Tag Archives: mixed credit files

How does a credit reporting agency create my credit file?

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Credit reporting agencies create a consumer credit file when banks, credit card companies, collection agencies, etc. (“furnishers” as defined by the Fair Credit Reporting Act) provide credit information about their experiences with a consumer.  These experiences can be credit inquiries, on-time payments, late payments, or charge-offs.  Furnishers typically provide this information to the credit reporting agencies in the industry standard Metro 2 Format.

The Metro 2 Format is an electronic mechanism so that credit reporting agencies have a standardized system to receive and report credit data in electronic form.  As part of the format, credit information such as account type, account status, account balance, and account history is converted into Metro 2 codes that can be associated and reported with the identifying information for an individual consumer.  The organization and maintenance of this information results in what the consumer refers to as their respective “credit file.”  Conceptually the credit data information maintained on a consumer is more like data in a cloud that can result in a different credit file for a consumer depending upon the information input in the inquiry process as part of a credit application.  Most consumers are surprised to learn that credit reporting agencies do not keep copies of the credit reports that are issued when a consumer applies for credit.  The credit reporting agencies use matching algorithms that are programmed to place certain information in specific places and provide a credit report.  These reports are organic in the sense that the information reported can change depending on the time and circumstances.  When a credit reporting agency receives Metro 2 data from a new furnisher regarding a consumer, the credit reporting agency attempts to match that new information with the best possible match of credit data already in possession of the credit reporting agency.

Credit report errors of mismatched or mixed credit information occur when the data received by the credit reporting agency is associated with the file of a different consumer.  Mixed credit information can be the result of the incomplete or inaccurate information being associated with the wrong consumer.  For example, a furnisher could transpose the social security number digits on an account that would result in the information being associated with the wrong consumer.  Similar names or similar social security numbers for individuals that live at the same addresses can cause data to be mixed inaccurately and lead to a credit report error.  The end result can be catastrophic if the inaccurate credit information is placed on a consumer’s credit report just as the consumer needs to use their credit to obtain a mortgage or buy a car.

When a credit report error happens, the consumer should dispute the inaccurate information immediately with the credit reporting agency.  Please see my previous post with helpful information on how a consumer can dispute inaccurate information on their credit report.  If you would like to speak to me about inaccurate information in your credit report or a credit report error about an employment related credit report, please contact my office at (703) 390-2905.

How do consumers have mixed credit files?

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If you are a mixed credit file victim in Herndon, Virginia, a credit report lawyer can help you sort out the mess of an inaccurate credit file or a mixed up credit file.

A mixed inaccurate credit file occurs when a credit account belonging to another individual becomes associated with your credit file. This can happen in any number of ways, for example:  incorrect spelling of names, transposition of social security numbers, similar names, two people with nearly identical social security numbers, or the mixing of generational differences like Jr. and Sr.

Our law firm in Reston, Virginia has conducted jury trials involving inaccurate credit reports containing mixed credit files.  From deposition and trial testimony, we have learned that the matching process for associating credit accounts does not require a nine for nine social security number match, does not require a date of birth match, and does not require a name match.  The computer systems simply associate data with other data that may be an appropriate match or may be the credit of a completely different person.  In identity theft cases, we have also seem the identity thief’s actual bad credit become associated with the victim’s good credit.

Consumers do not have a credit file like you would associate with a file in a traditional filing cabinet.  Credit reporting agencies simply maintain data in a cloud like environment.  When a credit reporting agency receives  data from someone requesting a consumers credit file, the credit reporting agency uses the provided information to match the data it maintains, with a credit reporting agency then providing a credit report containing information that best matches the associated data at that particular time.  When credit information contained in the agencies records is incomplete or inaccurate such that it becomes associated with the wrong person, the credit report provided will contain mixed and inaccurate information.  This can be a real problem in dealing with abusive debt collectors because they will collect on an account that is actually the debt of another person with a similar name.

Solving an inaccurate credit report or mixed credit file usually requires the services of an experienced credit report lawyer.  Having dealt with the problems on other occasions, we know how to best solve your particular problem.  If you would like to speak to me about your mixed credit file, I can be reached at 703-390-9205.  Our office also accepts inaccurate credit report cases for mixed credit file victims in Pittsburgh, Pennsylvania.

How does a credit reporting agency violate the FCRA?

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Two core provisions of the Fair Credit Reporting Act require credit reporting agencies (Experian, Equifax, and TransUnion) to adopt reasonable procedures to assure maximum possible accuracy and to investigate consumer disputes of credit information.   Violations can occur if the credit reporting agency creates an inaccurate mixed credit file by placing another person’s information on your credit file, notes a judgment on a consumer’s credit file that a court vacated, or provided any other inaccurate or misleading information on a credit report. 

One of the most common  FCRA violations for a credit reporting agency is based upon the failure to conduct a reasonable investigation of inaccurate information in a credit file after receiving a credit dispute letter from a consumer, which violates 15 U.S.C. 1681i.  After receiving notice of a consumer dispute, the credit reporting agency has a legal duty to review information provided with the dispute and conduct a detailed systematic investigation into the information that is reporting.  Experian was found liable for a negligent investigation of a consumer credit dispute, and the court stated, “When conducting a reinvestigation pursuant to 15 U.S.C. 1681i, a credit reporting agency must exercise reasonable diligence in examining a court file to determine whether an adverse judgment has, in fact, been entered against a consumer.  A reinvestigation that overlooks documents in the court file expressly stating that no adverse judgment was entered falls far short of this standard.” Dennis v. BEH-1, LLC 520 F.3d 1066 (9th Cir. 2008).  There are many other instances when a credit reporting agency can be held liable for violating the FCRA, and a consumer with inaccurate information on a credit report should not hesitate to contact a consumer credit report law specialist. Our office in Reston, Virginia has handled numerous cases involving inaccurate credit reports, and we have litigated inaccurate credit report cases in the Alexandria, Richmond, and Pittsburgh federal district courts.

