Do I have the right to know what’s in my credit report?

Yes, you do have the right to know what’s in your report, but you have to ask for the information. The consumer reporting company must tell you everything in your report and give you a list of everyone who has requested your report within the past year—or the past two years if the requests were related to employment.

What type of information do consumer reporting companies collect and sell?

Consumer reporting companies collect and sell four basic types of information.

Identification and employment information: Your name, birth date, Social Security number, employer, and spouse’s name are noted routinely. The consumer reporting company also may provide information about your employment history, home ownership, income, and previous address if a creditor asks.
Payment history: Your accounts with different creditors are listed, showing how much credit has been extended and whether you’ve paid on time. Related events, such as the referral of an overdue account to a collection agency may also be noted.
Inquiries: Consumer reporting companies must maintain a record of all creditors who have asked for your credit history within the past year and a record of individuals or businesses that have asked for your credit history for employment purposes for the past two years.
Public record information: Events that are a matter of public record, such as bankruptcies, foreclosures, or tax liens, may appear in your report.

Is there a charge for my credit report?

Under the Free File Disclosure Rule of the Fair and Accurate Credit Transactions Act (FACT Act), each of the nationwide consumer reporting companies (Equifax, Experian, and Transunion) are required to provide you with a free copy of your credit report once every 12 months, if you ask for it.

How do I order my free report?

The three nationwide consumer reporting companies use one website, one toll-free telephone number, and one mailing address for consumers to request their free annual report. To order it, you can:
Click on annualcreditreport.com
Call 1-877-322-8228

Complete the Annual Credit Report Request Form found by clicking ftc.gov/credit.

You are permitted to request all 3 of your free annual reports at once. The law allows you to order one free copy from each of the nationwide consumer reporting companies every 12 months.

What information do I have to provide to get my free report?

You need to provide your name, address, Social Security number, and date of birth. If you have moved in the last two years, you may have to provide your previous address. To maintain the security of your file, each nationwide consumer reporting company may ask you for some information that only you would know, like the amount of your monthly mortgage payment. Each company may ask you for different information because the information each of them has in your file may come from different sources.

Are there other situations where I might be eligible for a free report?

Under federal law, you’re entitled to a free report if a company takes adverse action against you, such as denying your application for credit, insurance, or employment, and you ask for your report within 60 days of receiving notice of the action. The notice will give you the name, address, and phone number of the consumer reporting company. You’re also entitled to one free report a year if you’re unemployed and plan to look for a job within 60 days, if you’re on welfare, or if your report is inaccurate because of fraud, including identity theft. Otherwise, any of the three consumer reporting companies may charge you a fee for another copy of your report within a 12-month period. Equifax: 1-800-685-1111; equifax.com
Experian: 1-888-397-3742; experian.com
TransUnion: 1-800-916-8800; transunion.com

What is the truth about credit repair companies? Can they really do what they say they can do?

Some credit repair companies make some fairly outrageous claims, and some guarantee everything under the sun. You’ve probably seen their billboards and other ads that claim “700 score guaranteed!,” or something of that nature. Can they do that, really? Absolutely not! No credit repair company is so good that it can guarantee a specific outcome. It would be similar a defense lawyer guaranteeing that the jury will find his client innocent. Specific score guarantees or promises to remove huge items like a bankruptcy or lein are a sure sign of credit repair fraud. A satisfaction guarantee, in which the credit repair company offers a refund if certain services aren’t done as promised, is more realistic. While outright credit repair fraud is not nearly as common as it used to be, guarantees such as this are something to be cautious of. State and federal regulations have filtered out many of the companies that have given the business a bad reputation. It’s always best to shop around, and also to check with the Better Business Bureau regarding any complaints against a company.

If the fraudulent companies are mostly gone, why does credit repair still have a negative reputation?

The simple answer is: the credit bureaus. They still unflinchingly deny that accurate information can be removed from a credit report. This contradiction often leaves people wondering who is telling the truth.The truth is that you don’t have to endure bad credit for seven to ten years, as they would have you believe. It is possible to repair your credit within a much shorter time, but that takes knowledge and a great deal of persistence–and usually help from a professional. No matter how you address your credit problems, you should know that in spite of what has happened in the past, thousands of people have sought the help of a legitimate credit repair professional and repaired their credit.

What does the law say about repairing your credit?

