NOTE:  Any time you are asked to give a credit card number to get something free, it is not free.

The Fair Credit Reporting Act (FCRA) allows consumers to obtain three credit reports each year, at no cost; one from each of the three major credit bureaus.  We recommend that everyone check one of their three free reports every four months to effectively monitor your credit throughout the year.

When you find errors on your credit reports and notify the credit bureaus in writing that these items are not correct, they have thirty (30) days, per the FCRA, to respond. Be aware that the credit bureau replies, which include a complete or abbreviated version of your updated credit report, WILL NOT BE FORWARDED.

If you move within a month or so of writing to the credit bureaus, you should notify them via mail or online that you have a different address. Otherwise, you may not receive the updated information about your credit file. OR someone else who now lives at your old address has access to your personal and financial information when your credit report is delivered to that old address.

WHAT TO DO:

Keep track of the dates you contact the credit bureaus to be sure that they do their job in a timely manner as required by law.

Allow for mailing time and mark your calendar for the date by which you should receive the credit bureau replies.  We suggest 6 weeks from when you first mailed your correction request to them.  If you do not receive them by that date, contact the credit bureau immediately to make sure that your information is safe.

Learn about your credit report and scores with a Credit Check-up from us.  For only $100, you get a complete analysis of your current credit report with strategies to make a positive impact on all five parts of your credit scores.  Contact us today to get yours.

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Well, our focus at Complete Credit Services is credit score building through education.  We know that for consumers to get better credit scores, they need to understand how the credit reporting and scoring formulas work.

The Fair Credit Reporting Act, FCRA, and its amendment, the Fair and Accurate Credit Transactions Act, FACTA, are the guiding regulations for consumer credit reporting.  The Federal Trade Commission, FTC, is the regulatory agency that oversees credit bureaus and consumer credit issues.

The FCRA spells out the time limits that certain items can be reported on a consumer’s credit file.  This article provides details on everything on the credit report and the statute of limitations for each.

Today, we are going to talk about negative items such as late payments and charged off accounts. 

A late payment on the credit report, whether it is a 30 day, 60 day, 90 day or 120+ day late payment, can only be reported for seven years from that date.  For instance, a 30 day late payment from October 2002 will come off in October 2009. 
NOTE: The credit bureaus often remove it the month before to assure compliance with the FCRA.  In the example above, the 30 day late from October 2002 could come off in September 2009.

An account that was “charged-off” usually shows several months of consecutive late payments leading up to the company writing it off as uncollectable debt and reporting it to the credit bureaus as a charge off.  Those individual late payments will come off at their respective seven year limit.  However, a delinquent account placed for collection or charged off can remain on the credit report for 7.5 years.  Section 605c of the FCRA states that the seven year reporting period for these accounts begins 180 days after the first delinquency that led to the charge off.
BOTTOM LINE: collections and charge-offs come off the credit report  7 1/2 years after the first delinquency that led to the charge off or collection.

NOTE: The “date opened” on collection accounts is NOT necessarily, and is usually not, the date to use for determining the reporting period. 

Judgments can stay on the credit report for seven years from the date the judgment was FILED, or until the governing statute of limitations has expired, whichever is longer.  Example: a judgment filed in January 2003 will come off in January 2010 unless the state regulations allow it to come off sooner.

Paid tax liens come off the credit report seven years from the date they were paid.   Example: a tax lien filed in February 2000 that was paid in December 2002 will come off the credit file in December 2009.

WHAT TO DO
Check your credit reports regularly.  Look at the dates of any negative items.  Mark your calendar or planner with the dates of those items coming off in the next year.
NOTE: Some of the credit reports list the estimated date of removal for the negative items.

Write to each of the three credit bureaus near the end of the month that the negative item is to be removed.  List the account name, account number, the item to be remove and what you want them to do. 
Example: Capital One, #1234567891011121: late payment past reporting limits – DELETE.

Look over the updated credit reports that you receive from the credit bureaus in response to your correction letter.  Make sure the item came off and check for any other errors that may be on there.
NOTE: these reports do NOT count toward your free annual reports.

To answer our original question: Is 7 years really 7 years?  YES.  The negative item such as a late payment must come off your credit report seven years from the time it happened.  It should NOT take 2-3 months for it to be removed, it should be gone by the end of the month it originally happened in.  If an item is still on your credit report 2-3 months after the seven year reporting limit expired, it is a violation of your consumer rights per the FCRA.  Reminding the credit bureaus of that fact in the correction letter usually expedites the removal process.

