Credit Reporting & Repair

  
     
Consumer credit reports are vital documents, and the information in them may affect your chances for credit, as well as employment or insurance. Many companies advertise that they can clean up your credit, or get you loans or a credit card, regardless of your credit history. The fees for this service vary from $100 to several hundred dollars. Consumers should be aware that no one, including a credit repair company, can magically clear a negative report. There is no fee that you can pay to remove accurate information from your credit file. Thus, all the company can do is charge you for something that you can do yourself for free.

How to Request a Copy of Your Credit Report 

At your request, credit reporting agencies must give you the information in your file, and a list of everyone that has requested it recently. There is no charge for the report if adverse action, such as rejection for credit, employment or insurance, has been taken against you in the past 30 days because of the information in the report. You are also entitled to a free report every 12 months if you are unemployed but plan to seek employment within 60 days, if you are on welfare, or if your report is inaccurate due to fraud. Otherwise, reports cost $8.50.

The three national credit reporting agencies are:

Trans Union Credit Services
P.O. Box 390 
Springfield, PA 19064 800-888-4213 
or 
800-916-8800
  Equifax Credit Services
P.O. Box 105873 
Atlanta, GA 30348
800-685-1111
  Experian Credit Services
P.O. Box 2104 
Allen, TX 75013
888-397-3742

 

Credit Repair Services

New York State defines credit repair companies as organizations that offer consumers advice or assistance on how to improve their credit rating for a fee. These firms offer to get your credit report for you, correct mistakes on your credit record, or help you get a new line of credit. Some firms may also offer credit counseling or debt consolidation services. Debt consolidators are non-profit organizations that help consumers balance their debts over the long term. For more information on these organizations, see our report on debt consolidation.

Credit repair companies must provide written contracts for all services. The written contract must specify the services to be performed, including; a list of the adverse information appearing on the consumer’s credit report that will be modified, a description of the precise nature of each modification, and the estimated date by which each modification will occur. A copy of the consumer’s current credit report issued by a consumer credit reporting agency must be attached to the contract with the adverse entries proposed to be modified clearly marked. It is important to note that advance fees for credit repair services are illegal.

Credit repair contracts can be cancelled without penalty within three days of signing the contract. Cancellations must be made in writing. Contracts must clearly state this fact, as well as provide information on where notices of cancellation are to be sent.


Credit Reports

The Federal Fair Credit Reporting Act gives you the right to know what your credit file contains. Credit reporting agencies must help you interpret the credit report.

Companies that use credit reports, such as banks, car dealers, employers, etc., are required to notify consumers that they can receive a free copy of their credit report and their ability to dispute the information within it when they take adverse action because of the information in a credit report. They must provide consumers with the name, address and phone number of the credit agency that provided the report. Employers must get the permission of the employee or prospective employee in writing to obtain a copy of the credit report.

Most of the information in your file may be reported for a period of seven years. After seven to ten years, the information cannot be disclosed by a credit reporting agency unless you are being investigated for a credit application of $50,000 or more, for an application to purchase life insurance of $50,000 or more, for an employment at an annual salary of $25,000 or more. If you have filed for personal bankruptcy, that fact may be reported for up to ten years.

Consumer reporting agencies are required to follow reasonable procedures to ensure that subscribing creditors report information accurately. However, mistakes may occur. If there are not satisfied with the results, you must notify the reporting company in writing. It must investigate and correct inaccurate data at no charge to you within 30 days. If you are not satisfied with the results, you may enter a statement of 100 words or less in your file explaining why the record is inaccurate. The reporting company must include your statement in any reports it issues on you.

The consumer reporting agency must notify any person who has received a report in the previous year that an error existed and also furnish then with the corrected information. The consumer reporting agency must include in your statement the disputed data or a coded version of it with any reports it issues about you. New York law provides that, at your request, the modification be clearly marked. The agency must promptly mail you the modified report at no charge.

Companies that provide information to credit reporting agencies, such as lenders, retail establishments, etc., are also required to investigate disputed information within 30 days. They must also notify the credit reporting agency if a consumer disputes the information they are supplying to the Credit Reporting Agency and when consumers voluntarily close credit accounts.



Preventative Steps to Avoid Credit Problems

  1. Develop a budget. Do a realistic assessment of how much money you earn and how much money you spend. Write down all your expenses. Prioritize those that are most important and try to get rid of those that are not.
  2. Keep track of everything that you pay for on credit and make sure that it doesn’t exceed what you can afford to pay.
  3. Always try to pay your bills on time and in full.
  4. Never lend your credit card to anyone.
  5. Keep all of your original documents such as receipts and billing statements in case you need to dispute a credit bill or report.
  6. Contact your creditors as soon as you realize that you are having trouble paying your bills. Try to work out a payment plan with them before being turned over to a debt collector.



Paying Bills Online

Paying bills online offers an alternative to the hassle of writing checks. Although the service can be expensive, it has its advantages, especially for those with busy schedules. The service allows customers to go to one location to pay all of their bills and even to set up their own payment schedules. This makes it easier for those who travel a lot to make sure that their bills get paid on time in order to avoid bad credit. Although there are some security issues involved, most sites are protected, requiring users to log in using a password and identity code. The transactions are encoded and your data is stored on a secure server. It is important that you make sure that your banking site has these safety requirements before you perform any transactions. You should also check your schedule payment regularly to make sure that all of your payments have been received on time. If you find that any payments were late, most sites offer to pay late fees and contact creditors.
 

For more information

To file a complaint against a New York credit repair firm, contact:
New York State Attorney General’s Office
Bureau of Consumer Frauds and Protection
120 Broadway
New York, NY 10271
212-416-8345
www.oag.state.ny.us

For more information on the Fair Credit reporting Act, contact:
Federal Trade Commission
Consumer Response Commission
Consumer Response Center – FCRA
Washington DC 20580
202-326-3761
www.ftc.gov