Category Archives: Credit Reports

Background Check Errors, Consumer Financial Protection Bureau (CFPB), Credit Report Errors, Credit Reports, Credit Scores, News

Reporting of Collections Tradelines (Part 2)

Posted on by Credit Report Law Group

Read part 1 by clicking here!

While the prevalence and impact of collection debts on credit reports are clear, what’s even more of a concern is how often mistakes are made. And this flawed reporting is having an impact on consumers’ lives.

Currently, there are no accepted or enforceable standards for when or why debt is reported or when the information must be updated.

There’s no enforced requirement that reporting companies confirm the accuracy of information of a collection’s debt before making a report to the credit bureaus. (To be clear, reporting companies are supposed to give the bureaus accurate information, but they only have to correct it after the fact. After the damage has been done.)

Any Amount of Debt can be Reported, No Matter How Small

There’s no minimum required amount for collections accounts to appear on a credit report, so most amounts are for fairly small amounts—85% are for amounts less than $1,000. There is no clear requirement for when reporters update or correct their information. And multiple officials may be chasing the same debt, so one collector may receive the amount in full while others believe the debt is still owed.

Unsurprisingly, this is all leading to mistakes.

Most Common Complaints

Both the Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC) have found that consumers are more likely to complain about collections reporting than any other information on their report.

When consumers complain to the CFPB about collections, 40% of the time, they’re saying that the debt collector has incorrect information or claims on their account. And consumers’ most common complaint is that a debt isn’t even theirs in the first place.

Similarly, in a review of FTC disputes relating to collections accounts, 82% said the debt did not belong to them—a rate of errors that is more than double for other types of tradeline accounts.

The good news is that consumers with wrong information on their credit reports can take action. The FTC also has found that collection tradelines are commonly changed after consumers have initiated formal disputes about their records, and consumers’ credit scores rose after that had happened.

Contact an Experienced NY Credit Repair Attorney

If you have incorrect collection information on your credit report, you have recourse. You can dispute the information. But to do so, contact an attorney who specializes in representing clients like you—a lawyer who can help you repair your record and obtain compensation for any damages you sustained.

Consumer Financial Protection Bureau (CFPB), Credit Report Errors, Credit Reports, Credit Scores, News

Reporting of Collections Tradelines (Part 1)

Posted on by Credit Report Law Group

An estimated 220 million U.S. consumers have at least one credit report maintained by the major credit bureaus of Expedia, Equifax, and TransUnion. And of these millions of consumers, one out of three have what’s known as a “collections tradeline” included in their reports. Yet most Americans may not even know what a tradeline is, let alone be aware of how collections tradelines could be impacting their lives. But impact them they do.

That’s why it’s essential to understand what a tradeline is, how they get on your credit report, and what to do if you have a tradeline on yours.

Collections Tradeline

What is a “collections tradeline”? That’s the industry’s term for debts that have gone unpaid long enough that they are in collections—the original creditor, a third-party debt collector, or a debt purchaser are seeking repayment—and this collection appears on someone’s credit report. Credit agencies consider the presence of a collection tradeline on someone’s credit report as a red flag—an indication that the person won’t pay their debts. So the agencies downgrade their credit score accordingly.

One problem with collection reports is that few companies do report, but if they do, they usually did so at the time only when they began collections proceedings. For example, a debtor may have been successfully making a car payment for years, but their creditor never reported their loan and payment history. Then, the debtor falls behind with a small portion remaining on the loan when it goes into collection. But it’s only the collections that appear on the report.

Therefore, collections tradelines can give a distorted, overly negative view of a debtor’s credit history.

An Incorrect Collections Tradeline Can Harm Your Credit Score

According to a report by the Consumer Financial Protection Bureau (CFPB), if someone with a credit score of 680 has a collections tradeline for a debt of $100 or more, their score will drop at least 40 points. Ironically enough, a collections tradeline is even worse for someone with a higher credit rating. For those with a score of 780—a very good score—their score can drop more than 100 points. And a lower credit score may mean that creditors will charge you higher interest rates on loans. With a low enough score, they may even deny you a loan.

