The lending industry has many different types of credit scores on the market today. Many different vendors have created them, such as Fair Isaac, the three national repositories, credit grantors, and insurance companies.
G. John Cento began his career as an attorney at the Indianapolis law firm of Katz & Korin, P.C., where he worked with Robert Schuckit. Trans Union was a client first of Schuckit, and then Katz & Korin when Schuckit joined the firm. Cento began representing Trans Union in 2001, and between 2003 and 2005 worked almost exclusively on Trans Union cases. Schuckit then left Katz & Korin in June 2005 to form his own law firm. Cento followed, but he stayed with Schuckit’s new firm for just a month.
A federal lawsuit has been filed against Experian in the United States District Court, Western District of Wisconsin, for merging the credit file of one individual with the credit file of another who share the same first and last name.
While applying for a mortgage, the plaintiff in the above mentioned case discovered that Experian had included no less than twenty-three (23) tradelines (bits of credit information) which did not belong to her on the credit report used to determine her credit worthiness. After being denied the loan, the plaintiff obtained her credit file from Experian. She then contacted an Experian representative by phone to dispute the inaccurate tradelines. The Experian representative confirmed that the tradelines in question belonged to another consumer and promised to have them removed from her credit file.
However, the information contained within the credit reports which Experian provided to the loan officer, is different than the information contained within the consumer report the plaintiff received when she requested her credit report from Experian. This is not uncommon. Rather it’s standard procedure.
The dispute process is critical to ensuring the accuracy of credit reporting, and to protecting the rights of the millions of consumers whose livelihoods, housing, insurance and access to credit depend on accurate reporting.
Identity theft has led to a federal lawsuit being filed against Citibank North America, Inc. (Citibank) and Experian Information Solutions, Inc. (Experian). Both Citibank and Experian are being sued for violating the Fair Credit Reporting Act (FCRA) because they reported fraudulent information (among other things) after it was disputed.
The case involves the plaintiff’s identity being stolen by a relative. The thief used plaintiffs identity to open two credit card accounts with Citibank.
Yesterday the Seventh Circuit Court of Appeals ruled in our favor and against Trans Union's efforts to block us from representing a consumer in a mixed file credit reporting case. Here is a link to the full opinion in Watkins v. Trans Union. In the coming days, we will be posting additional information about that opinion and the six year long saga which lead to this moment. For now, we are very pleased with the majority opinion.
4 Simple Steps on How to Dispute Inaccuracies on Credit Reports
Disputing inaccuracies on a credit report can be a daunting task. Following these step-by-step instructions will aid you in correcting credit reporting errors in the most timely manner possible:
Step 1: Obtain your free credit reports
Obtaining your credit report is the first step in disputing any inaccurate or wrong information which may appear on it. Federal law requires the three national credit reporting agencies, Equifax, Experian, and Trans Union, to provide you with a free credit report every year. Most likely, each of these credit reporting agencies has a credit file on you. Get all three of your credit reports.
NPR - Millions of Americans have medical debt that's hurting their credit. The Consumer Financial Protection Bureau estimated it's as many as 43 million people, according to data released in late 2014.
Now, some relief may be on the way.
Changes in the way credit agencies report and evaluate medical debt are in the works. They should reduce some of the painful financial consequences of having a health care problem.
Starting Sept. 15, the three major credit reporting agencies — Experian, Equifax and TransUnion — will set a 180-day waiting period before including medical debt on a consumer's credit report. The six-month period is intended to ensure there's enough time to resolve disputes with insurers and delays in payment.
The most common issues identified by consumers are problems with incorrect information on their credit reports.
The Consumer Financial Protection Bureau (CFPB) reports that 76 percent of consumers who filed complaints about credit reporting stated that they had incorrect information on their credit reports. The CFPB has handled approximately 185,700 credit reporting complaints since July 21, 2011, making credit reporting the third most-complained-about product. This is important to you because it means that there is a very good change your credit reports have inaccurate information on them. Inaccurate information can lead to increased interest rates, prevent you from getting a mortgage or buying a car, landing a job, or getting a security clearance.
Equifax is being sued for violated in Fair Credit Reporting Act
Earlier this year, Cento Law filed a complaint against Equifax for mixing the credit report of the plaintiff with information belonging to the plaintiff's father.
The plaintiff was first alerted to the mixed credit file when he was eighteen years old. At the time he was living at his parents and working. The alert came when he received a letter that was attached to his paycheck. The letter was from a county auditors office and its purpose was to inform the plaintiff that his wages were going to be garnished due to unpaid property taxes. Eventually the plaintiff learned that the property taxes in question were actually taxes levied against a man that he shared the same name with, his father.
