement will introduce a large number of credit reporting and dispute resolution changes, some of which are not all that exciting for consumers and several others which are extremely so. If you are interested in reading the agreement in its entirety it can be found here. However, for those of you who would simply prefer the highlights you can read below for the top 5 things which you need to know about the new settlement agreement and the ways it may or may not impact you directly.

1. Changes will be implemented for consumers nationwide.

Although spearheaded by the New York Attorney General, Eric Schneiderman, and the despite the fact that the settlement was actually made solely with the state of New York, all of the changes detailed in the settlement will be implemented for all US consumers across the country. One of the primary reasons why the new policies and procedures will be rolled out for all consumers instead of only those consumers located in New York state is due to the fact that it does not make sense, logistically speaking, for the CRAs to have separate policies and procedures in place for an individual state.  

2. Changes will still take time.

The CRAs are going to have to complete tremendous amount of programming work in order to implement the changes detailed in the settlement and, as a result, the changes are not expected to happen overnight. Instead the CRAs have been given a total of 3 years and 3 months, broken down into 3 phases, to complete all of the steps which will be required in order to comply with the settlement. Here is a quick overview of the 3 phases.

·        Phase 1 (September 8, 2015)

The easiest changes in the settlement must be implemented by this date. These primarily include changes which will not require an extensive amount of programming and/or training.

·        Phase 2 (September 8, 2016)

The changes which must be implemented by the Phase 2 deadline are those which are more (but not most) time consuming from a logistical standpoint. Phase 2 initiatives will involve the development of many new internal policies in addition to new polices for credit reporting between the CRAs and their customers (aka data furnishers).

·        Phase 3 (June 8, 2018)

The "Completion Date" detailed in the settlement is the deadline for implementing all remaining changes in the settlement. Changes included in the Phase 3 rollout are the most time consuming in nature from a programming and training standpoint.

3. Medical Collections

Among the most exciting new policy modifications in the settlement include those which are related to the handling of medical collection accounts. Once implemented there will be 2 major changes in medical collection reporting procedures.

a.      Delayed Reporting - Medical collection accounts will not be permitted to appear on a credit report until the account is at least 6 months past the date when the account initially went delinquent. This change is required to be implemented by Phase 3 (June 8, 2018). Preventing the early reporting of medical collections will allow consumers more time to ensure that medical bills are paid by insurance without the fear of their credit reports and scores being damaged due to slow insurance claim review processes.

b.      Accounts Paid by Insurance - By the Phase 2 deadline (September 8, 2016) the CRAs will be required to remove or suppress from credit reports any medical collections which are paid or are being paid by a consumer's medical insurance provider. The removal/suppression will be retroactive and will apply to medical collection accounts which were paid by insurance in the past but are still currently remaining on any consumer's credit report. What makes this change especially exciting is the fact that the removal of a collection account from a consumer's credit reports, depending upon the situation, could potentially have an extremely positive impact upon that consumer's credit scores especially if it were the only negative account present.

4. More Dispute Resolution Influence from the Credit Reporting Agencies

One of the more anticipated changes by consumers which will be implemented in Phase 1 (September 8, 2015) has to do with the way which the CRAs handle certain disputes. In the past when a consumer disputed an account with the CRAs and included supporting documentation (i.e. proof that an account was paid off) the CRAs would still fully rely upon the data furnisher to either modify, delete, or verify the account.

Once the new policy is implemented, should a consumer submit disputes to the CRAs with supporting documentation AND the account is still verified as accurate then the CRAs themselves will also be required to assign agents to review the supporting documentation in order to determine if a deletion or change is warranted. If a change is deemed to be warranted then the CRAs will actually modify or delete the inaccurate account themselves. Should everything work as planned then it should result in a much easier process for consumers to see errors corrected on their credit reports (provided they have proof of the error).

5. More Free Access to Credit Reports

Since the FACTA amendment to the Fair Credit Reporting Act was passed in 2003 consumers have had the right to claim a free credit report from each of the 3 CRAs annually via the website AnnualCreditReport.com. In addition to this free report some consumers will also be entitled to a 2nd free annual credit report from the same website as part of the new settlement. The additional free report, which must be made available by the Phase 2 deadline (September 8, 2016), can be claimed by any consumer who meets the following criteria: (a.) the consumer already pulled an initial report from AnnualCreditReport.com in the past 12 months and (b.) the consumer initiated a dispute after doing so.