Significantly, a debt that has gone to collections can still appear on your credit report after paying the debt in full. And even a paid collections tradeline can reduce your credit score.

And all this hinges on the credit agencies’ assuming that a collections tradeline is always correct. But that turns out not to be true. Not by a long shot. . .

Read part 2 by clicking here!

Consumer Financial Protection Bureau (CFPB), Credit Report Errors, Credit Reports, Credit Scores, Debt Collection and Harassment, Legislation, News

What Should You Do If You Have Medical Debt on Your Credit Report? (Part 2)

Posted on by Credit Report Law Group

In our last post —if you haven’t read it yet click here for part 1—, we discussed the credit bureaus’ announcement that they are changing how they will include medical debt on consumers’ credit reports. Industry watchers estimate that these changes will eliminate 70% of medical debt reports. But let’s talk about steps you can take to ensure that you’re one of those who will benefit from these changes.

First, request a free credit report and review what your record currently says. Look for any information relating to medical debt, but also keep an eye out for any other out-of-date information or inaccurate reporting (e.g., your credit report contains someone else’s information).

When you review your file, pay attention to even the smallest errors. Mistakes can have a big impact on your credit score.

For example, the Consumer Financial Protection Bureau (CFPB) has said when a credit bureau includes a collections action of more than $100 on your credit report, that can reduce a score of 680 by more than 40 points. And it has even more of an effect on people with higher scores. Those with a score of 780 can see their score drop by more than 100 points!

Additionally, don’t expect entries of debts to disappear once you’ve paid the debt off. Medical debt is frequently sold to third parties for collection, and studies have shown that many collection agencies aren’t good at updating records of other offices or credit bureaus.

If you find any entries related to medical debt, contact your medical provider, the third party you paid, and the bureau to notify them of any medical debt-related error. When submitting your complaint, ask how long it should take before your credit report is updated. Then put a note in your calendar to request a new report soon after that date—to make sure that your record has been updated.

If you have already notified a bureau of the error, but the bureau hasn’t corrected your credit report, you can contact an attorney who specializes in working to get people’s credit restored.

While there are agencies that offer services for credit restoration, recent reports show that the credit bureaus frequently disregard these complaints from these companies. But an attorney can take action to fix your credit report and help you get compensation for damages you might have sustained because your credit report was inaccurate.

If you identify any problems with your credit, including medical debt that should be removed under the new policies, contact an attorney who specializes in representing clients like you—someone who can help you repair your record and obtain the compensation you deserve.

Consumer Financial Protection Bureau (CFPB), Credit Report Errors, Credit Reports, Credit Scores, Debt Collection and Harassment, News

What Should You Do If You Have Medical Debt on Your Credit Report? (Part 1)

Posted on by Credit Report Law Group

According to a recent report by the Consumer Financial Protection Bureau (CFPB), almost one-out-of-every-five consumers has information relating to their medical debt on a credit report. And while medical debt is the most common type of collection information on a consumer’s credit report, medical debts aren’t a good indicator of creditworthiness. Medical debt is usually for much smaller amounts than other types of debt. Seventy-five percent of medical collection debt is for amounts that are less than $490. And these debts often occur because many people get confused about how much they owe and how much their insurance covers. (These people are usually current for other bills.)

In light of data such as these, all three bureaus recently announced they are taking steps to change when and how they report medical debt.

In this and our next post, we will tackle how these changes impact you and what you need to know and do in light of these changes.

How the Credit Bureaus Are Changing Reporting of Medical Debt

First, as of July 1, 2022, the credit bureaus will give you a full year to resolve medical debt before including it on your credit report. Previously, you only had a year to do so.

Second, as of July, once you’ve paid a medical collection debt in full, it should no longer appear on your credit report.

And then, by mid-2023, the credit bureaus will not report medical debt in amounts that are less than $500.

Dealing with Medical Debt

If you have current medical debt, work out a payment plan or other arrangements with your creditor, and recognize you will have a year before any debt hits your report.

As you pay down the debt, keep records of all payments you’ve made; you want to know exactly who you paid and how much you gave them.

