Reporting Restrictions On Old Obsolete Credit Accounts.

Disputing Credit Reports

If you were wondering when old, derogatory, yet accurate credit information comes off your credit report, there is good news and bad news regarding FCRA provisions that restrict the reporting of old or “obsolete” credit information on your credit file.  The good news is that the FCRA places significant restrictions on what old derogatory information may be reported on your credit file by a credit reporting agency.  The bad news is that in practice, the rules provide opportunities for unscrupulous debt collectors to “re-age” derogatory credit information, so it remains on your credit file longer than permitted by law.

With many exceptions, the general rule is that a consumer can expect to have derogatory credit accounts remain on their credit file for seven years. The date of the first delinquency determines the beginning date for calculation of the obsolescence period.  The end date for the reporting of derogatory information depends on the type of debt and circumstances surrounding the debt.  It is important to note that the date of first delinquency for the debt should not change if the debt is sold and is not altered by payment arrangements.

A credit reporting agency may report an account that is not charged off for seven years from the date of first delinquency.  An account that has been charged off or placed for collection more than 180 days after the date of first delinquency may be reported by the credit reporting agency for seven years and 180 days.  Finally, if the account is placed for collection or charged off before the expiration of 180 days from the date of first delinquency, the seven year period runs from the date of charge off or when the account is first placed for collection. Bankruptcy will remain on your credit file for 10 years, and different time periods apply for judgments, tax liens, criminal records, and certain student loans.

Sometimes a debt collector will “re-age” an old past due debt that should not otherwise appear on your credit file.  Re-aging occurs when the debt collector incorrectly reports the initial date of delinquency, commonly as the date that they acquired the debt. By reporting the account in this fashion, the seven year reporting period is improperly extended, which causes the collection account to remain on the consumer’s credit file longer than permitted.  Debt collectors like debts to remain on a consumer’s credit file because it provides them significant leverage to obtain payment on an old account.

If you are the victim of old information that should be removed from your credit report, your best recourse is to dispute the information with the credit reporting agency by informing them of the facts and circumstances supporting your position. For information on disputing inaccurate information in your credit file, please see my earlier blog post: https://yourfaircreditlawyernow.com/?p=36

In addition to FCRA claims against credit reporting agencies and furnishers related to old, obsolete credit information, the re-aging of collection accounts by a debt collector may also be a violation of the Fair Debt Collection Practices Act.  Given the different rules at play regarding this topic, you should not hesitate to contact a local consumer protection lawyer.  I am located in Virginia at 571-313-0412, but I would be happy to speak with you about your situation for a potential referral to a lawyer in your area.

 

Help, I AM the victim of identity theft!

Identity Theft

If you have discovered that you are the victim of identity theft, I would recommend that you act quickly and decisively to stop the thief as soon as possible.  The main things that you want to do are: place a fraud alert on your credit files, file a report with your local police department, contact the creditors who have had fraudulent accounts opened or accessed by the identity thief, and file a complaint with the Federal Trade Commission.  As to these activities, you should consider the following:

FRAUD ALERT– As discussed in another blog post, you should place fraud alerts on your credit file.  The fraud alert should slow the identity thief from opening up any new accounts.  If you contact one credit reporting agency, they are supposed to contact the other two.  If you have confirmation of an identity theft problem, I would call or notify all credit report agencies.  The fraud alert numbers presently are:

Trans Union fraud alert phone number 1-800-680-7289

Equifax Fraud alert phone number 1-800-526-6285

Experian Fraud alert phone number 1-888-397-3742

NOTIFY LOCAL POLICE OF IDENTITY THEFT– You can call your local police and see what their procedure is for filing an identity theft police report.  You need to take the time to file a police report because creditors and credit reporting agencies typically want to see that you filed a police report as an indication that your claim is genuine.  Having a police report will also help trigger important identity theft victim rights under the Fair Credit Reporting Act. In the county of my residence, Fairfax County, Virginia, identity theft reports can sometimes be difficult to obtain in person because our county is so large and busy.  The following links should help people in Virginia report identity theft to the police:

Alexandria, Virginia identity theft police report information: Non-emergency phone number (703) 838-4444.

