Category Archives: Credit Scores

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

Understanding Section 611(e) of the Fair Credit Reporting Act

Posted on by Credit Report Law Group

If you’re one of the hundreds of thousands of American consumers frustrated by problems with their credit reports—maintained by one of the nation’s three largest credit bureaus, Experian, Equifax, and TransUnion—you may wonder if there’s anything you can do. But there are ways to repair your credit. Let’s briefly look at one such tool: Section 611(e) of the Fair Credit Reporting Act (FCRA).

Under FCRA’s section 611(e), the Consumer Financial Protection Bureau (CFPB) collect complaints from consumers who have issues with their credit reports. If a consumer says they’ve already tried to fix the problem on their own, that is a “covered complaint” (i.e., it is covered under the law), and CFPB must forward covered complaints to the bureaus.

Once CFPB has forwarded a complaint to a credit bureau, the credit bureau must confirm that it has fulfilled all of the statutory requirements relating to the consumer’s record. Then the bureau reports its findings back to the CFPB. Since the bureau cannot ignore the complaint and must examine the file, a report to CFPB is effectively a way to escalate a consumer’s complaint.

More than 80% of all complaints received by CFPB are covered complaints. And the FRCA also requires the CFPB to compile an annual report analyzing these complaints to see if it can identify any trends within the bureaus’ practices.

Crucially, for each covered complaint, CFPB asks the bureau to confirm whether the consumer really did previously submit a dispute directly to the bureau. And through CFPB’s recent analysis of its received complaints, CFPB did indeed make a major discovery: The bureaus confirmed that they had received consumers’ disputes—but many of the complaints had come from “credit repair agencies.” The bureaus consider these complaints unreliable, so they disregard them and don’t take any action.

That’s why you need a credit attorney to help you. With an attorney preparing your complaint, it’s more likely that the bureaus will take action to correct your file. And if they don’t, a lawyer can help you obtain compensation for any damages you sustained.

If you have problems with your credit report, contact an attorney who specializes in representing clients like you. Don’t wait. Call today.

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

Common Customer Complaints about Credit Reporting Bureaus (Part 2)

Posted on by Credit Report Law Group

In our last post (click here to read part 1), we looked at the dramatic increase in consumers’ complaints against the national credit bureaus, Experian, Equifax, and TransUnion. But, of course, we need to do more than know the number of complaints we need to pay attention to. We also want to examine the types of problems that consumers are reporting.

Consumers’ most common complaint is that there is wrong information—information about another person—on their credit reports. While this has been a frequent complaint for years, the number of such complaints has risen. Consumers complained about this more than 400,000 times in 2020.

While incorrect information on a report can be the result of a “mixed file,” when two people’s files are combined (often because they share a common name), in 2020, most people said they were victims of identity theft, and that was the reason for the incorrect information. This isn’t surprising, given the rise of identity theft-related crime. Still, it’s a particular concern because, according to the Consumer Financial Protection Bureau, victims of identity theft frequently deal with its repercussions long after the crime occurred. Ten percent still have related problems even a year after the fact.

Other common complaints include:

  • incorrect account status (e.g., debt is not shown as paid off)
  • personal information is incorrect
  • the credit bureau’s investigation did not resolve an error on a report
  • the credit bureau did not notify the consumer of the investigation’s result
  • the credit bureau investigation was not completed within 30 days

The bottom line is that if you’re having problems with your credit report and have unsuccessfully tried to resolve the situation, you’re not alone. So don’t wait. Contact an attorney who represents clients like you—a lawyer who can help you repair your record and obtain compensation for any damages you sustained.

Credit Report Errors, Credit Reports, Credit Scores, Identity Theft, News

Data Breaches and Protecting Against Identity Theft

Posted on by Credit Report Law Group

On August 17th 2021 the mobile phone company T-Mobile revealed that they had discovered a cyberattack had exposed certain personal information of around 7.8 million current customers, and information about around 40 million former customers to bad actors.