Your goal should be to see if you can get the remaining balance that you owe to be an amount less than $500. You have a year to do this, and if you can do it, the debt may never appear on your credit report.

In our next post, we’ll discuss what you should do if a medical debt is already on your credit report.

In the meantime, if there is any information on your credit report that shouldn’t be there, you can get your report corrected. You may even be entitled to damages if your credit report has wrong information. If you have any credit report issues, contact an attorney who specializes in representing clients like you—someone who can help you repair your record and obtain the compensation you deserve.

Read part 2 by clicking here!

Consumer Financial Protection Bureau (CFPB), Credit Reports, Credit Scores, Debt Collection and Harassment, Legislation, News

Credit Bureaus Will No Longer Report Most Medical Debt

Posted on by Credit Report Law Group

In mid-March, all three major credit bureaus—Equifax, Experian, and TransUnion—announced they would no longer include most medical collection debt on people’s credit reports. This is a major change that should have everyone checking their credit reports.

According to the Washington Post, the credit bureaus will be taking steps to change how they report medical debt over the next year. First, as of July 1, they will no longer report about 70% of medical collection debt. And of the debt they do report, they will give people an additional 6-months before reports appear in their records, so they have more time to resolve the issue.

In mid-2023, they will stop including medical debt of less than $500.

The bureaus announced these changes following the recent release of a new report from the Consumer Financial Protection Bureau (CFPB). In that report, the CFPB revealed that half of all debt reports on people’s credit reports are related to collection efforts for medical and hospital bills. And this adverse reporting impacts one-fifth of the 220 million consumers who have at least one credit report with a bureau.

What makes this even worse is that most debts are for small amounts. The median medical debt was $207, a smaller amount than non-medical debt. At the same time, medical debts often arose out of confusion over what insurance was or was not covering. Most medical debtors paid other bills on time.

Then to compound the problem, medical debt is frequently sold to third-party collectors—who are known for harassing debtors but aren’t known for providing consistent or accurate information to the credit bureaus.

The result has been that millions of consumers have been getting lower credit scores, although there is little evidence medical debt accurately suggests if someone is a credit risk.

Given these findings, it is hard to justify including medical debt on credit reports, and it’s heartening to see the bureaus responding.

But this also means consumers should be looking with even more care at their credit bureaus for changes, errors, and other inaccurate reporting.

If you identify any information on your credit report that shouldn’t be there, from errors of your data to someone else’s information in your credit report, contact an attorney who specializes in representing clients like you—someone who can help you repair your record and obtain compensation for any damages you sustained.

Credit Report Errors, Credit Reports, Credit Scores, News

Common Complaints about Credit Bureaus

Posted on by Credit Report Law Group

This past January, the Consumer Financial Protection Bureau (CFPB) issued an annual report analyzing more than 700,000 consumers’ complaints about the three national credit bureaus, Equifax, Experian, and TransUnion. According to the report, “In 2021, the NCRAs reported relief in less than 2% of complaints down from nearly 25% of complaints in 2019.”

The unfortunate takeaway for consumers may be that they can’t expect the bureaus to do the right thing when they have issues with their credit reports. Instead, they need an experienced lawyer on their side to help them fix their credit and gain them the compensation they deserve.

The CFPB found that the most common issue was “incorrect information on your report.” Complaints that other people’s information was included in their credit reports have gone up almost 1,000% in just four years. Of those, most consumers complained about other people’s information on their reports, and they reported having experienced identity theft.

Another cause of consumers’ exasperation was that they were caught between the bureaus and the “furnishers,” who supply the data to the reporting bureaus. The bureaus and furnishers blame each other for errors, and then neither act to correct the information.

The CFPB noted that when consumers were using third-party complaint services, the bureaus discounted these complaints. While federal law allows third parties to represent consumers in these disputes, the bureaus’ automated systems would search for identical complaints, conclude these were from credit repair companies, and then fail to respond.

Consumers also took issue with the complaint process itself. They couldn’t get through automated processes to get real assistance. The bureaus did not respond to their letters. The dispute process was so lengthy, unproductive, and costly, “Some consumers, resigned that they had done everything they could, described living with incorrect information on their credit report.”

