Our Attorneys Answer Your Questions About the Fair Credit Reporting Act
Below are some initial questions many clients have when they first contact The Consumer Law Group, P.C.. The questions below can address many initial concerns you may have. If you don't find the answers here, you may contact us for answers to more complex questions or questions specific to your case.
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How long will it take to improve my credit score?
If you have ever tried to get a loan, you know how important your credit score is. That mysterious, magical number can either guarantee you a loan with a low interest rate or guarantee that you will be denied outright. Most of us are somewhere in between, facing higher interest rates and insurance premiums because of a not-so-stellar credit score. It’s not always easy to raise that score, but with a plan and patience, you can gradually bring the number up to a more desirable range.
Know What Factors Affect Your Score
The first thing to understand is what has contributed to your current credit score. Credit reporting agencies use a variety of factors to calculate your credit score. The following poor financial habits will negatively affect your credit score:
Frequently paying bills late
Owing debt equal to or close to your credit limits
Having a short credit history
Applying for too many credit cards
Having too many of the same kinds of credit accounts (e.g. installment loans or credit cards)
If these traits describe you, your first goal should be to change as many of them as possible. This will not be easy for many people.
Improving Your Credit Score
Even when you have made the commitment to change your bad habits and improve your credit score, it will take some time. If you have declared bankruptcy, you will have to wait 7-10 years for that to be removed from your credit report. However, after about 2 years from discharge, your score will begin to improve if no further negative entries are added. If you have not declared bankruptcy, the process should be much faster. For some people, it can be as little as 30-90 days, but it depends on your history and debt load. The Federal Reserve recommends taking the following steps immediately to improve your credit score over time:
Get copies of your credit reports and make sure they are accurate.
Pay all your bills on time.
Learn the legal steps to take to improve your credit report.
Beware of credit repair scams.
While this may sound simple enough, we understand that it is not so easy for many Americans. Repairing credit requires discipline and patience. You will need to create a budget so that bills get paid on time and stick to it. If there is false information on your credit report that is lowering your score, however, you may be able to take legal action to have it removed. If you have contacted the credit reporting agencies to no avail, contact us through the link on this page to see if we can help.
What happens when my credit dispute is not resolved to my satisfaction?
When you find a debt on your credit report that is not yours, it is up to you to file a dispute so that the debt is removed from your report. Unpaid debt can negatively affect your credit rating and prevent you from being able to be approved for loans or to qualify for lower interest rates. In order to properly challenge a debt, you must dispute it with both the creditor and the consumer reporting agencies (CRA). CRAs are required to follow certain procedures when a debt is disputed.
How to Dispute a Debt
If you are checking your three credit reports every year as recommended, you may discover mistakes on a report that lower your credit rating and affect your ability to get a loan. When the problem is a debt that you don’t recognize as being yours, you need to inform both the creditor who claims it is your debt and the CRA reporting the debt. To do this, you will have to write letters and attach documentation to both the creditor and the CRA that proves the truth of your dispute. Keep copies of the letters you send for your own records. Send the letters with a return receipt requested or via Fedex or UPS so you can prove the CRA and creditor received your dispute.
What the CRA Will Do Next
When a CRA receives a letter of dispute, they will investigate the merit of the claim and take one of the following actions:
Delete the disputed information in an expedited dispute resolution.
Determine that the dispute is frivolous and then notify you and give reasons for its determination. (Always save any response from the CRA or creditor.)
Forward the dispute to the creditor within five days to conduct an investigation.
When Your Dispute Doesn’t Go Your Way
If the debt is not removed from your credit report according to your wishes, you may file a statement of dispute which will require the CRA to place a note on all future credit reports that you dispute the information contained in the report. While this does not completely solve the problem, it does let potential creditors know that you have filed a dispute.
When to Take Legal Action
If you are not able to resolve a dispute with a CRA, you may seek litigation in a private action, but only if you can prove willful or negligent noncompliance by the CRA. Contact The Consumer Law Group, P.C. to discuss your situation and determine if you have a case of a Fair Credit Reporting Act violation.
What extra protections does the Fair Credit Reporting Act provide for active duty military personnel?
When you joined the military, you probably thought the biggest dangers you would face would be while guarding a military base, patrolling in a Middle Eastern country, or manning an aircraft carrier overseas. However, your training has prepared you for this possibility, and you are confident that you will be able to protect American interests as you have pledged to do.
But who is protecting your interests back home? While you are away, you are just as vulnerable to identity theft as anybody else, and may be even more so considering that your accounts sit idle for long periods of time and you have no way to check for possible unauthorized activity. You should be aware, however, that there is a way to protect yourself from identity theft and it is provided to you under the Fair Credit Reporting Act (FCRA). It’s called Active Duty Alerts.
How Active Duty Alerts Work
Whenever you are called to active duty, all you have to do is contact one of the three credit reporting agencies—Equifax, Experian, or TransUnion—and notify them that you are going on active duty. They will be required under the FCRA to place an Active Duty Alert on your credit report and to report your status to the other two agencies. Once this is done, you will be alerted if anyone attempts to open a line of credit in your name. This works as follows:
Someone uses your identifying information to try to open a credit card.