The data included names, dates of birth, social security, and driver’s license or identification information. Financial, credit card, and payment information however was not a part of this breach.

Large-scale data breaches have become all too common and frequent in an internet-focused world where nearly every individual creates personal accounts and provides information to numerous companies, both large and small. What effect can these breaches have on your credit identity and credit score and how can you protect yourself?

Risks of Data Breaches

Data breaches occur when hackers or internet “phishers” gain unauthorized access to private data through technological attacks or social engineering. For example, a bad actor could email an administrator of customer information pretending to be a manager at a company in order to log into that company’s online systems or gather confidential information. The risk that this creates for individuals is that the stolen data can then be sold in places like the dark web so that other bad actors can use that data to try to make purchases for themselves or to open illegitimate lines of credit.

Fighting Back – Monitoring Credit Reports, Credit Freezes, and other Protections

Ordinary people have tools at their disposal to protect themselves. The first is monitoring your credit reports and your credit score. The big three credit reporting agencies currently allow you to request a credit report for free up to once per week. By regularly checking on your reports you will be able to spot newly opened credit accounts or hard credit checks right away and then take action. Another tool is credit freezing – credit reporting agencies allow you to freeze your credit which will stop new credit accounts from being opened in your name. This can be done when you suspect someone else has been using your identity or information to stop any further harm. The freeze can be lifted when you are ready to open a new account yourself.

Large companies also often offer free credit monitoring services and identity theft protection for a certain period to customers affected by a breach, which you should pursue if your data is leaked. Finally, consumers can reduce the risk of information being leaked by following some basic data security principles like using unique passwords and creating accounts only with trusted companies. By using these free tools and methods you can feel more secure that when breaches happen, you can respond and take back control of your information.

Background Check Errors, Credit Report Errors, Credit Reports, Credit Scores, Identity Theft, Mixed Case File, News

Consumer Reporting Complaints (Part 2)

Posted on by Credit Report Law Group

Read part 1 by clicking here!

From January 2020 to September 2021, CFPB received more than 700,000 consumer complaints about Experian, TransUnion, and Equifax—the national credit reporting agencies (NCRAs). But the number of successfully resolved complaints dropped to just 5%. Why? According to a recent report by the Consumer Financial Protection Bureau (CFPB), one reason for that is, unfortunately, many people rely on commercial “credit repair” companies to file their complaints.

This is unfortunate because the CFPB receives thousands of complaints about these “credit repair firms,” too.

While consumers have real concerns (for example, identity theft or a mixed file), credit repair companies often file meritless complaints on their behalf. These firms frequently rely on mass-produced templates and dispute irrelevant facts. As we explained in our previous post, by law, the NCRAs don’t have to investigate frivolous complaints, so NCRA computers quickly identify and disregard these form complaints.

Problems such as these are so common that CFPB and other federal agencies are suing many “credit repair” companies for violation of federal laws. Issues with these purported credit repair companies include:

  • Charging consumers illegal fees
  • operating in bad faith
  • misleading consumers, and
  • defrauding their clients

The wrongdoing of these companies is so pervasive that the NCRAs say dealing with their bogus reports is hurting their ability to address legitimate complaints.

While it will probably take an act of Congress to repair the damage being done by duplicitous credit repair companies, individual consumers should walk away with two key insights from this report:

First, individuals have the right to dispute problems with their credit report—correcting their record and even receiving financial compensation for errors

But a cheap, quick form complaint is too easy for a credit bureau to disregard—and that includes a complaint filed by a credit repair company. All too often, these companies aren’t the experts they claim to be.

That’s why consumers struggling with problems in their credit reports should consult with an attorney. An attorney will evaluate their claim and prepare a solid complaint that the NCRAs must investigate and respond to.

If you have issues with your credit report and the credit bureaus aren’t taking action to address your complaints, that isn’t the end of it. You have recourse. But you need to file a complaint that the NCRA can’t dismiss. To do that, contact an attorney. Our firm specializes in repairing clients’ credit records and obtaining compensation for damages they have sustained. We specialize in helping clients like you.

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.