However, those making those statements just gave up after filing complaints: They weren’t aware they could take legal action against bureaus that knew their information was wrong but didn’t correct the problem.

If you identify any information on your credit report that shouldn’t be there, from errors of your data to someone else’s information in your credit report, contact an attorney who specializes in representing clients like you—someone who can help you repair your record and obtain compensation for any damages you sustained.

Background Check Errors, Consumer Financial Protection Bureau (CFPB), Credit Report Errors, Credit Reports, Credit Scores, News

Why Aren’t Credit Bureaus More Careful in Vetting Your Records?

Posted on by Credit Report Law Group

Last summer, Consumer Reports asked 5,858 volunteers to ask for their credit report and examine it for any errors. And more than one-third of them did indeed find at least one error on their credit report. And this wasn’t the only time Consumer Reports and others have found such damaging results. And those errors matter; many make people look like bigger credit risks than they actually are.

Common errors in reports include: a failure to update debts as having been paid off, mixed files (when the record included accounts or debt that did not belong to them), and wrong personal information (such as an incorrect address).

If you’ve found errors on your credit report or realize you have a mixed file, you may be wondering: Why are the credit monitors so bad at monitoring your credit? Why don’t they do a better job at vetting the information they receive?

Sources for Credit Reports

The three credit bureaus—Experian, Equifax, and TransUnion—use different sources for their credit reports, which is why your information may be different from one bureau to the other. But generally speaking, they draw data from public filings and court records (such as property ownership records and lawsuits), bank information, credit card companies,

According to a Brookings Institute report, credit bureau errors happen because of the “size, speed, and economic incentives of the system.” When it comes to size and speed, the bureaus maintain more than 200 million credit files, and each month, more than 1 billion pieces of data are updated. And a lot of the data is inaccurate when it comes to the bureaus. For example, there can be errors in the original bill, while debts sold to third-party collectors may not be updated, even when paid in full. And there’s just not enough money to incentivize those supplying the data to provide more accurate records.

Therefore, until the laws change, you—not the credit bureaus—are responsible for checking the accuracy of your credit report. But once you do find errors, you don’t have to fight the credit bureaus on your own. That’s why, if you identify any errors and negative information in your credit report, contact an attorney who specializes in representing clients like you—disputing the errors, repairing your record, and obtaining compensation.

Consumer Financial Protection Bureau (CFPB), Credit Report Errors, Credit Reports, Credit Scores, News

Equifax Free Credit Monitoring Due to the Company’s Data Breach

Posted on by Credit Report Law Group

In 2017, credit bureau Equifax was hacked, and the records of approximately 147 million people were compromised. Unsurprisingly, lawsuits were filed, and, as part of a court settlement, those impacted by the breach were ultimately offered a choice between a one-time payment of $125 or four years of free credit monitoring. It may seem like the height of irony—that the credit bureau will monitor your records to make up for its failure to protect your records. But credit monitoring is always important to your financial wellbeing—and even more so following a data breach—so let’s talk about what impacted individuals should do next.

Was My Data Compromised by the Breach?

If you are not sure if you are one of the impacted individuals, you can find out by checking this dedicated database (which was specifically set up for the settlement). If you are not an impacted individual, know that, until 2026, all U.S. consumers are entitled to a free annual credit report.

What If I Am One of the Impacted People?

If you are one of the impacted individuals, you should have received a letter or an email from the settlement administrator. A real email would come to you from this email address: info@equifaxbreachsettlement.com. The letter or email will give you a code to access your free credit monitoring. You must activate the code by no later than June 27, 2022; the code won’t work after that. (You can also call the administrator at 1-833-759-2982.)

Inspect Your Credit Report

Carefully inspect each entry of your credit report. Even if you don’t see any fraudulent activity on your account, you may discover other errors on your credit report, such as a “mixed file” (when someone else’s record is mistakenly included in your record).