Arlington County, Virginia identity theft police report information: http://www.arlingtonva.us/departments/police/incident/new/start-report.html

Fairfax County, Virginia identity theft police report information: https://www.fairfaxcounty.gov/police/ficor/

Henrico County, Virginia identity theft police report information: http://www.co.henrico.va.us/police/contacting-henrico-police.html

Loudoun County, Virginia identiy theft police report information: http://www.loudoun.gov/Default.aspx?tabid=1912&zoom_highlight=identity+theft#checklist

Prince William County, Virginia identity theft police report information: http://www.pwcgov.org/docLibrary/PDF/005845.pdf

Richmond, Virginia identity theft police report information: http://www.richmondgov.com/Police/index.aspx

Stafford, Virginia identity theft ploice report information: Non-emergency phone number (540) 658-4450

CONTACT CREDITORS– Contact the creditor directly and request to speak to someone in the fraud department. You should keep a log of your contacts, including the name of the person, what they told you, and what actions that you took as a result of the contact.  You should send these creditors a written communication by certified mail with information about your identity theft, a statement that you did not open the account and/or make the disputed charges, and identify the police report number with investigating officer if possible.  My personal belief is that you must prove your innocence. Do not assume creditors will believe you, or that the creditor will do what they tell you that they are going to do, follow-up. Keep a separate file for each creditor and maintain copies of all documents that you receive or send to each creditor.  You may be asked to complete a fraud affidavit .  If you receive one, make sure that you complete the document properly and return it as soon as possible.

NOTIFY THE FTC– The Federal Trade Commission has wonderful and free resources for identity theft victims.  I recommend that you use the FTC website as a reference source.  The FTC also logs identity theft complaints in order to stop and slow down identity thieves.  It is recommended that you notify the FTC when you are the victim of identity theft.  You can call the FTC at 1-877-438-4338 or contact them on-line to report identity theft, http://www.ftc.gov/bcp/edu/microsites/idtheft/consumers/form-filling-instructions.html#HowdoIfilloutthecomplaintform

Dealing with the problems associated with identity theft can be time consuming and a roller coaster of emotions as you work through the situation.  If you have any questions or need any assitance, please contact me at 571-313-0412.

 

 

 

 

Help, I MIGHT have been a victim of identity theft!

Identity Theft

I received a call this week in my Reston, Virginia office from a person who thought they may have been the victim of identity theft.   Ordinarily, this is not an uncommon event, but this situation was different because it was my wife.  I can tell you that it was a little unnerving to hear her tell me about the potential problem, and I have a new found empathy for people who may have been identity theft victims.

In my opinion, the first move at even the hint of a potential identity theft is to place fraud alerts on your credit files to alert potential credit grantors that you may be a victim.  With a fraud alert on your credit report,  you should stop or slow down the identity thief from opening up any new credit accounts. The system is supposed to work in a manner that allows you to contact either Equifax, Trans Union, or Experian. Once you contact the credit reporting agency and request a fraud alert, the first credit reporting agency is supposed to notify the other two credit reporting agencies.  At the time of this posting, the phone numbers to place a fraud alert on your credit file are:

Equifax fraud alert phone number: 1-800-525-6285

Experian fraud alert phone number: 1-888-397-3742

Trans Union fraud alert phone number: 1-800-680-7289

Next, I recommend that you obtain copies of your credit files from the credit reporting agencies.  After obtaining a copy of your credit file, check the open accounts to make sure that you initiated all of the accounts that appear on your credit report.  You should also check the inquiries to see if there are any credit inquiries that you did not initiate or do not recognize.  If you don’t see any new or unknown credit accounts or inquiries that you did not initiate, you might not have an identity theft problem.  I would recommend periodic monitoring of your credit files to make sure that no unauthorized accounts or inquiries appear on your credit report.

If you review your credit report and find accounts that you did not open or initiate, then you have moved from a potential identity theft victim to an actual identity theft victim.  At this point, you will want to go into full identity theft defense mode, which will be the topic of another blog post.

I would also recommend monitoring your existing accounts.  Call your credit card company to make sure there are no charges that you did not make.  Check to make sure no one has claimed to be a new authorized user of an existing account, changed the address on the account, or requested a new credit card for the account.  Check with you banking institution to make sure there have been no changes to any deposit accounts.

