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Know your rights when dealing with credit bureaus
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For more information contact:
Kelly Rote (713) 394-3201 |
Release Date: November 22, 2004 |
(800 words)
Written by Kelly Rote
Communications Manager, Money Management International
According to Consumer Reports magazine, an estimated 48 percent of consumers have errors on their credit report. The sheer volume of information supplied by creditors to the bureaus might be one reason. In fact, one of the major bureaus estimates that each month, there are more than 4.5 billion updates to credit report information throughout the U.S. If you have ever checked your credit report and found an error, you probably know how frustrating the process of correction can be. Knowing your legal rights can make it less painful.
Your most effective weapon in dealing with the credit bureaus is the Fair Credit Reporting Act, passed by Congress in 1970 and enforced by the Federal Trade Commission. Legally, the FCRA protects you by requiring credit bureaus to furnish correct and complete information to companies requesting credit histories for evaluation. These reports typically are used to evaluate applicants for loans, credit cards, insurance and employment.
If you suspect that your credit history has been misrepresented, there are several steps to take. If credit is denied because of information supplied by a credit bureau, the company that denied your application must tell you the name and address of the bureau. Make a copy of your denial letter and submit with a request for your credit file. We recommend that you also send the same copy of the denial letter and request to the two remaining credit bureaus.
In many states, the bureau is only required to send you a copy of your credit report if you ask for it. You are entitled to know all information on the report, as well as the sources of information. Also, if a credit bureau’s information is the reason you are denied for credit, the report is free, but you have to request it within 30 days. Otherwise, the bureau may charge a nominal fee.
Once you’ve received the credit report, read it thoroughly. If you find a mistake, there are steps you can take, such as writing to the credit-reporting agency disputing the item. When they receive your letter disputing the bill and the balance shown, they must investigate the item in dispute (usually within 30 days) by presenting the information you submit to the creditor. The creditor must review your evidence and report its findings to the credit bureau. The credit bureau must then give you a written report of its investigation and a copy of your report if it results in a change.
When submitting information and evidence to the credit bureaus, supply them with as much information as you can about the account so they can easily identify the account. Supply them with your name, address, telephone number and social security number, the creditor’s or collection agency's name, your account number, a short explanation of the facts and the specific resolution you are seeking.
If the investigation by the creditor does not resolve the dispute, you may add a brief statement to your file giving your version of the dispute. The credit bureau must normally include a summary of your statement in future reports. For example, if you are divorced and have a defaulted loan on your credit report that was caused by a spouse during a trial separation, briefly describe the situation along with any facts that support your claim that the problem was not your fault. If your application is a close call between approval and denial, this statement could make the difference.
You can also dispute inaccurate items with the source of the information. You need to write to the creditors disputing the bill and the balance shown. The creditors may not then report the information to the credit bureaus without including a notice of your dispute. In addition, once you have notified the source of the error in writing, it may not continue to report the information if it is, in fact, an error.
Finally, if you still cannot resolve disputes with a credit reporting bureau, and you feel a violation of the FCRA may have taken place, it may be worth the effort to contact an attorney because that information will stay on your record for at least seven years; 10 years if it’s a bankruptcy. Sections 616 and 617 of the federal "Fair Credit Reporting Act" permit you to sue for "Willful Noncompliance" or "Negligent Noncompliance" of the FCRA. You can also report it to the Federal Trade Commission, Washington, DC 20580. While they cannot act as legal counsel in private disputes, your information may be vital to the enforcement of the FCRA.
The following is a list of names and internet addresses of the three major credit bureaus where you can obtain further information on how to dispute an item on your credit bureau file: Equifax, www.equifax.com ; Experian, www.experian.com ; Trans Union Corp, www.transunion.com.
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Money Management International, is a non-profit community service organization that provides confidential financial guidance, counseling and debt management assistance to consumers. MMI helps consumers trim their expenses, develop a workable budget, lower their debt payments and repay debts. Services are available by phone. To visit with an MMI counselor, call toll-free 1-800-762-2271- 24 hours a day, 7 days a week. Spanish speaking counselors are available. Consumers can also learn more by visiting the MMI home page at www.moneymanagement.org.
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