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Common Credit Reporting Complaints (and What to Do About Them)

April 25th, 2017 · Credit Reports

Common Credit Reporting Complaints (And What to Do About Them)Checking your credit reports is the first step in the credit repair process. The goal? To find inaccuracies (which may be hurting your credit score), dispute them, and have them resolved. It sounds simple enough, but as revealed by complaints received by the Consumer Financial Protection Bureau (CFPB) last year, tens of thousands of consumers had a hard time with it. Here’s a breakdown of common credit reporting complaints and what to do if you experience the same.

How the CFPB helps with credit reporting complaints

Best case scenario, you have no problem accessing your credit reports, and you find no inaccuracies. Or, if you do find something wrong, you dispute it and the credit bureau’s investigation results in removal or correction of the mistake.

Worst case scenario, you’re unable to access your credit reports at all. Or, if you do, they include inaccuracies that you can’t get the credit bureaus or the data furnishers to correct.

In 2016, the CFPB received 54,000 complaints about worst case scenarios like these involving credit reporting. But they do more than simply accept complaints. The CFPB investigates complaints and tries to help consumers resolve them.

If necessary, they may be able to help you, too.

Before you give up on resolving problems with your credit reports, remember that this part of the credit repair process doesn’t have to be limited to the credit bureaus or data furnishers. You can and should bring in the CFPB to help you deal with unresolved issues.

What sort of complaints does the CFPB accept?

Pretty much anything having to do with credit reporting (or any other financial product or service). Just be sure to try and resolve the issue with the credit bureaus or data furnishers first.

Whatever you do, don’t discount the importance of the problem. If something is wrong on your credit reports, you have the right to correct it. And remember, you’re not alone. Just take a look at what tens of thousands of consumers had to complain about last year, as revealed in the CFPB’s Consumer Response Annual Report.

2016 credit reporting complaints, by category

Incorrect information on credit report – 74 percent of complaints

Don’t be surprised by inaccuracies in your credit reports; it’s by no means uncommon. In fact, according to a 2013 FTC study, 1 in 4 consumers found mistakes on their credit reports that might affect their credit scores. This prevalence is reflected in the CFPB’s annual report, as 74 percent of credit reporting complaints received in 2016 were about incorrect information.

That’s why checking your credit reports is the first step in repairing bad credit. The last thing you need are errors causing bad credit or making already-damaged credit worse.

If you haven’t already, send a credit dispute to the appropriate credit bureau about inaccurate information on your credit reports. If that fails to correct the problem, go through the data furnisher. If the inaccuracy remains unresolved, submit a complaint the CFPB.

What sort of incorrect information are we talking about? According to the annual report, sub-issues of incorrect information cited in credit reporting complaints to the CFPB include:

“Information is not mine”

Incorrect information about your own accounts is bad enough. But it’s especially maddening to find information on your credit reports that doesn’t even belong to you. Maybe you’ve been mixed up with someone else and their credit accounts ended up on your reports. Or maybe a thief got a hold of your personal information and opened accounts in your name.

In 2016, “Information is not mine” represented:

  • 35 percent of incorrect information on Equifax credit reports
  • 38 percent of incorrect information on Experian credit reports
  • 32 percent of incorrect information on TransUnion credit reports

“Account status”

When you work hard to keep your credit accounts in good standing, it’s beyond frustrating to find that an account status doesn’t reflect your good credit practices. Maybe an account you know you paid on time is showing up as paid late. Or maybe an active credit account is showing up as closed. Dispute these and other inaccuracies relative to your account’s status.

In 2016, “Account status” represented:

  • 30 percent of incorrect information on Equifax credit reports
  • 32 percent of incorrect information on Experian credit reports
  • 27 percent of incorrect information on TransUnion credit reports

“Account terms”

If you have a credit limit of $5,000, but it’s only listed as $3,000 on your credit reports, that means $2,000 isn’t getting counted toward your overall credit limit. That matters because your credit utilization ratio – which influences your credit score – is based on how much of your available credit you’re using. In other words, your utilization ratio will be higher than it actually is (a bad thing). The same problem presents itself if an account shows a higher balance due than what you owe. Dispute these and other inaccuracies associated with your account terms.