For more information from the Federal Trade Commission, I recommend: http://www.ftc.gov/bcp/edu/microsites/idtheft/consumers/detect.html.  As always, if you have any individual questions, I recommend that you contact a lawyer that specializes in credit report litigation in your area. For Virginia consumers, I can be reached at 571-313-0412.

 

 

 

 

Consumer rights regarding employment related credit reports.

Employment Credit Reports

Many consumers in Virginia, Maryland, and the District of Columbia are denied employment or fired because of inaccurate information in their employment credit reports.  If you have lost a job or job offer because of inaccurate credit or criminal information, you have very specific rights under the Fair Credit Reporting Act. Employment credit report cases are very complex, and it makes sense to consult with a lawyer regarding your specific situation.  Consumers have detailed rights as to employment related credit reports that a potential employer must disclose prior to obtaining an employment related credit report.

The FCRA requires that a potential employer provide a “clear and conspicuous” disclosure in writing before the employment related consumer report is procured or caused to be procured for employment purposes. This disclosure must be in a document that consists solely of the disclosure.  You are entitled to a separate, written disclosure that clearly discloses to you that a consumer report will be obtained for employment purposes prior to the time that a potential employer obtains a credit report.

Consumers also have specific rights prior to the time that an employer can take an adverse action based on or partially based on information contained in an employment related consumer report.  Prior to taking an adverse action, like not hiring a consumer because of information in a consumer report, the employer must provide a copy of the report and a description in writing of certain consumer rights.  The FCRA requires this disclosure so that a consumer may be able to correct any inaccurate information in their consumer report prior to the time that they are actually harmed by the information contained in an inaccurate employment related consumer report.

Many consumers lose employment because of inaccurate employment credit reports. These reports include information related  not only to late financial history, like charge-offs, judgments, and bankruptcy, but also include inaccurate felony convictions and criminal records. In a tough job market, employment offers will go to the next available candidate who need not explain why they were never convicted of a felony or other inaccurate reporting.

Consumers have very detailed rights as to employment related credit reports and are best served by contacting an attorney to discuss their specific factual scenario.  I would be happy to speak to you about your situation and potentially help you with your problem in Virginia or direct you to a local lawyer that may be able to assist you.

 

Inaccurate judgment, criminal record, and bankruptcy information.

Employment Credit Reports

Many consumers wonder why they have inaccurate judgment, criminal record, and bankruptcy information on their credit report.  The answer lies in the process in which the credit reporting agencies obtain the information.  Often times the information is obtained from entities called pubic record vendors.  These vendors obtain information from courthouse records, but the data mined from the courthouse can be old, modified, or limited in content.  The identifying information acquired can be as little as a common name and a street address, which leads to wrong information matching to another consumer’s credit report.  Many of these records do not contain social security numbers which also makes it more likely that the wrong public record information will match to the wrong credit report.  This leads to consumers having credit reports containing erroneous felony convictions, convictions that were of a lesser offense, inaccurate bankruptcy listings, and inaccurate judgment information on a credit file.  These are serious problems than can cost a consumer a mortgage or a job offer.

One of the largest entities possessing public record information is a company called Lexis-Nexis.  Lexis-Nexis has lots of data in its files on all of us, and it has purchased many smaller public record vendors so that it can have even more data.  Many consumers know to monitor their financial credit report, but they should also monitor information contained in their public record for other types of inaccuracies that are different than traditional credit accounts like criminal convictions and tax liens.  Many employers are conducting background checks, and you should know the information  thats is reported about your history. You can obtain a copy of your Lexis-Nexis file by following the instructions from Lexis-Nexis at the following link.

https://personalreports.lexisnexis.com/access_your_personal_information.jsp .

Inaccurate criminal record information and inaccurate judgment information can be some of the worst inaccuracies possible in the area of credit reports, and can be very difficult to have removed from your file.  If you have this highly damaging information on your credit record, you should consult an attorney who specializes in credit report law.  I would be happy to discuss any issues with you.

How your credit score is calculated.

