Everyone has credit report problems. It can be an incorrect entry, an account that you paid off that’s mis-marked, an incorrect amount, an incorrect delinquency, or a host of other things. Fortunately, you have protection under the Fair Credit Reporting Act (FCRA). The FCRA is a powerful federal law that governs all credit reporting issues and it governs how Credit Reporting Agencies handle your information. In a nutshell, the FCRA forces these agencies to make sure that your credit records are accurate.
Credit reports can be used for many different things. The most obvious reason is for the extension of credit. You want to buy a house, or a new car? The lender will run a credit check on you to see if you qualify, everyone knows this. Credit reports can also be used for employment purposes by prospective new employers, by landlords when you are looking to lease an apartment, by insurance companies when you apply for insurance, and for other issues. All of these companies/agencies must follow the FCRA. If they turn you down, whether its for insurance, credit, employment…whatever, they must notify you that they turned you down because of what’s in your credit report.This gives you notice of why you were turned down and it also gives you an opportunity to check your credit report to make sure that it is accurate and up to date.
The common misnomer about credit reports is that you can just dispute any account that you think should not be on there and it will simply go away. In reality, you need to have a real basis for your dispute. Not a day goes by where someone doesn’t call my office about Midland Funding or Portfolio Recovery being on their credit report. “I don’t know who they are, why are they on my report?”. Well, it’s because they bought one of your delinquent accounts and are trying to collect on it. “Well, that card is so old its beyond the statute of limitations”. Frankly, so what? The statute of limitations has nothing to do with credit reporting. The statute of limitations for most credit issues/contract issues in Pennsylvania is 4 years. The SOL sets forth the time that they have to sue you on the debt….that is, the time frame that they have to file a lawsuit against you. If that time frame expires, they can continue to report for the remainder of the period. Under the FCRA, a creditor can report a debt for 7.5 years from default. Obviously, that’s 3.5 years beyond the statute of limitations under which they can sue you. So if you file a dispute and say that your account is beyond the SOL, the creditor can respond to your dispute and say that its valid reporting as long as they are within that 7.5 year period.
What happens if you do have an inaccurate mark on your credit report? The first thing that you have to do is file a written dispute with the 3 credit bureaus (Experian, Equifax and Transunion). DO NOT file the dispute online. If you do, you are “opting in” to mandatory arbitration (which means that you may be giving up your right to sue in a court of law). Send the disputes via certified mail, return receipt requested. The 3 credit bureaus will have 30 days to respond to you in writing. If their response indicates that your dispute is correct, they will repair the report accordingly. If their response indicates that you are wrong, then you’ll have to review and re-assess the situation to see what the next step is. If the bureaus have incorrectly denied your dispute you may have a claim against them for damages. In any event, consult with a reputable consumer attorney (hopefully someone from our law firm) before starting the dispute process.
Any questions on credit report issues, please contact our office at 412-823-8003.