Thanks, KD, for a great question and inspiration for this article!

We work with people all across the US and Canada who have questions and need assistance with their credit report corrections.  Contact us today for your personalized credit building services.

However, the FCRA also provides the credit reporting agencies (credit bureaus) with a way out.  Section 611(a)(3) says the credit reporting agencies (CRAs) can determine that a consumer dispute is "frivolous or irrelevant".  This means they can label your correction request as "frivolous" and take no further action on it.

Yes, really.

Over the past seven years, we've had clients come to us after trying to correct their credit reports and getting the 'frivolous' turn down.  It seems to happen from repeated requests with no supporting documentation or evidence.  It also can happen when some "credit repair" companies bombard the CRAs with the same letters and deletion requests from the consumer in a bi-weekly or monthly campaign. 

The FCRA does not state what determines "frivolous or irrelevant" status.  It does say that the CRAs must "…reasonably determine that the dispute by the consumer is frivolous or irrelevant, including by reason of a failure to provide sufficient information to investigate the disputed information."

So the only reason we know about in this determination process is not providing any proof or reasons why we think something is not correct on our credit file.

WHAT TO DO
1) Include your full name, current address, date of birth (DOB) and social security number (SSN) on the letter.  Attach a clear copy of your driver's license with the current address on it and a clear copy of your social security card.  This prevents a delay in your dispute investigation due to lack of proof of who you are.

2) Keep it courteous and professional.  Demanding, threatening, all caps, all bold, lots of exclamations and curse words will not help your cause.  Simply list the name of the company reporting the error, the account number as it appears on the credit report, why it is incorrect, and that you want it removed.

3) Attach copies of any supporting documents you have for your claim.  If an account shows a balance due and you paid it off, send in a copy of the cancelled check or the company's statement showing the payment.  If there is a collection listed for something you paid off to the original company, send in copies of the proof of payment. 

4) If an account shows up that you never had, send a letter to the company reporting it and ask them to do an investigation with your complete name, DOB and SSN.  If they reply that it is NOT your account, include a copy of that letter with your disputes to the CRAs. 

5) Send the correction requests to all three credit bureaus, even if you only reviewed one report.  This way, you make sure all of your credit files are accurate and will get updated reports from all three in response to your letters.   Save copies of the letters in a file marked Credit Reports.

6) Mark your calendar for six weeks from the date you sent the letters to the credit bureaus.  By law, they must respond within 30 days so you allow a week on each end for mailing time. 
NOTE: They have 45 days to respond if the dispute is from the consumers no-cost annual credit report.

If they do not respond within that time frame, the consumer can assume that the inaccuracies on the credit report must have not been verified and therefore they must be deleted from the credit report.  The consumer needs to follow up and be sure the CRAs reply in the time frame allowed by law.

Be credit wise, avoid the frivolous dispute.  Follow the steps above as you work toward accuracy on your credit reports.  When you need a credit consultant for further action, we're here and ready to help. 

The Fair Credit Reporting Act (FCRA) allows consumers to obtain three credit reports each year at no cost, one from each of the three major credit bureaus.  The true, FCRA mandated site is www.annualcreditreport.com.  You can see the Federal Trade Commission’s video here.
NOTE: The singing pirates and freecreditreport.com are NOT your true, no-cost credit reports from the FCRA.

When you find items that are not correct or that you don’t recognize, you can send a dispute letter to the credit bureaus. These tips can help your disputes be more effective.

1) If you find a mistake on one credit report, send the correction and dispute letter to all three bureaus.  Many companies report to all three bureaus and disputing with all three provides the opportunity for thorough corrections without having to get all three of your reports at one time.

2) Using a paper letter to requestion corrections rather than doing it online allows you to send in documents that support your dispute.  Send in copies, NOT ORIGINALS, of receipts, statements or letters showing the item is inaccurate on your credit report.

3) Send a clear copy of your driver’s license and social security card with your dispute letter.  Be sure your current address is on your license or include a copy of a recent utility bill with your name and address.  This reduces the chance that you’ll receive a Proof of Identity request from the credit bureaus which can delay the correction process.

