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So you're new to credit reporting and don't know where to start?
The following is a (very) basic introduction. You have many more legal rights and avenues than can possibly be listed here, so be sure to
read through the posts, use the "search" function for topics that interest you, and feel free to ask questions when needed!
You will find many people willing to help you along the way, so don't be shy....post away
Well, here I am......where do I start?
Before doing anything else, you must know where you are, and what you have to work with. The very first step is obtaining current copies of all 3 of your credit reports. The information contained in your report changes, sometimes frequently. A current copy is the best place to begin.
Each Consumer Reporting Agency (CRA) maintains its own, seperate database, and the information on each report is often different. Please plan on getting all 3 reports.
Here's how to get your report:
1) If you have been denied credit, insurance or employment, you should have received a "notice of adverse action". This will spell out how to get a free copy of the report used in the decision. Note that this will not get you copies of the other two reports.
2) Call, Write or Visit the website of the CRA's . The contact information changes occasionally, and is most current in our "databases" section.
Some states allow for a free report every so often, others require a small fee, around $8.00 or so.
3) Sign up for one of the credit monitoring services. Several allow for a free trial. Please pay attention to how many "new" reports can be pulled when you join. Some allow a new report daily, others only 4X per year. You can always ask for opinions in the credit forum before comitting yourself to a membership.
If you are married, your reports are still seperate. There may be "joint" accounts common to both reports, and your spouses' name may be noted on your report, but otherwise your report is yours alone. Changing an item on yours does not affect your spouses.
Ok, I have my report(s). Now what???
Now to try to understand what is being reported!
You report is divided into several sections:
1) Personal Information.
This section contains your name, address, employer, date of birth, Social Security number, spouses' name. Several variations of each may be listed, along with former addresses and names.
This information is supplied both by creditors, and by you when you fill out a credit application.
2) Public Records.
Bankrupcies, liens, judgements, garnishments, felony convictions may all be listed here. Anything that is a public court record is fair game.
3) Credit history;
Loans, leases, mortgages, credit cards, collection accounts will be listed here. Also listed is your payment history, and various details about each account.
4) Inquiries.
This is a listing of everyone who has "pulled" a copy of your report.
Often divided into two sections, "hard" and "soft".
"Hard" inquiries are a result of you applying for something, or a current creditor looking at your report. These are the inquiries that lenders can see.
"soft" inquiries are only viewable by you, and are commonly the result of you pulling your own report, or marketing inquiries.
Now, each section in more detail:
1) Personal information.
Perhaps the first thing to attack is all of the old addresses and name variations. These serve no positive purpose on your report. If this information is needed by a creditor, you can supply it on an as-needed basis. These items can be removed by calling or writing the CRA, and asking for their removal, as they are "not accurate".
2) Public Records.
Review this information carefully. It often passes through many hands between the courthouse and CRA, and is prone to errors. Information here can be disputed just like anything else on your report. Be cautious of sending in documentation in an effort to "correct" your report. You may find that you have inadvertently verified information by your own submission, making it's dispute nearly impossible later.
3) Credit Information.
The important details here are-
Date of Last Activity. This is the date that is used to start the 7-year reporting clock.
Date Last Reported This is the last date that the creditor supplied an update to the CRA. It has no bearing on reporting period or SOL computation.
Account Type: R= "revolving" I="installment"
followed by payment history:
0 Too new to rate
1 Pays account as agreed
2 Not more than two payments past due
3 Not more than three payments past due
4 Not more than four payments past due
5 At least 120 days or more than for payments past due
7 Making regular payments under W.E.P (wage earner plan)
8 Repossession
9 Bad Debt; placed for collection; skip
Limit/Original Amount:
For installment loans, the amount of the loan at it's inception.
For revolving accounts, your credit limit. This is used to compute your credit utilization %, an inaccurate low limit will lower your score.
Balance:
The amount owed as of the date reported.
Open/Closed:
Whether an account is open, active, and availaible for your use, or
closed and no longer usable.
Closed by Consumer indicates that the account was closed at your request. Neither positive or negative.
Closed By Credit Grantor indicates that the acount was closed by the creditor, often involuntarily. This is nearly always seen as a negative.
4) Inquiries:
Listed by date, this is a list of who has pulled your report.
There are specific reasons which must be met before anyone can pull your report. "Permissable Purpose" referrs to the legal requirements for anyone to do so. Generally, you must:
1) Apply for something, like credit or insurance.
2) Have a current, open account with the creditor.
3) Have otherwise given your permission for the report to be pulled.
Companies or individuals pulling your report without "permissable Purpose" are violating Federal Law, and subject to fines of $1,000, more in certain states.
How long do items remain on the report?
Bankruptcies remain 10 years from the date discharged.
Other negative items remain no longer than 7 years from the date of first delinquency.
Positive items can remain indefinitely, but no less than 10 years.
Inquiries remain for 2 years, with those in the last 6 months usually given the most consideration.
Credit Scoring
Often, a Credit Score is provided with your report, or available for an extra charge.
There are 2 types of scores.
FICO score, sometimes referred to as "Beacon" is the industry standard, and the only score that carries any real value. It is calculated by the Fair Isaac Company using the data contained on your report.