As for maintaining reasonable procedures for maximum possible accuracy, 15 U.S.C. 1681e(b), requires a credit reporting agency not to just establish reasonable procedures, but to follow reasonable procedures for credit report accuracy.  The remedial purpose of the FCRA to protect consumers would not be achieved if the credit reporting agency simply maintained pro forma procedures without any meaningful effort to follow those procedures to assure accurate credit information.  Credit reporting agencies violate the FCRA when inaccurate information appears on a consumer credit report and the consumer presents evidence that the credit reporting agency failed to follow a procedure maintained to assure that type of inaccuracy does not occur on a credit file.  Because these procedures are confidential in nature, a highly specialized consumer lawyer that has reviewed credit reporting agency procedures for several years will typically be a consumer’s best resource to have inaccurate information removed from their credit report.

As with any credit report problem, I would be happy to speak with you at (571) 313-0412 regarding your inaccurate credit report for potential representation or referral to a specialist in your particular area.

Why am I not getting my credit report after my request?

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Previous topics have discussed how to obtain a free copy of your credit report, and how to review your credit report.  However, in some instances consumers have an initial credit report problem because they cannot get a copy of their credit report upon request.  Simple reasons like entering incorrect data, transposition errors, and incorrect responses to security questions could be the reason that a consumer does not receive a copy of their credit report, but a larger problem could exist because of the manner in which credit reporting agencies store data.

Credit reporting agencies receive information about consumers in bulk from furnishers, and they maintain that information as data in their computer system.  When a potential creditor or consumer requests a credit report, the credit reporting agencies place the information provided into a matching algorithm system that compares the data input with all the data that the CRAs maintain.  Because the matching algorithms are proprietary, we do not know exactly how they work, but it has been revealed in trial testimony that a nine for nine match of social security numbers is not a requirement for a particular piece of credit data to match to a credit file.  As a result, if pieces of furnished data are incomplete or inaccurate, the data will not match to an existing file which can cause mixed files, merged files, or multiple files.  Please see my previous post on mixed and merged credit files.

When consumers try to get a copy of their credit report and they are unable to receive the report, the cause could be that the credit reporting agency has a mixed or multiple credit file concern about the data.  The credit reporting agencies do not want to release the wrong consumer file about a consumer that did not request the information, so they typically ask for additional identifying information and release no credit file.  Credit reporting agencies do not want to release the wrong credit file containing another consumer’s information because they could be in violation of the FCRA at 15 U.S.C. 1681b, which regulates how consumer reports can be disclosed.

The problem for the consumers that I have seen is that even after providing verifying information regarding their identity, like driver’s license, social security card, or utility bill information, the credit reporting agencies are still not providing a consumer file disclosure as required under the FCRA at 15 U.S.C. 1681g.  Consumers have real problems in this scenario because they are unable to review the information that may be inaccurate and the source of credit denials.  If you have suffered through multiple attempts to obtain a copy of your credit file without receiving the report, I recommend that you talk to a FCRA lawyer about your situation.  Please feel free to contact me for ideas or suggestions to help you resolve your problem.

Inaccurate Credit Reports Because of Mixed Credit Files and Merged Credit Files

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A mixed credit file or a merged credit file occurs when another consumer’s credit information is placed erroneously on your credit report.  Despite the fact that the responsibility for the debt is that of another consumer, a credit reporting agency will attribute that information to your credit report.  This situation can lead to disastrous consequences because the information can cost you a mortgage, a job, or to pay higher interest rates.

As you would expect, both furnishers and credit reporting agencies can be the source of the incorrect credit account that appears on your credit report.  Mixed credit files and merged credit files occur for consumers because of the manner that credit reporting agencies acquire and organize their data.  Originally, furnishers provide information to credit reporting agencies about consumer accounts.  Furnishers provide this data electronically by including identifying information like name, address, and social security number.  If the information provided by the furnisher to the credit reporting agency is incorrect or missing, then the credit reporting agency can match the information to the wrong consumer’s file.  Incorrect file matching occurs because the credit reporting agencies do not maintain one file for each consumer.  The credit reporting agencies maintain pieces of individual data in their records and then associate and match similar data based upon complicated algorithms that are proprietary secrets.  While these algorithms are closely guarded secrets, we know some information about the process through discovery in litigation of mixed and merged credit file cases.  Typically, a nine for nine social security number match is not required to associate one piece of credit information with a particular credit file,  and other criteria like name and address are factors into the decision as to which file to place a credit account.  A name and address alone may be enough for incorrect data to match to your file and cause a completely different credit file to ultimately merge into your credit file as part of the computerized matching process.  Accordingly, people with common names have a higher chance to be the victim of mixed and merged credit files.  Inappropriately merged credit files typically occur when an existing credit file begins to more closely match your credit file with the credit reporting agency. Identity theft victims also can have the identity theif’s actual bad credit merge into the good credit of the victim.

Common mixed credit file and merged credit file causes include:

  1. Transposition errors in social security numbers.
  2. Incorrect name being attributed to a social security number.
  3. Different versions of your name like nicknames and maiden names.
  4. Mismatching information related to Jr., Sr., and III suffixes

Correcting inaccurate credit information as a result of mixed credit files or merged credit files is accomplished in the same manner as any other credit report inaccuracy.  Please review my previous blog post on how to dispute inaccurate information information on your credit report.

If you would like to contact me with any questions, or potential referral to a lawyer in your area, please contact me at 571-313-0412.