4) Keep copies of the letters you send to the bureaus.  You want to have proof of a dated letter that was sent to them showing which items were disputed and why.

5) Mark your calendar for 45 days from the time you mail the dispute letters.  The credit bureaus have thirty (30) days by law to respond per the FCRA; when you are disputing something on a report obtained from annualcreditreport.com, the bureaus have 45 days.  Allowing the full 45 days takes into account mailing time on both ends. 

6) The credit bureau replies, which are a complete or partial version of your credit report, WILL NOT BE FORWARDED to another address.  If you move within a month or so of writing to the credit bureaus, you may want to notify them via mail or online that you have a different address.  Otherwise, you may not receive the updated information about your credit file.  OR someone else who now lives at your old address has access to your personal and financial information.

7) Check the fine print on the credit report reply you get back.  If it is not the full report, you may be able to log in to the credit bureau’s website using the report number to view and print the complete report.

8.) If you do not receive a reply back from all three bureaus within 60 days, your rights under the FCRA provide that the items must be removed from your file as they were not able to be verified .  You can send a follow up letter to the credit bureau that did not respond to request this removal.

Taking control of your credit can be a very positive move for your financial future.  When you need professional assistance in your credit building process, contact us for effective, one-on-one consulting. 

You can also get two of your reports and actual FICO scores, the scores most lenders use, at FICO’s own site.  Because they are celebrating their 8th anniversary, you can save 30% on your scores!  That takes the price for each one from $16 to just over $11, saving you almost $10 and giving you the opportunity to review your TransUnion and Equifax credit reports along with finding out your FICO scores. 

NOTE: The 30% offer is available until March 31st.  The code to use is: myFICOis8

CHECK FOR ERRORS
When reviewing your credit reports, check for these common errors:
1) Accounts that you don’t recognize as yours.

2) Closed accounts that still show a balance due.

3) Late payments reported after the date the account was closed.

4) Collection accounts listed for paid off items or without identifying information.

5) Accounts that were included in a bankruptcy that still show a balance due.

6) Extra or incorrect Social Security Number.

7) Incorrect birth date and/or different names, or incorrect middle initial.

8.) Addresses listed as yours for cities or states you have never lived in.

NOTE: Click here for a list of how long items can stay on your credit report.

CORRECT THE ERRORS
Your consumer rights under the FCRA allow you to contact all of the credit bureaus to request correction and/or deletion of the inaccurate items listed in your credit file.  The report itself should have contact information and correction instructions or you can get info on all three credit bureaus here.

Some items can be corrected through the online dispute process.  However, if you have documentation to submit such as receipts proving an account was paid off or proof of your social security number, you may need to file a written dispute to include your documents.

When you find an error on one report, you should submit the written correction request to all three credit bureaus just to cover all the bases.  Include all correction requests at one time, in one letter; it is okay to have several items on the page you are sending to the bureaus.  Keep a copy of the letters and note the date you mailed them.  Don’t send original documents and receipts, only copies.

When they respond to your dispute letter, which can take up to 30 days plus mailing time, you should receive an updated credit report.  Review the entire report, not just the accounts that you requested correction on.  If you find additional errors, send in another letter to correct them. 

You have the right to accurate credit reports and because your credit scores are calculated using the information compiled in your credit file, you want to be sure it is as accurate as it can be.

Checking your credit report and correcting errors is imperative to your Personal Financial Fitness.  Getting better credit scores can provide you with money savings through lower interest rates, lower insurance rates, and giving you more financial options.  Knowing your scores now can help you effectively reach your goals.

For a personal Credit Analysis or One-on-One Consulting services, contact us today.

What isn’t as widely known is that FACTA also allows you to get copies of Specialty Reports that are made to banks, landlords, employers, and insurers.  The companies that compile these specialty reports are considered consumer reporting agencies under the FCRA; Congress has designated the companies that compile consumer reports for purposes other than credit as “nationwide specialty consumer reporting agencies”.

TYPES OF SPECIALTY REPORTS
There are several different specialty reports, including reports for:
Check Writing History
Medical Conditions
Employment Background Checks
Residential or Tenant History
Homeowner and Auto Insurance Claims

WHY CHECK SPECIALTY REPORTS
Checking all of your information stored with the consumer reporting agencies allows you to detect inaccuracies that could result in the denial of financial accounts, employment, or other items.  Inaccuracies can also indicate fraud or identity theft.