The loan officer or credit card company representative pulls your credit report to see if you qualify for credit.
The representative sees that you have an Active Duty Alert on your report.
The representative is now required to verify the identity of the person applying by either asking for a photo identification or by calling the contact number provided on the credit report.
You, or your designated stateside representative, will be called to verify the application for credit.
If a credit report is pulled by anyone for any reason, you will be notified.
The alert will be active for one year, unless you cancel it, and may be extended for another year if you have not returned from active duty within the year.
With these protections in place, you can be confident that your identity is safe while you are serving your country. If anything does go wrong, you may need the help of an attorney to straighten things out.
The Consumer Law Group Can Help Clear Your Credit
If you experience problems with correcting misinformation on your credit report, we are here to help. We are proud to work with members of the military from the Richmond area and look forward to hearing from you. Call our office at 804-282-7900.
Why do I have different credit scores and what do they mean?
Everyone seems to want to know your credit score—banks, lenders, landlords, even your employer. You hear friends and family members brag about their scores, but you don’t even know what your score is. How important is a good score? Where can you find out what your score is? We answer all those questions here.
Free Credit Reports
If you don’t know what your score is, the first step is to get a free copy of your credit report. You are entitled to one free report each year from each of the three national credit reporting agencies (CRA): Equifax, Experian, and TransUnion. Each of these agencies differs slightly in the kind of information they gather, so it is recommended that you check each report every year. Along with information on bank accounts and lines of credit in your name, the reports will also give you a credit rating, or score.
What Do the Numbers Mean?
When people refer to their credit score, they are most likely talking about their FICO score. Fair Isaac, Inc., invented the three-digit credit scoring system in the 1980s and their score is the one lenders most often use to evaluate your application for credit. To calculate your score, FICO takes information from each of the three CRAs and determines a separate credit rating for each CRA. In other words, your FICO score from Equifax may not be the same number as your score from TransUnion, but they will be close. FICO uses a scale from 300 to 850. While every lender sets their own cutoff points, a FICO score above 750 is generally considered to be excellent and a score below 600 is considered to be poor.
To make matters confusing, however, when you order a free credit report from one of the three CRAs, the score you will see will be one that the agencies created called the VantageScore. While this system is gaining popularity among lenders, it is still not as commonly used as the FICO score. Originally based on a scale of 501-990, VantageScore is now on a scale from 300 to 850, like the FICO scale. Again, your VantageScore may differ slightly among the three credit reporting agencies, but the numbers should be close.
VantageScore and FICO weigh various factors differently when determining a score, but what they have in common is that the higher your score is, the better it is for you when you are applying for credit.
Lenders that we often deal with will not consider a mortgage on your house with a score less than 620. So it is important to get any incorrect negative information off of your credit report.
We Can Help You Correct Credit Report Errors
The information on your credit reports and the various credit scores assigned to you are very important to your financial future. If there are errors on any of your credit reports, it’s important that you take action to correct the errors. We can help. Contact our office in Richmond at (804) 282-7900 to find out how.
What is a “credit reporting agency” under the Fair Credit Reporting Act (FCRA)?
Although the law is fairly clear about the rights of consumers, it isn’t always easy for the average person to make sense of the language of the law. One term you might see a lot as you look into your credit rights under the law is “credit reporting agency.” But what does that really mean for the consumer?
Understanding “Credit Reporting Agencies” and “Information Suppliers”
For the purposes of the Fair Credit Reporting Act (FCRA), a “credit reporting agency” is any legal entity—such as a company or a person—who reports or collects your credit information. This can include:
- Credit bureaus, like Equifax, Experian, and TransUnion
- The person or company that furnishes credit information for employment background checks
- The person or company that furnishes credit information to landlords
- Any person or company that collects, sells, or makes decisions about your credit information
Additionally, you have probably also seen the term “information supplier” as you’ve been researching your consumer rights or how to fix your credit report. Under the FCRA, “information suppliers” are the companies and other legal entities that give credit information to the credit reporting agencies, such as a company or legal entity that you owe money to. Both credit reporting agencies and information suppliers owe certain obligations to consumers under the FCRA, and consumers are given the right to take action when these entities violate their rights.
If you’re feeling overwhelmed with legal language and complex laws, don’t be afraid to ask questions and ask for help. There are many incidents of credit reporting agencies and information suppliers around the nation violating the FCRA, but many consumers are unaware that they have options for protecting themselves and their credit history.
Confused About Your Rights and How You Can Take Action? Get Experienced Help Today
If you need help protecting and fighting for your consumer rights, don’t wait any longer to get experienced help. At the Consumer Law Group, we help individuals speak up for their rights against companies and creditors, and we take pride in our history of successful cases. We can carefully explain your options and your rights—in language you understand—and make sure that you can make informed decisions about your situation. For immediate assistance with your concerns, you can call us today at 804-282-7900 or fill out the convenient contact form on this page.
How long will an unpaid debt remain on my credit report?