In 2016, “Account terms” represented:

  • 10 percent of incorrect information on Equifax credit reports
  • 11 percent of incorrect information on Experian credit reports
  • 11 percent of incorrect information on TransUnion credit reports

“Public record”

Among the most damaging of listings on your credit reports are bankruptcies, civil judgments, and tax liens. And these adverse public records don’t go anywhere anytime soon – bankruptcies stay on your credit reports for 10 years, civil judgments and paid tax liens 7 years. (Unpaid tax liens can stay on your credit reports indefinitely.)

So if you see an adverse public record being reported beyond the 7- to 10-year mark, dispute it with the credit bureaus. And dispute it immediately if you discover an adverse public record on your credit reports that does not belong to you.

In 2016, “Public record” represented:

  • 11 percent of incorrect information on Equifax credit reports
  • 7 percent of incorrect information on Experian credit reports
  • 8 percent of incorrect information on TransUnion credit reports

“Personal information”

While the personal information on your credit reports does not directly impact your credit score, incorrect personal information could mean your credit report has been confused with someone else’s, or could be in the future. Examples of personal information to correct include wrong names you have never gone by (including misspellings of your name), wrong current or previous addresses, wrong current or previous employers and, of course, wrong date of birth or social security number.

In 2016, “Personal information” represented:

  • 8 percent of incorrect information on Equifax credit reports
  • 8 percent of incorrect information on Experian credit reports
  • 8 percent of incorrect information on TransUnion credit reports

“Reinserted previously deleted information”

Yes, this can happen. But it’s not always wrong.

Maybe the credit bureau didn’t complete its investigation of a disputed item within 30 to 45 days. In that case, the item had to be removed, but could be reinserted if the data furnisher subsequently provides verification of the listing. You can still dispute the listing if you believe it to be inaccurate, but the Incorrect Information: 74 Percent of CRPB Credit Reporting Complaints in 2016reinsertion wasn’t illegal.

On the other hand, if a data furnisher reports a listing that previously fell off after the designated 7 to 10 years, that’s not right and should be disputed.

It’s also possible that the reinsertion was simply a mistake (again, something to dispute).

In 2016, “Reinserted previously deleted information” represented:

  • 6 percent of incorrect information on Equifax credit reports
  • 4 percent of incorrect information on Experian credit reports
  • 15 percent of incorrect information on TransUnion credit reports

Again, in any of the above circumstances relative to incorrect information on credit reports, try and resolve the issue first with the credit bureau and/or data furnisher. If that doesn’t work, submit a complaint to the CFPB.

Credit reporting company’s investigation – 11 percent of complaints

Once you dispute a listing with a credit bureau, they are legally obligated to investigate. TransUnion, Experian, and Equifax describe their dispute processes a little differently, but it is generally the same for all three credit bureaus:

  • They forward your dispute – and supporting documents – to the data furnisher
  • If the data furnisher verifies the disputed information, nothing is corrected or removed
  • If the data furnisher does not verify the dispute information, it is corrected or removed
  • You are notified of the results of the investigation within 30 to 45 days

Unfortunately, things don’t always go according to plan, which is why problems with investigations represent 11 percent of credit reporting complaints.

“No notice of investigation status or result”

Once an investigation is complete, the credit bureau has 5 business days to notify you of the result.

As stated in the Fair Credit Reporting Act under “Notice of Results of Reinvestigation,” the credit bureau must provide you with the following:

  • Statement that the investigation is complete
  • Credit report reflecting any corrected or deleted information
  • Name and contact info of the data furnisher contacted for verification
  • Notice letting you know of your right to add a statement to your credit report acknowledging that you dispute the listing.

If you do not receive this necessary information, submit a complaint to the CFPB.