Here are some situations and recommendations for ordering your specific reports:
- Having checks fraudulently cashed on your account – order ChexSystems report.
- Employer asks to run a background check – find out which company they use and order a copy of the report.
- Applying for private health, life or disability insurance – order your Medical Information Bureau report.
- Shopping for homeowner’s or automobile insurance – order your CLUE or A-Plus claims report.

HOW TO ORDER YOUR REPORTS
There is an excellent fact sheet with details and links on how to order your specialty reports from the Privacy Rights Clearinghouse.  Keep in mind that ordering all of your reports at once can be very time-consuming.  Check the list of recommendations and determine which reports fit your current situation the most.  At the very least, you should consider getting one of the overall reports recommended in section 12.8 of the article.

There is no cost for these reports; FACTA gives consumers the right to one free file disclosure per year from each of the nationwide specialty consumer reporting agencies.  Be sure to keep track of which ones you order and include monitoring them in your annual scheduling. 
NOTE: You have the right to dispute any errors on these specialty file disclosures just as you have the right to dispute inaccuracies on your three credit reports.

SUMMARY
Your credit building plan is an important part of Personal Financial Fitness.  Being aware of ALL of the reports that contain your information and developing a system to check them on a regular basis puts you much further ahead of the game.  Contact us today for your Credit Analysis.

In the U.S. the FICO score is used by the majority of financial institutions.  It was created in the 1950s by the Fair Isaacs Corporation and ranges from 300 to 850.  Generally, the higher the score, the more financial options a consumer has.

FICO has specific formulas for different industries: mortgage, auto and consumer credit.  They have slight variations in the calculations but are all FICO scores. 

Additionally, each of the three credit bureaus has its own FICO version.

Equifax: Beacon, Beacon 5.0, Beacon 96, and Pinnacle

TransUnion: Empirica, Empirica Auto 95, Precision Score, and Precision 03

Experian: Fair Isaac Risk Score, FICO and FICO II

There are many other scoring formulas available, including the ones created by the three major credit bureaus to compete with the FICO formula.  However, they are NOT exactly the same.

NON FICO CREDIT SCORES

These consumer credit scores are not actual FICO scores:

CE – Community Empower

Credit Expert

Credit Secure from American Express 

National Risk Score

NextGen

Plus Score

Vantage Score

When you monitor your credit with your free credit reports from that you are entitled to under FACTA, the amendment to the Fair Credit Reporting Act (FCRA), you will be given the opportunity to purchase a credit score at that time. The FCRA allows the credit bureaus to charge for a credit score and they certainly want to sell you one while you are getting your free report.  These are usually NOT a true FICO score.

HOW TO GET YOUR REAL FICO SCORES

The third link at top right side of this page takes you to the Fair Isaacs website, which offers all three FICO scores with the three credit reports for under $50 in the “Credit Complete Package”.  You can save 20% until January 31, 2009 by using the discount code “FICO 2009”.

Some credit card companies and banks offer their customers access to their own FICO scores.  Check with your financial institutions to see if they offer this free service and if so, use it.  

Finally, remember that checking your own scores does NOT count against your credit rating.  It makes sense to know your scores and grow them as much as possible before you need them.  Become credit-wise to help get better credit scores and give yourself as many financial advantages as possible.

The Fair Credit Reporting Act (FCRA) states “…that the consumer has the right to add a statement to the consumer’s file disputing the accuracy or completement of the information;”.  The credit bureaus will gladly insert this and it does indeed show up on your credit report.

However, it generally does NOT help your credit rating and has absolutely nothing to do with your credit scores.  It may, in fact, signal that you are resigned to accept the reporting as it is and will go no further in protesting it other than the few lines in the Consumer Statement.  Now, sometimes a lender will actually look over the entire credit report, see your words of explanation and pursue a loan approval anyway.  But most of the time they just check your scores for minimum qualification and ignore the rest of the credit report.

BOTTOM LINE
Don’t bother with a Consumer Statement on your credit report.  If you know something in your credit file is not correct, keep trying to get it corrected.  You can contact the original company for documentation, request validation from  collection agencies related to the account, and check your own records for something to back up your claim. 

Be sure to send in some new documents or reasons when you contact the credit bureaus so that they do not determine that your dispute is “frivolous”, which gives them a reason to stop investigating the matter and leave it as it is. Yes, this is really written into the FCRA, conveniently providing an out for the credit reporting agencies. 