As time went by, plaintiff was able to obtain a loan for a vehicle. He paid his loan on time with the hope of creating good credit. Two years later...
An update on the National Consumer Assistance Plan
On March 8, 2015, Equifax, Experian and TransUnion (CRAs) entered into a settlement agreement with the NY Attorney General along with 31 additional AGs from other states. Upon entering the agreement, the CRAs announced that they would address a number of credit reporting industry problems, including their dispute process and how they handle unpaid medical debt. This agreement is referred to as the National Consumer Assistance Plan.
The credit reporting industry overhaul is taking place nationally over the course of three plus years with 2018 as the deadline to have all changes made. The overhaul will be implemented in three phases (detailed below) to allow the CRAs to update their IT systems and procedures with data furnishers.
To date, changes to websites and other technical tasks have been acomplished. A change to be implemented this September will address the dispute process. The CRAs will be using trained and empowered employees to review the documentation accompanying disputes. And, if a furnisher says its information is correct, the credit reporting agencies must still look into it and resolve the dispute.
In addition, the credit reporting overhaul will require CRAs to wait 180 days before adding any medical debt
Your legal rights under the Fair Credit Reporting Act
According to the FCRA, the credit reporting agencies, Equifax, Experian & Trans Union (also referred to as CRAs) must investigate your dispute. Upon receipt of your dispute, the CRAs have 30 days to complete their investigation and provide you with their findings. The law requires their findings to be accompanied by a free credit report. If their investigation led to the denial of your credit dispute, now is the time to seek legal counsel to enforce your legal rights.
Prior to obtaining legal representation, ensure you have followed the dispute process accordingly. (See step-by-step instructions on Disupting Credit Report Errors here).
A credit report is not the same thing that you get when you ask for your "credit report" directly from the credit reporting agencies, Equifax, Experian and TransUnion or through AnnualCreditReport.com. That document that you get when you go directly to a consumer reporting agency is a document known in the credit reporting industry as a consumer disclosure. The purpose of a consumer disclosure is to comply with the federal law which requires the credit reporting agencies to disclose the contents of your credit file to you when you ask for it. Nor is a credit report something that currently exists at this very moment. Unless it just so happens that right now you are applying for credit, you don't have a credit report. A credit report is something that is created at the moment it is asked for.
At its most basic level, a credit report is simply a report that is...
John Oliver on the Credit Reporting Industry
Earlier this month, HBO's John Oliver of Last Week Tonight did a segment on credit reports. The segment highlights studies which report major problems in the credit reporting industry. The studies reveal that credit reports contain a shocking number of errors. One study found that 25% of consumers had errors in their credit reports. That means that 1 and 4 credit reports have an error. The study further states that 1 and 20 credit reports contain sufficient errors that would make a consumer pay more for a car loan or a mortgage. Credit report errors vary by type and may be serious enough to deny an application for credit, housing or employment.
Inside the database of a credit reporting agency...
To know what a credit file is you must first understand what a database is and how it functions. A database is structured data that is accessible in a variety of ways. There are about a dozen different kinds of databases, and the credit reporting agencies use one of the most common types, a relational database. At the most basic level, a relational database is an electronic database that arranges information into one or more tables with a unique identifier for each row. In a credit reporting agency's database, each row represents a single consumer while each column contains bits of information attributed to the column header (such as Social Security number or date of birth).
Yesterday, the Consumer Financial Protection Bureau (CFPB) released its fourth annual report detailing the complaints received from military servicemembers, veterans and their families. Since the CFPB first started taking complaints in July of 2011, the complaint volume has steadily risen. In 2015, the CFPB received thousands of credit reporting complaints from the military community. The reporting of inaccurate credit information was by far the most complained about followed by complaints about the credit reporting company's investigation process.
The term "credit file" is often used interchangeably with "credit report", but in the credit reporting industry these terms are distinctly different. A credit file is a bit of raw data contained within a database. At any given time, the national consumer reporting agencies maintain hundreds of millions of consumer credit files in their databases. According to some estimates these files relate to approximately 250 million credit active consumers across the United States. This means that many consumers have more than one credit file in a consumer reporting agency's system.
A "credit report" is something that does not currently exist. A credit report is created at the moment that it is asked for. Your credit report might look different today than it will a month from now, and most certainly will look different than it did three months ago. ...