As previously mentioned, the full settlement agreement spans a total of 41 pages. There are certainly many other changes which will be brought about as a result of the new settlement in addition to those listed above. If you are interested in learning more about the coming changes feel free to check out the following article: Huge Changes Coming to a Credit Bureau Near You. 

michelle-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, 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 identity theft. You can connect with Michelle on the HOPE Facebook page by clicking here. 

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Why Doing "Nothing" Can Do So Much Harm to Your Credit

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Why Doing "Nothing" Can Do So Much Harm to Your Credit

Ignorance is bliss...or so the saying goes. However, when it comes to your credit reports and scores being ignorant can be a truly horrible strategy which can have some seriously negative consequences as well. People generally ignore their credit for one of two reasons. First, many consumers with good credit assume that everything on their credit reports is fine and do not even bother to check their reports until their next loan application. The second most common reason why consumers ignore their credit is due to the fact that it is so bad that they feel overwhelmed and powerless to change their credit situation. Regardless of the reason, ignoring your credit is a really bad idea.

Why Consumers with Good Credit Need Still Need to Pay Attention

If you always pay your bills on time and maintain very low or even $0 balances on your credit cards then odds are high that your credit scores are probably in pretty good shape. The truth is that you have the right to expect your credit reports to contain accurate information. However, the reality of how the credit scoring system works is that mistakes on credit reports happen. In fact the Federal Trade Commission released a study in 2013 which proposes that there were around 40 million mistakes on the credit reports of US consumers. Although the Fair Credit Reporting Act does give you the right to expect accurate credit reports, errors still occur every single day. What you may not realize is that the responsibility to make sure you credit reports remain error free lands squarely on your own 2 shoulders.

Credit reporting errors can range from insignificant with little to no credit score impact to all the way on the opposite side of the spectrum where the wrong credit reporting error can wreak utter havoc upon your credit scores. Thankfully, there are several options which make it extremely easy for you to keep a close eye on your credit reports in order to ensure that they remain accurate.

Option 1: In 2003, thanks to the FACTA amendment to the Fair Credit Reporting Act, consumers were given the right to access all three of their credit reports completely free of charge once every 12 months. To access these free credit reports you simply need to visit AnnualCreditReport.com. (Not-so-fun-fact: an average of only 4% of these available free reports are actually claimed by consumers annually.)

Option 2: If you are wise enough to understand the importance of keeping a close eye on your credit reports then you will also realize that checking your credit reports once a year is not going to be often enough. The good news is that there are many free options available to access and review your credit reports throughout the year - though this option can be a bit time consuming due to the fact that truly free reports can generally only be accessed one credit bureau at a time.

Option 3: Finally, there are also several affordable fee based credit monitoring services which will allow you to check an monitor all 3 of your credit reports and scores simultaneously and easily.

Why Consumers with Bad Credit Still Need to Pay Attention

There is no question that credit problems can feel overwhelming and insurmountable. When faced with credit problems the desire to stick your head in the sand and ignore them can be very tempting. Unfortunately, ignoring credit problems does not make them go away but only keeps you stuck in the same bad situation for longer than necessary.

Whether you choose to work on resolving credit issues yourself or to seek professional assistance with your credit problems you should make the decision to do something. No matter how bad your credit reports are currently - even if you are one day out of a freshly discharged bankruptcy - there are always steps which you can take to begin moving your credit back in the right direction.

CLICK HERE to schedule a no-obligation credit analysis with a HOPE4USA credit expert to learn how to improve your credit reports and what HOPE4USA can do to help.

CLICK HERE to download our free credit repair toolkit - no strings attached. 

ron-lambright-credit-expert

About the author: Ron Lambright has been a credit expert for over 14 years and is the Executive Director of HOPE4USA - a company he helped to found after struggling to overcome personal credit issues on his own twice before. He is a regular guest on radio talk shows and is featured weekly as the premier credit expert at training seminars in the Charlotte, NC region and up and down the East Coast.  Ron is an expert on teaching consumers how to achieve  "loan ready" credit reports, improving credit scores, and an expert in the fields of business financing and business credit as well. You can connect with Ron on 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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