Tag Archives: Northern Virginia credit report lawyer

What procedures should credit furnishers use to determine if credit report information is accurate?

Credit Report Procedures, ,

Data furnishers must conduct a reasonable investigation of a consumer credit dispute after receiving the dispute from the credit reporting agency.  Regulation V details guidelines for furnisher compliance with the FCRA by requiring written procedures for dispute investigations so that the information that the data furnisher provides for a consumer credit report is accurate and has data integrity.  Furnishers typically receive notice of the dispute electronically on an Automated Consumer Data Verification Form (ACDV).  The credit reporting agency sending the ACDV to the data furnisher should properly identify the dispute and attach the consumer’s supporting documentation provided by the consumer.  Court’s interpreting the FCRA have held that a furnisher must conduct a reasonable investigation of the consumer’s dispute by reviewing all relevant information in the form of a detailed and systematic inquiry of the information in the furnishers records.

In order to conduct a reasonable reinvestigation, the data furnisher must establish and follow reasonable procedures.  See Regulation V of the Fair Credit Reporting Act at 12 C.F.R. §1022.42.  Under Regulation V, a data furnisher must establish and implement reasonable written policies and procedures regarding the accuracy and integrity of the information relating to consumers that it furnishes information to a consumer reporting agency.  12 C.F.R, §1022.42(a).  In addition, the furnisher must periodically review and update its procedures as necessary to assure the ability to provide accurate credit information.  12 C.F.R.  §1022.42(c).  Appendix E to Regulation V provides a roadmap of the means to establish and implement specific procedures that result in proper credit report dispute investigations.

The specific procedures identified in Appendix E are an outline for the data furnisher to provide data information with the accuracy and integrity required by the Fair Credit Reporting Act.  Notably the furnisher should establish and implement appropriate internal controls through standard operating procedures including a verification of random samples of credit report information previously provided.  Furnishers should also provide adequate training to staff for compliance with the FCRA as well as provide effective oversight.  In addition, following any mergers or portfolio acquisitions, furnishers must prevent the re-aging of old information, duplicative reporting, or other errors that may affect credit report information accuracy.  Furnishers have specific duties and a grave responsibility to provide fair and accurate information regarding consumers. Only proper dispute investigation procedures in accordance with Appendix E will assure maximum possible accuracy as required by the FCRA.

Consumers believing that they have inaccurate information on their credit report should make a dispute with the credit reporting agency who reports the inaccurate information provided from a credit data furnisher in order to trigger the consumer’s rights under the FCRA.  The credit reporting agency also has a duty to conduct its own investigation including sending notice of the dispute and all relevant information to the data furnisher.  See 15 U.S.C. §1681i.  For information on how to write a good consumer dispute letter, please the previous post. 

How a settled charged off debt should report on your credit report.

Disputing Credit Reports, FAQ, ,

When a consumer pays in full a charged off account the balance should credit report as zero with the appropriate status code, “Paid/closed-was a charge-off.”  If the consumer does not pay the full balance after a charge-off as part of a settlement, the account status code credit reported is “Paid in full for less than the full balance.” 

The credit reporting errors that our office sees most frequently related to paid charge-offs happens when the furnisher continues to report a balance after the consumer has made the settlement payment on the account.  The furnisher will continue to report an amount in the balance status even though it has accepted a settlement payment.  Credit report errors of this nature are particularly  frustrating because the credit report continues to report the past due balance as owed when the consumer has paid and settled the debt.  Consumers are contacting our offices looking for a Northern Virginia credit report lawyer who can assist them in having a settled charged off debt report correctly on their consumer credit report. If you have a credit report error, you should contact me at my office in Reston, Virginia at 571-313-0412.

Consumers often encounter a financial set back, which results in credit cards and loans being charged-off by the original creditor or a bankruptcy.  After an account is charged-off with a past due balance owed, consumers may wish to settle the debt for less than full balance owed as a means of beginning to rebuild their credit and credit file. If you are going to settle a past debt with a creditor or debt collector, I would recommend getting the terms of the settlement in writing prior to making any payments, so the obligations of the parties are clear.  Many creditors will not agree to delete derogatory items from your credit file as part of a settlement, but  they do have an obligation to report the debt accurately on your credit file after you make the settlement payment.  Based upon generally accepted credit reporting guidelines authored by the Consumer Data Industry Association, when an account is paid in full for less than the total amount owed, the creditor should report the current and past due balance as zero with a special notation that the account was paid in full for less than full balance.

Paid charge-off accounts credit reporting inaccurately are similar in nature to inaccuracies related to bankrupt accounts previously discussed.  While previous charge off accounts and bankruptcies are bad credit events in the past, the passage of time allows the consumer to rebuild their credit profile.  When credit report errors persist,  the consumer can never receive the fresh start to their credit that they have earned and should hire an attorney to assist them to recover damages for an inaccurate credit file.