Your Credit Rights
Credit reports contain data about where you live, your bill payments, and if you’ve been sued, arrested, or filed for bankruptcy. Credit reporting companies sell the information in your report to companies that want to evaluate your credit. This includes companies you have applied to for credit, apartments and other housing firms, insurance companies you may have applied to and potential employers.
There are several federal laws that govern credit reporting and how consumer credit is handled. The Fair Credit Reporting Act (FCRA) was passed to prevent abuses by credit companies and to create a level playing field for consumers.
Under the FCRA you have the following rights:
1) You have the right to receive a copy of your credit report. The copy of your report must contain all the information in your file at the time of your request.
2) There are 3 consumer reporting companiess Equifax, TransUnion and Experian. They are required to provide one free copy of your credit report each per year. You can get your free yearly credit report for all three of the above companies by going to annualcreditreport.com. You should also check your FICO scores as these are relied upon by many lenders.
3) You are also entitled to a free report if a company takes negative action against you based on a report from one of these credit reporting agencies. You must ask for this report within 60 days of the negative action, which typically is the denial of credit.
4) If you are unemployed and are looking for a job within the next 60 days you are entitled to one free report per year.
5) If you are on welfare you are entitled to a free report per year.
6) If you are the victim of identity theft you are also entitled to a free report.
7) You can also purchase a report from these companies.
8) You have the right to know who requested your report within the past year for credit reasons and for two years for employment reasons.
9 If you are denied based on your credit report you have the right to the name and address of the credit reporting company they contacted.
10) If your credit report is not accurate you have the right to file a dispute with the consumer credit reporting company and the company that provided the erroneous information. Both are obligated to investigate your claim, and responsible for correcting inaccurate or incomplete information in your report
11) If you are not satisfied with the result of the investigation and the erroneous information is not removed you have a right to add a summary explanation to your credit report.
The Fair Debt Collection Practices Act (FDCPA) applies to personal, family, and household debts. The FDCPA prevents debt collectors from engaging in unfair, deceptive and abusive practices.
1) Debt collectors may contact you only between the hours of 8 a.m. and 9 p.m.
2) Debt collectors may not contact you at work if they know your employer disapproves.
3) Debt collectors may not harass, or abuse you.
4) Debt collectors may not lie when collecting debts, such as falsely implying that you have committed a crime.
5) Debt collectors must identify themselves to you on the phone.
6) Debt collectors must stop contacting you if you ask them to do so in writing.
How long do items stay on your credit report?
1) Inquiries - 2 years
2) Late payments - 7 years from the month the late payment was due
3) Charge offs - 7 years from the date of the delinquency plus 180 days
4) Collection Accounts - 7 years
5) Judgements - 7 years or until the statute of limitations has expired whichever is longer
6) Bankruptcy Chapter 7 - 10 years
7) Bankruptcy Chapter 13 - 7 years
8) Tax Liens - no limit
9) Student Loans - no limit
10) Credit application involving a principle loan amount of $150,000 or more - no limit
11) Application for a life insurance policy with a payout of $150,000 or more - no limit
12) Application for employment in a position paying $75,000 per year or more - no limit
The standard method for calculating the seven-year reporting period works like this. Usually, the period runs from the date that the last event took place. This is important to understand. If, for example, you had not paid a debt for 6 years and then decided to send them a payment -- it could reset the clock. If you had done nothing, that same debt would have rolled off your credit report in a year. By sending a payment you now have another 7 years of negative reporting. If you can afford to pay a past debt it is always better to contact the creditor and work out a deal in writing where they agree not to report the debt as new in exchange for payment.
Nobody can remove bad credit marks from your record. As seen above only the passage of time can restore your credit.
There are unscrupulous companies out there which retrieve old debts well past their statute of limitations and well past the 7 year reporting limit. These companies will send you letters telling you they are your new creditor. Even though they have no means to collect this debt, they offer you attractive financing to clear up this debt. What they are hoping is that you make a payment to them. Then!--since you now agree to new credit terms -- you have re-established the debt and it can now be reported on your credit report again. These companies will often report the debt to the credit reporting agencies as a new debt even though this is not a legal thing to do. If you are aware of your credit and catch this and fight it by demanding proof of the debt and an inquiry they will remove it. They do this as a intimidation factor. It is essential that you keep tabs on your credit. All of the credit reporting companies have programs where for a few dollars a month they will keep you updated on all of your credit changes.
Also beware of companies advertising they can negotiate with your creditors and reduce your debt by over 50%. These companies charge very high fees for their "work" and the end result is usually quite minimal for you.
If you want to dispute a credit report, bill or credit denial, write to the appropriate company and send your letter “return receipt requested.” Otherwise you have no proof that you disputed this error. If you dispute a billing error, include your name, account number, the dollar amount in question, and the reason you believe the bill is wrong. Always request written verification of a debt from any creditor. Be sure to keep all your original documents.
Several businesses offer debt repair services. There are no quick answers to repairing bad credit. In addition, there is nothing that a debt repair service can do that you cannot do on your own for free. Check your credit report often, dispute errors that occur and then wait for legitimate negative information to roll off. Disputing correct information that is negative is a technique the credit repair firms employ and is not recommended. Your rights do not include the dispute of accurate information.
This site does not offer nor is it legal advice. This site provides educational and helpful references and is designed for those two purposes only. Should you have any specific questions or concerns, contact a lawyer in your area.
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