The Fair Credit Billing Act (FCBA) is a 1974 federal law designed to protect consumers from unfair credit billing practices. It lays out consumers’ rights to dispute credit card issuers’ charges (source).
The Fair Credit Reporting Act (FCRA) is a federal law that regulates the collection of consumers’ credit information and access to their credit reports. It was passed in 1970 to address the fairness, accuracy, and privacy of the personal information contained in the files of the credit reporting agencies (source).
Approval of a loan or a credit card application depends on the information in your credit report. What can you do when your credit report contains errors? Below are five steps to correct mistakes in your credit report.
Consumers may obtain a free copy of their consumer report online once every 12 months. To obtain your free copy of your credit report simply go to www.annualcreditreport.com and request your complimentary Equifax, Experian and Trans Union profiles.
They provide an address and phone number as well:
Annual Credit Report Request Service
PO Box 105281 Atlanta GA 30348-5281
Phone: 887-322-8228 (15 day turn around from day of call)
Note: please be careful if you type in the web address as crooks reserved similar site names in the past hoping to intercept private information.
If you have already requested a complimentary credit report during the past 12 months then there is normally a fee to request another copy. There are exceptions under which this fee may be waived. Some of the common exceptions to provide an additional complimentary credit report include:
In addition to the situations listed above, other exceptions could apply to your case. Contact a credit bureau to know if there is any charge, or if you qualify under the law for a free report.
The addresses are as follows:
TransUnion – phone general inquiries 833-395-6938
1561 E. Orangethorpe Avenue
Fullerton, CA 92831-5217
Equifax Information Services, LLC
PO Box 740256
Atlanta GA 30374-0256
Experian, P.O. Box 4500, Allen, TX 75013
Credit Bureau Reports: Paid reports.
When you get your credit report the credit reporting agency may include a pamphlet or similar paperwork explaining how to read their particular format. There are generally five sections as follows:
1. Identification Information
This section usually includes your name, address, social security number, date of birth, former addresses, your employer’s name, your job description and possibly your home phone number.
2. Importance of Credit History in correcting your credit
This section shows various accounts and how timely you paid on them. The Consumer Financial Protection Bureau states about 40% is credit card information, 18% retail credit cards, 13% debt collection accounts, seven percent student loans, seven percent closed end consumer loans (i.e. car loans), seven percent mortgage loans and five percent other loans.
There are two main types of accounts you see under “credit history”.
The first is revolving credit – meaning the minimum amount owed may be definite, but the payment due each month can be variable. This is typical of credit cards.
Second is “installment accounts” – a definite amount due in fixed installments. A mortgage payment is typical of these, also student loans.
Underneath the accounts, it may reflect how and when payments were made on them. The credit bureaus break-down the account if there are late payments to show how many payments are 30, 60, 90 and 120 days past due (and some indicate later past dues of 150 days). Thus (3)(30), (2)(60), (1)(90) means you have paid three times past 30 days, two times past 60 days and once 90 days past the due date. If an account is fairly old, it may state that it is a “charge off”, if you paid it after it was charged off it may state that it is a “paid charge off.”
These accounts are being collected, usually by a collection agency, but sometimes also by companies that buy huge portfolios of charged off debt collect as well as some alleged law firms. Some collection agencies like to operate under the name of a lawyer or law firm to scare consumers by making litigation appear more likely.
4. Inquiry Section
This is a listing of businesses that have either pulled your full credit report, pulled certain information on your report or have “prescreening” your report. The credit card company you applied to, the car dealership that illegally pulled your credit report, the credit bureau pulling your report at your request and others will show as inquiries. Generally if your full credit report was procured, an abbreviated name of the business will appear without initials in front of it. Generally, if a company with which you already have an account pulls your credit report or if a company’s name appears that you have no affiliation with, there is a chance that your name and address were provided to the company as part of a “prescreening” program. “Prescreening” means that a creditor has gone to the credit bureau and asked for a list of addresses of people who meet certain criteria (e.g. mortgage over $300,000 etc.).
