What Good Credit Means
A summary of an individual’s credit history, a credit report serves as both a marker for an individual’s financial history and a measuring tool for business to consider when offering financial services to an individual.
Credit reports change depending on the individual’s financial decisions. A bad credit report can limit an individual’s financial opportunities, but the individual always has the option of working to improve the report and have more options for future financial decisions.
While a credit report largely remains the responsibility of the individual, errors can occur. The Fair Credit Reporting Act (FCRA), drafted in 1970 in response to such errors, serves to consumers from being unjustly damaged by inaccurate or arbitrary information appearing on their report.
Examples of credit report errors can include:
MERGED FILES
-When information from one consumer’s file merges with another consumer’s file. Merged files can result in the information of a person named John C. Smith negatively effecting the information for a John J. Smith. But don’t let the example fool you; family members with the same name frequently deal with this error.
One real world example is a friend of mine had a Chapter 7 Bankruptcy show up on his Equifax report, causing him to be turned down for a loan. The case number on the Bankruptcy actually correlated back to a Chapter 7 that had been filed by his father, that my friend was in no way a party to. They did however, have the same first and last name and lived at the same address
IDENTITY THEFT
-When one individual steals the identity of another individual to gain access to commit fraud in the name of financial gain. Probably one of the more well-known example of credit report errors, as the practice has become more rampant in the 21st century. Victims of identity theft should contact the Federal Trade Commission for aid.
UNAUTHORIZED ACCESS
-When individuals or companies attempt to access an individual’s credit history without consent. Checking a report can cause an individual’s credit rating to drop by several points, and no one should access another’s financial information without their permission.
INACCURATE PUBLIC RECORDS
-When the information on the most recent version of an individual’s credit report contains outdated information, such as a settled debt or line of credit no longer open. A credit report should accurately reflect an individual’s most current credit rating status.
STALE OR RE-AGED DEBT
-When a credit report contains outdated or incorrect credit information, such as an ongoing lawsuit that you were in fact victorious on, or a judgment that has since been paid.
Starting the Dispute Process
If an individual discovers an inaccuracy in their credit report, they should immediately send a letter of dispute to the consumer reporting agencies (CRAs) and include any relevant information refuting the report’s inaccuracies. Once submitted, the CRAs must reinvestigate the issue, which will generally involve communication with the furnisher of that information and require the CRAs to provide the correct information or delete the entry altogether.
Free Consultation Available
Individuals can get a free copy of their credit report once a year from each of the three CRAs at www.annualcreditreport.com. For a free consultation and a complimentary credit report review, contact Foley Law. In many cases, our company may be able to help dispute the inaccuracies and, if necessary, discuss the possibility of bringing suit against the CRAs and/or furnishers.