CRA-Specific scores are scores provided by the CRA's themselves,
using their own credit-scoring formula. These scores are referred to as:
"TransUnion score", "Experian Credit Expert" score, "CreditXpert".
These are of varying accuracy, and should never be relied on for an accurate indication. Only the true FICO score will be used by potential creditors. It is not unusual for these CRA-specific scores to differ from your FICO score by 100 points or better in certain circumstances.
Experian does not make FICO scores available to the comsumer. The only way to get this from Experian is to look at one pulled by a mortgage broker, or other financial professional. The Score provided the consumer by Experian is proprietary, but can provide a useful benchmark.
*Update* Experian Fico scores are now available through www.myfico.com
Ok, I understand what is being reported.
But these accounts are not accurate, not mine, and I never heard of half of them!
Head to the Database section, and find the links to the FCRA ( Fair Credit Reporting Act) and FDCPA ( Fair Debt Collection Act).
http://www.creditboa...wtopic.php?t=34
These are the laws that apply to credit reporting and debt collection.
You have specific rights regarding both. Understanding your rights is basic to moving forward. Read and re-read until you are familiar with these laws. Post questions as necessary for clarification.
You have the right to dispute any information contained on your credit report. This is done by writing the CRA, or using the dispute form on their website. The CRA then is required to verify that information with the furnisher. They have 30 days by law to do so.
If such information cannot be verified, it must be deleted.
Note that whether the account is "really" yours or not has no bearing on their responsibility to verify it. If it cannot be verifed, it must be deleted. Period.
You also have the right to "validation". This is demanding that the creditor reporting the information prove to you that the account is really your responsibility, and that the balances, etc are accurate. In the case of collection agencies, they must also prove that they have legal right to collect the debt. They must STOP all collection activity, including reporting and verifying, until they supply proper validation to you after a written request. Although no time limit is specified for them to validate, they cannot continue collection activities until they provide such. Sometimes, Collection Agencies will stop collection activities and return the account to the original creditor rather than validate. (This is perfectly legal )
*You do NOT have legal right to validation under the FDCPA when dealing with an original creditor. They may supply validation at their option, but are not required to do so. However, you do have the right under the FCRA to dispute directly with an original creditor any information reported that you feel is incorrect. This can be found in section 623. Once they have received your dispute, they must investigate the reported info and, they must also report the acct as disputed with the cra's.
You may also have additional rights under the FCBA (Fair Credit Billing Act), and possibly your state's laws.
If you demand validation from a creditor who is already listing a derogatory tradeline on your credit report, they are required to note that account as "disputed by consumer" ( or similar language). They may NOT place a new listing, or verify a current listing with the CRA until they have provided you with validation.
It is most always a good idea to send validation demands via CMRRR.
(Certified Mail Return Recipt Requested) as this gives you proof, in the form of a recipt ("green card") that your demand was received, and on what date.
Sample Validation letters here
Back to disputing with the Credit Bureaus;
It's never appropriate to make Misstatements to a CRA (or anyone else).
There are ways to accomplish your goals while remaining 100% truthful and honest- it's the best way to go.
For example, while it may be tempting to dispute a known account as "not mine", it's a better option to instead make a request that it's validity be proven.
"Please provide documentation that this account is accurate and belongs on my report".
Also be very careful in what information you supply to the CRA's. If you supply court papers, or collection statements in an attempt to correct your report, you may find those very papers used against you later! You will have difficulty questioning an account that you proviously verified yourself.
Here's a simple "not mine" dispute letter to the CRA's:
--------------------------
Credit Reporting Agency
12345 XXXXX street
Wherever, USA
Dear Credit Reporting Agency,
Please delete the following account from my credit report, as it is not mine:
Account Name, Account #######
Your Name,
Your Address
Your report or confirmation number if availaible.
--------------------------------
And one that instead makes a request that an account be proven:
--------------------------
Credit Reporting Agency
12345 XXXXX street
Wherever, USA
Dear Credit Reporting Agency,
Please provide evidence that the following account belongs on my report and that my rights have not been abrogated.
In the event that none exists, please delete this damaging account.
Account Name, Account #######
Your Name,
Your Address
Your report or confirmation number if availaible.
--------------------------------
They have 30 days to verify their information, correct the information or delete the account. You will be provided with the results of their investigation and a new copy of your report ( if anything has changed) after the investigation is complete.
Sheesh. I've read all that and I'm still lost.
Where do I start?
Here's a post that may give you some basic direction:
http://creditboards....t=0#entry561015
An excellent overview with links to all the basic information and must reads:
http://creditboards....showtopic=14797
What is "B", you ask?
http://creditboards....showtopic=28389
General glossary:
http://creditboards....hp?showtopic=32
Letters? Yeah, we love those! Here's some samples used for various purposes:
http://creditboards....hp?showforum=18
Note: Generally, it's best to modify letters to suit your situation. CA's/Cra's get these "form" letters by the dozens.
Read over several samples that suit your purpose and use them as a template to write your own.
PsychDoc's excellent seminars- For beginners on up. This is a must-read series.
http://creditboards....howtopic=142032
Well, there, you've made it through the introduction.
Grab your reports and jump on in!
**Nothing in this post, or this forum is intended as legal advice.
Should you require legal advice, please contact a qualified attorney**