Credit Scoring

The best answer to the question of how your credit score is calculated is that no one knows exactly how the score is determined because credit score models and formulas are closely protected secrets of the companies that generate the credit score.  A consumer’s FICO score is the most commonly known credit score, and it is used for
underwriting home loans, car loans, and credit cards.  While we do not know the exact formula, we do know key elements of your credit history that are used to generate the credit score. These areas include:

Your payment history. Approximately one third of your credit score is based upon whether delinquent payments have been noted on existing accounts.  Keep in mind that
recent missed payments and major delinquencies like collection accounts and judgments affect your credit score more than older problems.  This does not mean old debts do not hurt you because they do, but more recent deliquency hurts you more.  Get current on your bills, and stay current on your bills.

Your level of debt.  This element is the next biggest factor used to determine your credit score and is believed to be about 30% of the credit score.  If you maintain a lot of debt at or near the top of your available credit then your credit score will be adversely affected.  It is a better practice to refrain from maxing out a credit card and be careful that you do not carry many credit cards at or near the high credit limits.  You may also want to avoid signing up for excessive department store credit cards and then charging close to the maximum of your available credit after opening the account.

Your credit history length.  Another element of your credit score is the length of your credit history.  Obviously longer good credit history is better and more established then shorter credit files.  Lenders do not like “thin credit files” because they are smaller and therefore harder to rely upon because of the shorter credit history. Personally, I always keep my older credit lines open even if I use the credit line infrequently because I want to have a credit file that has older rather than newer credit accounts.

Your type of credit.  This is a smaller element of your credit score, but it does help determine your ultimate credit score.  Some lenders believe that getting a loan from a bank is better credit than obtaining a loan from a finance company.  Moreover, the scoring models are believed to prefer a mix of installment and revolving debt.
This element of a credit score is personally my least favorite as I believe this area is too subjective, but consumers should be aware that they could be penalized based upon from whom they obtain credit.

Your credit inquires.  Many consumers that I speak with regarding credit report inaccuracies in Virginia are overly fixated on their credit inquiries.  I have seen reports that credit inquiries are believed to account for as little as 10% of a credit score.  Credit inquiries are typically a problem when they are broad based across many different types of credit.  If you apply for a mortgage, car loan, department store account, and credit card all in a short time period, the frequency of the applications to different types of credit could negatively impact your credit score.  On the other hand, multiple inquires to shop for the best interest rate to purchase one car will probably not have that big of impact on your credit score.

Knowing how your credit score is calculated is important to increasing and protecting your credit score. By knowing the factors, periodically checking your credit file, and
correcting inaccurate credit reports, a consumer should receive the benefits of
better interest rates on loans for houses, cars, and credit cards.

 

What happens after you send your credit dispute letter.

Disputing Credit Reports,

After you have mailed your credit dispute letter and supporting documentation to a credit reporting agency (CRA), the process typically results with your letter being
outsourced to another country like India, Costa Rica, Jamaica, or the Philippines
for processing.  Whether you disputed credit information with Equifax, Experian, Trans Union, or another CRA will ultimately determine the particular country in which your dispute is outsourced.  When the CRA receives the credit dispute letter, it normally has the dispute letter with attachments scanned into its system.  Next, the CRA has the foreign-based processor review the letter and documentation to identify your particular type of dispute and select a code number that best describes your particluar dispute. At this point, the CRA must notify the furnisher of your dispute. The FCRA presently requires that the CRA must notify the furnisher of the dispute within five business days of receiving your credit dispute letter.  The CRA will send notice of your dispute through an electronic system known as E-OSCAR via a form called an Automated Consumer Dispute Verification form or “ACDV”.  The furnisher of the disputed credit information will receive the ACDV and has a duty to conduct a reasonable investigation of the dispute.

I think that it is helpful to imagine your credit dispute letter running on two parallel train tracks, one with the CRA and one with the furnisher of the information.  When the CRA reviews your dispute, if it determines that the disputed information is inaccurate,
incomplete, or cannot be verified, it has to delete the item of information or change the information as appropriate given the results of its reinvestigation.  The time required for a CRA to complete its investigation depends on certain factors and can be extended, but a good rule of thumb is that a CRA has about thirty days to complete the investigation of your credit dispute.  In addition, the furnisher of the disputed credit information also has a responsibility to investigate your dispute.  The furnisher should make a detailed inquiry into its records to assure that the information reported is full, complete, and accurate.  Often times the furnisher will only check its computer records to determine if it has already made a decision regarding the disputed account and will not conduct the thorough analysis required.  After the furnisher completes its investigation, it will send a response to back to the credit reporting agency.