Basic concepts: Charge Off
The official policy of the federal banking regulators provides that a delinquent account is to be charged off 180 days after the date of delinquency. 64 Fed. Reg. No. 27, 6655 “Uniform Retail Classification and Account Management Policy”.
Errors In Credit Reports Occur Often: fraud, data entry mistakes, improper merging of information by the CRA to name a few. The errors can be caused by the creditor, the CRA, a thief, or a collection agency, public record etc.
Documents Are Important. Many credit card companies, banks and even credit reporting agencies provide toll free numbers and websites you can use to dispute credit errors. It’s better to document your credit error dispute on paper. However, if you decide to use the phone, follow-up in writing. Acknowledge the conversation (e.g. “this letter is a follow-up to my conversation by phone with your representative named Joe Smith in which we discussed . . .”). Send everything in writing by certified mail and if possible with a return receipt requested form. There are many reasons to write the dispute in addition to or instead of over the phone. Some of these are as follows:
Show Concern. Just the fact that you bothered to collect your thoughts and write formally shows you truly are concerned with the credit errors on your report. If you need the help of an attorney or regulatory agency later, they are more likely to take note of the seriousness with which you regard the matter.
Send Disputes to Credit Reporting Bureaus. It is imperative you send dispute letters directly to the credit reporting agency. This is not only a logical step, to have an action against a company that provides false data to a credit reporting bureau, you must provide the credit reporting bureaus notice and the liability of that furnisher under the Fair Credit Reporting Act depends on their response to the credit dispute it provides to the credit reporting bureau. One of the difficulties in sending disputes to the credit reporting bureaus is they want to accept disputes online. Do your own research on addresses before mailing your letters. The addresses that have worked recently are as follows:
Styles of Credit Disputes. Goal: to make the dispute objective versus strictly “he said/ she said”. With disputes you want to provide the information necessary to have your dispute investigated and convey what is happening to you as a result of the false credit reporting. There are no statutes you need to state in the letter as long as you provide in plain words what you are demanding. Letters that have a lot of statutes sometimes look a little too smart for their own good. If a company has a statutory obligation under the Fair Credit Reporting Act, Fair Debt Collection Practices Act or the Fair Credit Billing Act, giving them the statute isn’t going to affect that obligation as the demand is stated in plain English.
Basics of Contesting Credit Errors. The minimum information is as follows:
Types of Credit Disputes. Credit dispute letters should be tailored to the type of recipient and the sender’s situation. The credit disputes below are just an example and should be a starting point in deciding what to write. There are some companies that sell credit dispute forms. No credit dispute form can possibly be used to solve the many types of errors consumers encounter. Rather than use credit dispute forms, a consumer is better off being providing the information that covers their individual situation. Letters to credit reporting bureaus and furnishers of information should consider the Fair Credit Reporting Act, disputes to collection agencies should take into account the Fair Credit Reporting Act, the Fair Debt Collection Practices Act and possibly the Fair Credit Billing Act and disputes to credit card companies may want to take into account the Fair Credit Billing Act.
Multiple Disputes, Increasing Information Provided. If you send more than one dispute, you should send more information each time you dispute, perhaps providing more detail each time, attaching documents or even providing a declaration if the matter becomes a matter of he said/she said. You should not send the exact same dispute over and over but respond to any claim made or implied. Keep in mind the shifting responsibility – the more information you provide the more the furnisher and reporting agency is supposed to do in the investigation.
Noting Debt As Disputed. An important right you have to improve your credit score is noting a debt as disputed during the credit report dispute process. You have this right under many laws and it has been interpreted as applying to furnishers of credit report information under their obligations to investigate and modify information on a credit report.
If you dispute the debt, you should send the dispute to the company furnishing your information when you are lodging a credit report error dispute. Otherwise, companies that review your reports may assume you agree with what is reported.