Back in the 60′s and 70′s, many consumers were negatively affected by the credit bureaus, whose only purpose was to serve the needs of the credit grantors. People had no way to correct or change their credit information back then. In 1971, Congress enacted the Fair Credit Reporting Act (FCRA) to make sure that the credit bureaus investigate the credit items disputed by consumers. This federal law set the guideline that gave every consumer the right to challenge the accuracy, validity, and verifiability of the credit listings appearing in their consumer credit report. It also required that the credit bureau repair any credit listing if it was inaccurate or could not be verified.

It sounds fairly simple, but why is removal of negative items so difficult?

In order not to lose profits from the credit grantors, the credit bureaus fight consumer disputes with enthusiasm.Their first move is normally to bury the consumer in paperwork including requests for clarification, repeated identification requests, or requests for more information. It can be overwhelming and confusing, and most people give up before they really get anywhere. In fact, the credit bureaus count on it. If a person does finally get a credit report, figure out the confusing tables and coding, write a brilliant dispute, and get it mailed, the bureaus will probably still find some way to disregard it. The system is perfectly designed to discourage the consumer, and it works.
One misconception that many people have when taking on their own credit repair is the idea that the credit bureaus must complete their investigation within a certain time frame, or be forced to remove all disputed information. Some even think they can sue the credit bureaus if they don’t finish the investigation within a certain time frame. This is false. Nobody forces the credit bureaus to do anything. But, if a proper dispute letter is filed along with other proper paperwork, and the credit bureau does end up investigating your dispute, the chances of success are fairly good. This is true regardless of accuracy, which doesn’t have much to do with the deletion of negative items. If the credit bureaus cannot verify an item before completing an investigation, that item will be removed. It comes back to the credit grantor. Many times, the grantor is simply reluctant to take the time to verify the data in the dispute. Credit bureaus are in the business of reporting credit histories, and grantors are not.

How long do the credit bureaus have to respond to a dispute letter when credit repair is attempted?

Under the most recent version of the Fair Credit Reporting Act, the credit bureaus must complete a reinvestigation within 30 days of receiving a dispute letter from the consumer. Credit repair companies will tell clients 45 days to allow time for mailing and processing. Note: Credit bureaus have the right to consider any dispute letter frivolous and irrelevant. They may use this right without having to justify the decision. Consumers have very little recourse against the bureaus even if they don’t finish a reinvestigation in the allotted time. Many people are under the impression that the item must be removed within the 30-day time frame if the negative item can’t be verified, but this isn’t the case. The bureaus can take as long as they like. Many consumers get frustrated by the process, and that’s when it’s time to contact a credit repair professional.

How does a person’s credit score affect their credit worthiness?

Your Credit Score is used by any institution that lends. Finance companies, auto dealerships, and credit card companies all use a model created by Fair Isaac and Co., the company that established credit scoring 40 years ago and still dominates the field today. This score is also known as your FICO score; it’s a snapshot of your personal credit history. Here are the approximate percentages that determine your FICO Score. Credit scores can range between 300 and 870. A person’s credit risk decreases significantly with a high score. 680 or above is a typical score that most institutions will look for, but this varies depending on the loan type. Your score may be taken from all three credit reporting agencies, and your average may be used. A lower score may still get an approval, but be prepared to pay much higher interest rates due to your “risk”. Each bureau has its own version of the rating system with its own name. Equifax is called Beacon, Trans Union is Empirica, and Experian is Experian/Fair Issac. If you’re in the market for a home loan, a credit check will be necessary. You will have two choices if you have negative items: wait 7-10 years and try again, or start the dispute process. This is the point where we can help.

How long does bad credit stay on a report? Can it really start over when it’s an old item?

There is much debate on this issue, especially by the “experts”. Nearly all bad items will be kept on your credit report for a period of 7 years beginning on the date that you were last reported late. This means that if you were late every month from June to December of 2011, that your date of last activity would be on December of 2011. In this case, the item would be due to repair itself in December of 2018.The seven year rule has a few exceptions. Bankruptcies can be reported for 10 years from the date that the bankruptcy was discharged. Liens and judgments may be reported for seven years or until the statute of limitations in that state (usually between seven and ten years) runs out, whichever is longer. The credit bureaus usually keep these listings on a report for seven years, regardless of the local statute of limitations, unless you repair them first. Another exception would be a negative item that has been sent to collections, or has been charged off. The seven year limit begins 180 days after the last late payment before the account was charged off, or sent to collections. An example of this would be: if you didn’t pay a certain bill from January to March, and the creditor sent the account to collections in June, then the negative listing could remain on your report for 7 and 1/2 years from that last payment in March, unless you make an attempt at removal first.