If you find any issues relating to the data breach, you can file a claim for data breach-related expenses you incur after January 23, 2022, such as:

  • Fees for attorneys and accountants to help clear your account
  • Losses from fraudulent charges that made using your data
  • Ancillary expenses (e.g., costs for notaries, postage, phone bills)

No matter what kind of an issue it is, if you identify any negative information in your credit report, contact an attorney who specializes in representing clients like you—repairing your record and obtaining compensation.

Credit Reports, Credit Scores, News

‘Buy Now, Pay Later’ – Why These Programs May Distort Your Credit Score

Posted on by Credit Report Law Group

If you were doing some last-minute holiday shopping online, you might have seen a new option as you chose to purchase your item: Instead of paying the full amount, you could pay a portion at the time of purchase and space the rest over time (often, four payments made every two weeks). But what that quick offer at check-out probably did not explain is that these “easy payment” programs can wreak havoc on your credit score.

Traditional layaway programs didn’t impact someone’s credit score—it was a way of getting credit without a credit check and didn’t impact credit if payments weren’t made. However, Experian does include some “buy now, pay later” purchases in credit reports, while the other two major credit reporting bureaus, Equifax and TransUnion, are taking steps to do so in the coming year.

The real concern here is that these payments could easily distort (and damage) someone’s credit score.

A few small “buy now” purchases could make it appear to credit bureau algorithms as if you have substantially increased the number of vendors you’re indebted to. And credit reporting companies traditionally update their data on a 30-day or longer basis. Thus they don’t update as frequently as these plans require payment.

Therefore, if you opted for a few of these spread-out payments, your credit report could be showing a rapid increase in the number of your debtholders—a red flag for credit scores.

And the bureaus’ delayed updates could make it appear that you owe more money than you actually do since some accounts may not even appear until after you’d already paid them in full.

Either one of these factors is enough to affect a credit score. Combined, they could significantly distort the overall picture of your financial position and result in an inaccurate credit score.

And the more frequently updates need to be made, the greater the likelihood of errors in the credit reports.

In other words, these small, seemingly inconsequential payment plans could have downstream impacts when you’re trying to make a major purchase such as a home or car.

If you are dealing with inaccurate credit scores or other credit issues, contact an attorney who specializes in representing clients like you—repairing your record and obtaining compensation

Background Check Errors, Credit Report Errors, Credit Reports, Mixed Case File, News

Mistaken Identities on a Credit Report: An All-too Common Problem for People with Common Names… (and Those with Unusual Ones, Too….)

Posted on by Credit Report Law Group

In 2014, 38,313 men in the United States shared the name “James Smith.” It’s impossible to know if any of them were related to each other, or the 34,810 Michael Smiths and 34,269 Robert Smiths also walking around. But we can expect that they, and the 32,092 Maria Garcias and 30,507 Maria Rodriguezes, all have one thing in common: At one point or another, they’ve likely told someone, “No, that isn’t me. That’s a different Michael/James/Robert/Maria.”

On an average day, the confusion is probably a petty annoyance. However, if it relates to activity by someone with the same name showing up on a credit report, and is therefore damaging their credit rating, it’s no minor inconvenience: The technical term for this is a “mixed file,” when two consumers’ records are combined. But no matter what you call it, it’s a very common problem—even for people with more unusual names—that can affect someone’s entire life.

But what can you do?

Dispute the Credit Report

Contact each of three credit bureaus,  and request full records that you can review. Then, you can dispute any unknown accounts, and—once they’re removed from your account, in theory, they should no longer impact your credit score.

Contact the Social Security Administration

One of the difficulties in a “mixed file” case is that it’s hard to determine if this is a problem with the credit bureaus’ recordkeeping. So it’s important to contact the Social Security Administration (SSA) to see if your employment records have also been compromised.

Sue the Credit Bureaus

If the Credit Bureaus fail to revise your credit report, you still have options. It’s possible to sue a credit agency for failing to maintain your records correctly. And this is more than just repairing your credit. If your suit is successful, you can get financial compensation, even punitive damages.

No matter what the reason, from a mixed file to identity theft, errors on a credit report can have a serious effect on your life. But you don’t have to go it alone. Instead, contact an attorney who specializes in representing clients like you—to help you repair your credit and obtain the compensation you deserve.