When the investigation of your credit dispute letter is concluded, the CRA must send you notice of the results of the reinvestigation. The results of the reinvestigation will typically be mailed to you unless you have authorized some other method of notice.  The notice of the results of the reinvestigation should also include notice that you may request a description of the procedure used to determine the accuracy of your disputed
information.  It can be a good idea to request this information from a CRA if incorrect information remains on your credit file or if the source of the information is of dubious origin.  You will also receive notice of the right to have previous users of your credit file notified of the disputed account.  Finally, you also have the right to place a statement of dispute in your credit file describing why you believe a certain item of information is incorrect.  As with the credit dispute letter you send, you will want to keep a copy of the results of the reinvestigation of your dispute letter. If you have many disputes with multiple CRAs, you will probably want to purchase a multi-pocket file folder as your records will become numerous. If your disputed credit report information remains on your credit report following the initial credit dispute letter, I would recommend that you contact an attorney that specializes in credit report litigation.

 

How do I dispute inaccurate Equifax, Trans Union, or Experian credit reports?

Disputing Credit Reports, FAQ, , , ,

Mail a written credit dispute letter along with supporting documentation to the credit reporting agency that reports the inaccurate information.  The letter should include your identifying information (name, date of birth, social security number) , an identification of the inaccurate information, a description why the information is inaccurate, and any documents that support why the information reported is inaccurate.  If you wish to discuss your letter before mailing it to the credit reporting agency, please call me at 703-390-2905. 

The reason you want to send this is information is related to the provisions of the Fair Credit Reporting Act (FCRA).  Under the FCRA, a consumer must initiate the dispute of an inaccurate credit report directly through a credit reporting agency (CRA) in order to trigger the liability provisions of the act. This means that you must send your credit report dispute letter including documents related to your dispute to the credit reporting agency (typically Equifax, Trans Union, and Experian). You may also want to provide a copy of the dispute to the furnisher of the incorrect information, but providing the information directly to the furnisher will not trigger your right to file a lawsuit.  After the CRA receives the dispute, it has a duty to send a notice of the dispute to the furnisher of the information.  Under the FCRA, both a CRA and a furnisher have a duty to conduct a “reasonable investigation” of the information that you have disputed.  Because reasonableness can often be in the eye of the beholder, certain information will increase the chances that an investigation of your credit report dispute will be resolved in your favor.

First, a good dispute letter should clearly identify your name, address, social security number, and date of birth.  By providing this information, you reduce the chance that the CRA can claim that they could not locate your credit information in their data base.

Second, you should clearly identify the account(s) that you are disputing as well as describe the facts supporting your position why the credit reporting is incorrect.  Often times a CRA can claim that they do not want to resolve disputes between you and a third party furrnisher.  To minimize this argument, you can identify the facts that demonstrate why your position is clearly correct and reference as many documents as necessary to demonstrate why the information reported is inaccurate.  You should also include the supporting documentation as part of your dispute package. Letters, invoices, and/or contracts involving the furnisher of disputed information can make for good proof of your argument.  In the event that you are a victim of identity theft, you should also include an identity theft affidavit, police report, and/or identification of the police report number with the investigating officer named.  For information about dealing with the affects of identity theft, please review this post on what to do if you are an identity theft victim.

Third, include a statement that describes how the inaccurate credit reporting is hurting you and request that the CRA take immediate action to solve your problem.  Whether that means correcting an inaccurate account, deleting a judgment that is not yours, or removing a false criminal conviction from an inaccurate employment credit report, you should request that the CRA stop reporting the inaccurate information.  If you have lost a job because of an inaccurate employment credit report or lost a mortgage because of an inaccurate credit report, I would tell the CRA the details in the dispute letter.

Finally, I recommend that you personally sign your letter, make a copy of the signed letter including the attachments for your records, and mail the letter via both first class mail and certified mail return receipt requested.  The Federal Trade Commission also publishes information that you can consult when disputing inaccurate information which is located at http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre21.pdf.  If you ever have any questions, you can also contact me.