Fix Of Credit Report Errors Easier
The often frustrating task of correcting an inaccurate credit report will soon be a bit easier, thanks to changes in the Fair Credit Reporting Act.
The changes, effective Oct. 1, won’t transform the process into a walk in the park. But they will give consumers more ammunition in forcing the credit reporting companies, and the creditors who report to them, to get their information right.
“Mistakes in credit reports were the leading consumer problem in the early 1990s,” said Ed Mierzwinski of the United States Public Interest Research Group. “Thirty-three percent of all credit reports, in our view, contained then - could still contain now - serious errors.”
Credit reporting companies already had made many of these changes, in some cases after states or the Federal Trade Commission accused them of violating the law.
Of the troika of big reporting companies, Experian and Equifax Credit Information Services are operating under consent decrees with the Federal Trade Commission. The third, Trans Union Corp., is still negotiating.
Among the changes:
Current or potential employers have to tell employees or job applications if they will use a credit report in deciding whether to hire or promote. They must give applicants the chance to discuss any problems in their report before acting on it.
Consumers have the right to opt out of receiving pre-approved credit offers in the mail.
Nationwide credit reporting companies must provide a toll-free number for consumer complaints and inquiries. They must complete an investigation of disputed items in a consumer’s file within 30 days. Within those 30 days, they have five business days to notify the source of the information that is under dispute, and five business days to remove or correct inaccurate information.
Companies that report inaccurate information will be liable. The amendments allow consumers to sue under the Fair Credit Reporting Act against lenders that knowingly allow false information to remain in a file.
The amendments limit access to credit files to people who have a legitimate reason to see them, such as a creditor, insurer, employer, landlord or other business that extends credit.
Credit reporting companies can charge no more than $8 for a credit report, except in the six states that require them to offer one free report per year to each applicant. The Big Three companies each charge $8, or $16 for a joint report. Experian used to offer free reports but stopped last spring.
Some people can get a free report anyway, including those who have been denied credit, fraud victims, welfare recipients, or unemployed people looking for a job.
The amendments also crack down on so-called “credit repair organizations,” which advertise that, for a fee, they will correct inaccurate reports or even erase accurate but damaging information.
“Credit doctors promise that they can remove accurate but negative information from your credit report,” Mierzwinski said. “That’s an absolute lie.”
The new rules require such companies to sign a contract with consumers that can be rescinded within three days. They aren’t allowed to instruct consumers to make false statements or to alter a person’s identity. They may not request payment until all services are rendered, and they can’t make false claims to consumers about what they can do.
Mierzwinski wants other changes, but calls the new amendments “a major victory for consumers” that give them “greater certainty that negative information that is false will be removed from their report.”
xxxx GET OFF CREDIT LISTS People who don’t want to receive pre-approved credit offers in the mail should write to the credit reporting agencies:
Equifax P.O. Box 740241 Atlanta, GA 30374-0241 (800) 525-6285
Experian P.O. Box 1017 Allen, TX 75013 (800) 301-7195
Trans Union P.O. Box 390 Springfield, PA 19064 (800) 680-7289