Negative information appearing on a credit report can easily happen to virtually anyone. You may forget to pay a bill, not receive your mail, or undergo an unfortunate and unexpected expense that you cannot afford to pay, such as a medical bill. The end result may be that the creditor reports a late or missing payment, resulting in negative information on your credit report and a weakened overall credit score. Fortunately for consumers, the Fair Credit Reporting Act requires that this negative information be removed after a certain period of time.
4 Questions for Determining How Long Negative Information Can Remain On Your Credit Report
If you have negative information on your credit report and are trying to determine when it might be removed, it is important to consider the following questions:
- What was the date of the first delinquency? Generally, most negative marks on your credit report must be removed seven years from the date of the last scheduled payment.
- Did you file for Chapter 7 bankruptcy? If so, the information relating to the bankruptcy can remain on your report for ten years. After that date, it must be removed.
- Did a creditor or other party obtain a judgment against you? Most judgments can only remain on your credit report for seven years. Some states, however, have statutes of limitations that allow for judgments to remain on your report for a longer period of time. If your judgment was issued in such a state, it can remain on your credit report for the longer period of time.
- Is the negative information relating to money that is owed to or guaranteed by the government? In these cases, the negative information can remain on your credit report forever, or until seven years after the date on which it was paid off. Examples include unpaid taxes and student loans.
If information is wrongly report on your credit report, you may be entitled to pursue legal action. In addition, you may also be entitled to damages if a debt collector uses illegal debt collection practices against you. We are here to help you protect your credit report and deal with harassment from creditors. We encourage you to contact us today for more information at 804- 282-7900.
Am I entitled to damages if someone violated my rights under the Fair Credit Reporting Act?
In today’s world, a person’s credit score is crucial to being able to do anything from renting an apartment to purchasing a car. Consumers are entitled to protections under the Fair Credit Reporting Act (FCRA) since their credit report is so important to daily life. When a party violates consumer rights under FCRA, consumers may be entitled to damages.
Parties Responsible for Damages Under the Fair Credit Reporting Act
Several rules are laid out under the Fair Credit Reporting Act. This includes rules as to who can access the report, what can be reported, how long it can be on a credit report, and what must happen if a consumer disputes the information. Violations of the Fair Credit Reporting Act may result in legal action. Parties who are potentially liable to a consumer under FCRA include the following:
- The credit reporting agency, also known as the credit bureau
- The party furnishing the information to the credit reporting agencies, whether it is a business or an individual
- The entity using the information in the credit report, such as an employer, landlord, or creditor who accesses your report with out verbal or written permission or an employer that accesses your report and takes an adverse action without providing a copy of the report to you.
It is important to understand which party may be responsible in the event that your rights under the Act are violated.
4 Types of Damages for a Fair Credit Reporting Act Violation
If a violation does occur, consumers may be entitled to the following damages:
- Actual damages. There is no limit to this amount, as long as you can prove the loss.
- Statutory damages. These damages range between $100 and $1,000. Consumers can take advantage of statutory damages even without proving that the violation caused you harm.
- Punitive damages, with no limit on how much. Punitive damages are decided by the court overseeing the proceeding.
- Attorney’s fees and costs.
In addition to obtaining damages for violations relating to your credit report, you may also be entitled to damages if a debt collector uses illegal debt collection practices against you. We are here to help. We encourage you to contact us today for more information at 804-282-7900.
Why should I ask debt collectors to verify my debt?
When debt collectors are coming after you, they may use aggressive, frustrating, and annoying tactics to try and collect what you owe. Fortunately, consumers are provided with some protection from creditors under the Fair Debt Collection Practices Act. Under the terms of the act, consumers have a powerful weapon at their disposal. Consumers have the right to require that a debt collector verify the amount and validity of the debt they are accused of owing. To take advantage of this important tool, however, you must act quickly. Failing to request debt validation could be costly.
Reasons to Request Debt Verification From a Debt Collector
If you do not request debt verification in order to determine who the original creditor is, you may have a more difficult time determining whether or not you have grounds to dispute the debt. Requesting that a debt be validated can reveal the fact that the debt collection agency is missing vital information about the debt. For example, the agency may be trying to collect the wrong amount of debt, or may be trying to collect from you when the debt is really that of someone with a similar name. If you do not request that the debt be validated, you could miss an opportunity to reduce or eliminate the debt and the debt collection agency can assume the debt is valid. Similarly, if you do not request the original creditor’s name and address within 30 days of receiving the first collection letter, the debt collection agency can assume the debt is valid and can then continue its collection effort, taking advantage of all legal collection efforts against you.
Reasons to Demand Debt Collectors to Stop Calling
If you know the debt is not yours or it was paid off, you can send the debt collector a simple letter that demands the debt collector stop contacting you in any way since the debt is not owed. Send the letter by certified mail with return receipt requested or by overnight mail. If the debt collector contacts you to collect after the receipt of the letter, contact us.
When it comes to debt collection, time is of the essence. We encourage you to act quickly by contacting us today at (804) 282-7900.