Credit Reporting

Lex Loci Feb 2012

Your Most Important Asset Is Intangible

Many folks don’t realize it but their credit rating istheir most important asset. You can’t physically touch, taste, smell, drive it or turn-it-on. It is your credit rating. Unfortunately, most people don’t understand this until it is too late where their ability to obtain the critical credit they need for themselves and their family is severely limited. Without access to credit, millions of Americans are relegated to being classified as the working poor and forced to deal with the predatory lenders and merchants of this world instead of having access to legitimate and traditional sources of credit where the cost is controlled by market forces rather than circumstance.

Maximum Possible Accuracy

All of this begins and ends with what is contained within the pages of one’s credit report. There are three major credit reporting agencies that maintain data on everyone of us. It is estimated by experts that nine out-of ten reports contain an error of some kind. It is, therefore, critical to regularly monitor your credit reports. Fortunately, Congress has made this process easier for us. You can now get your credit reports online annually for FREE from each of the “Big Three” by going online at We, therefore, urge everyone to obtain their reports on, at least, an annual basis.

Maximum Possible Accuracy

The Fair Credit Reporting Act, among other things, requires credit reporting agencies to follow reasonable procedures to assure the maximum possible accuracy of the information they report. It also provides for specific procedures for disputing and correcting any inaccurate or incomplete information reported by credit furnishers. If these procedures are not followed or obeyed any consumer who has been the victim of any such inaccuracy may be entitled to sue and is further eligible for civil damages as provided by law.

After obtaining your report, if you find any inaccurate or incomplete information, you must contact the Credit Reporting Agency reporting that information (NOT THE CREDIT FURNISHER) with what is termed a “dispute” as soon as possible and demand that it investigate. The law requires that the Reporting Agency receiving your dispute contact the furnisher and then report back to you within 30-45 days. When it does it will either make the correction you requested or verify that the information disputed is accurate. In case of the latter if you disagree, you entitled to bring an action against either the credit furnisher, the credit reporting agency or both. In fact, bringing suit after the inaccurate information is improperly verified as accurate may be your only option if you ever hope to correct your report. When making your dispute we strongly recommend that you make it in writing and by certified mail requesting a receipt as opposed to making it online or by phone as a credit reporting agency, as has been known to, will sometimes deny receiving it. The certified mail receipt will, obviously, avoid that issue.

Lastly, a very critical thing to remember whenever making a dispute is that the information reported and disputed must actually be inaccurate. Many consumers mistakenly apply what is referred to as a subjective standard rather than an objective one. By that we mean credit reporting agencies are not obligated to investigate and correct information which is subject to interpretation which requires it to go beyond what you present to it in the way of information or documentation. In other words, the inaccuracy must be subject to objective proof. For example, reporting an account delinquent for more than 7 years is easily subject to objective proof. It is true that once a dispute is communicated by a credit reporting agency to a credit furnisher, regardless of the merit of any such dispute, the credit reporting agency must delete the disputed information if the furnisher does not timely respond. Because of this many consumers and credit repair operations look upon this process as somewhat of a game. This should not be the case where the process is treated as a crapshoot. At least, this office will not dispute any item that we cannot objectively prove to be inaccurate.

Privacy &Protecting Your Confidential Credit Information

To assure privacy of one’s personal and confidential credit information is the other function and purpose of the Fair Credit Reporting Act. This is yet another critical reason for periodically monitoring one’s credit information. Your credit report may be viewed by others ONLY for a limited purpose. The consumer must make certain no one not having a permissible purpose under the Act to view your credit information does so. Impermissible access is the leading cause of identity theft. Monitoring one’s credit information on a regular basis in order to spot suspicious accounts or accesses will, in many instances, help to prevent future aggravation. However, not only must one look for suspicious tradelines in the body of their report, they must carefully review the account inquiry section of each of their reports for any strange or peculiar inquiries or for entities they don’t recognize. Obviously, securing the kind of personal information which allows thieves to more easily access your credit information is paramount as well.

As mentioned, your personal credit information is sacred and can be viewed by others only for limited purposes. When you are applying for an extension of credit a credit grantor is entitled to see how you pay your bills. So is your prospective employer, landlord or insurance company. A creditor who has previously extended you credit where the account is still open, may periodically access your credit information to conduct account reviews. However, that would exclude creditors such as Wells Fargo Home Mortgage who continue to access your credit information after discharging an account in bankruptcy where the account is closed. Godby vs. Wells Fargo.

Ask Steve.