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
- 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.
- Keep track of everything that you pay for on credit
and make sure that it doesn’t exceed what you can afford to pay.
- Always try to pay your bills on time and in full.
- Never lend your credit card to anyone.
- Keep all of your original documents such as receipts and billing
statements in case you need to dispute a credit bill or report.
- 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