Knowing your consumer rights and how to use them to your advantage is the first step to getting better credit scores and more financial options for your future.  We provide detailed strategies on how to improve your credit rating with an in-depth Credit Analysis for only $100 - get yours today.

WHO
If you are a cable subscriber using any of the cable company’s boxes, print and keep this article for future reference.

WHEN
When you cancel the cable service, because you are moving or switching, they usually require you to return their equipment.  Don’t leave it in the home or apartment.  Don’t leave it with the landlord or a family member to turn in later.  Turn it in as close to the last day of service as possible.

WHERE
Go to the cable company’s office to turn in the box and any other equipment.  Take a copy of your statement and account number with you to assure proper credit to your account.

WHAT
Get a receipt for the box.  Something in writing on their letterhead showing the date, your name and account number, the make, model number and/or serial number for the equipment you are returning, and an employee’s or manager’s signature. 

If you are also giving them money for your final bill, get a written receipt showing all of the same information listed above, PLUS the words “paid in full, zero balance due”.  Keep these receipts in a secure place at home or in a box with important papers during the move.

HOW THIS HELPS
In the event that an error occurs and the cable company does not properly credit your account with the returned equipment, you might find a collection account on your credit report a few months or years down the road. 
NOTE: By monitoring your credit three times a year as we recommend, it is unlikely to go undiscovered on your credit reports for a few years.

You can mail a dispute letter to the collection agency reporting the account on your report.  Their name and address should be on your credit report.  Be sure to use the collection account number from your report and send a copy of the receipt showing the cable box return, telling them that you do not agree with this alleged bill and owe them nothing.  Request that this inaccurate account be removed from your credit file.  Per the Fair Credit Reporting Act (FCRA), they must respond to your letter within 30 days of receiving it.  Mark your calendar for 35 days from the day you send it. 

Their reply should show that you do not owe the money and may even state that they are contacting the credit bureaus to have it removed.  Make three copies of their letter and send one to each of the three credit bureaus with your letter disputing the collection account and requesting that it be removed from your file.  Be sure to send each bureau a copy of the original receipt for turning in the cable box, too. 

If the collection agency does not reply by the 35th day you marked on your calendar, that indicates that the account cannot be validated and should be removed from your credit reports.  Send each of the three credit bureaus a copy of the original receipt and the collection agency letter telling them that this account is not accurate and was not verified by the company reporting it, therefore it must be removed from your credit report.

Mark your calendar again for another 35 days from the time you mail these letters as the credit bureaus are required by law to respond to your dispute within 30 days after receiving your letter.  If they do not reply, they are in violation of your consumer rights under the FCRA and you can file a complaint with them and the Federal Trade Commission.

By taking a few minutes to get a written receipt for turning in your cable box, you can save yourself countless hours of time and frustration later, in addition to the money saved by not having to pay for something you already took care of but have no proof.  Plus, the lower interest rates you can get with higher credit scores will put more money your pocket, too.

NOTE: There are many imposter websites as well as companies that advertise “free” credit reports.  Most of these are for-profit operations that require you to sign up for one of their services, usually with a 30-day trial period, to get your “free” report.  These are NOT your actual free reports allowed by law.

The FCRA gives every consumer the right to a copy of their credit file from EACH of the three credit bureaus annually.  That is actually THREE FREE reports per year.  You can obtain one free report every four months to effectively monitor your credit throughtout the year.

OTHER FREE REPORTS
If you apply for a loan, credit card or insurance and are turned down, you are entitled to a free credit report from the credit bureau that provided the information to the company that denied your application.  The company is required by law to send you a letter with the details on why you were denied along with the instructions on how to obtain the free report.  You have 60 days after you receive the notification to request your free report.

If you are unemployed and plan to look for a job in the next 60 days, you can state that in a letter to the credit bureaus and get a free credit report from each of them.

If you are on public assistance or welfare, you can also send a letter requesting your free report.

If you believe there is fraudulent information or activity associated with your credit report, you can place a fraud alert with all three credit bureaus and get a free report from each to assess the accuracy of your file. 

You can help your credit scores grow by checking your credit reports regularly and correcting any errors. 
Increase your Financial Fitness with a Credit Check Up and get strategies to help each part of your score.