In 2016, “No notice of investigation status or result” represented:

  • 36 percent of investigation complaints about Equifax
  • 44 percent of investigation complaints about Experian
  • 41 percent of investigation complaints about TransUnion

“Problem with statement of dispute”

If an item you dispute is not corrected or removed from your credit reports, you have the right to add a 100-word statement to your reports explaining that you dispute the listing. Whether or not you do this is up to you (see pros and cons of adding a statement). If you do choose to add one, make sure it’s account-specific, as a general statement will stay on your reports for 2 years – not a good thing if the negative listings you’re referencing fall of your reports before then. Should you have any problem with your statement of dispute, try to resolve it first through the credit bureau. If that doesn’t work, submit a complaint to the CFPB.

In 2016, “Problem with statement of dispute” represented:

  • 32 percent of investigation complaints about Equifax
  • 30 percent of investigation complaints about Experian
  • 28 percent of investigation complaints about TransUnion

“Investigation took too long”

By law, a credit bureau is supposed to complete an investigation within 30 days of receipt of your dispute. This timeframe varies if you sent supporting documentation separately, in which case the credit bureau has 45 days.

If they fail complete the investigation within that timeframe, the information in question must be corrected or deleted according to your dispute. So keep track of when you sent the dispute (which you should do via certified mail with return receipt so that you have proof of when the credit bureau received it).

If you have not heard back within the 30- to 45-day period, send this letter to the credit bureau (edited to your unique circumstance). If they fail to respond accordingly, submit a complaint to the CFPB.

In 2016, “Investigation took too long” represented:

  • 23 percent of investigation complaints about Equifax
  • 17 percent of investigation complaints about Experian
  • 19 percent of investigation complaints about TransUnion

“Inadequate help over the phone”

Ideally, you can resolve credit reporting investigations in writing, through the mail. However, should you find it necessary to call a credit bureau, you should expect to receive a good-faith attempt by the representative to resolve your issue. If you are unsatisfied with the experience, submit a complaint to the CFPB.

In 2016, “Inadequate help over the phone” represented:

  • 10 percent of investigation complaints about Equifax
  • 10 percent of investigation complaints about Experian
  • 12 percent of investigation complaints about TransUnion

Improper use of credit report – 6 percent of complaints

Only those with permissible purpose are allowed to see your credit reports. As outlined in Who Can See Your Credit Reports? those who qualify include:

  • Lenders you’ve applied to for credit, including credit card companies, auto finance companies, mortgage lenders, student loan lenders, and the like
  • Landlords you’ve submitted applications to
  • Insurance companies you’ve submitted applications to
  • Utility companies you’ve applied to set up accounts with
  • Government agencies you’ve applied to for assistance
  • Collection agencies attempting to collect debts from you
  • Employers or potential employers, to whom you’ve given consent
  • Court order or subpoena
  • Anyone who you give written consent to see your credit reports
  • Services you’ve given permission to monitor your credit for you

Another example of improper use of credit report is you receiving marketing offers after opting out.

If you discover that a credit bureau has violated your rights – and given access to your credit reports to anyone outside of these parameters – submit a complaint to the CFPB.

Unable to obtain report or score – 6 percent of complaints

By law, you are entitled to see your credit reports for free – from all three national credit bureaus – every 12 months through AnnualCreditReport.com. Beyond that, you have the right to purchase your credit reports and scores directly through TransUnion, Experian, and Equifax any time of year. If you have trouble accessing these reports and scores under either of these circumstances – and the credit bureaus are unable to resolve the issue – submit a complaint to the CFPB.

Credit monitoring or identity protection – 3 percent of complaints

All three of the national credit bureaus offer paid credit monitoring and identity protection services. These services include access to credit reports and scores, as well as fraud alerts letting you know when there has been significant activity on your credit reports. Should you have a problem with the execution of these services, or problems with billing or cancellation, submit a complaint to the CFPB.

On that note, keep in mind there is no reason to pay for credit monitoring at all. Yes, it’s something you should be doing (especially if you’re trying to repair your credit), but there are plenty of ways to monitor your credit for free.

How to Submit a Complaint to the CFPB

Learn more about submitting credit reporting complaints to the CFPB, including what information gets included in its online complaint database, how long it takes to receive a response from the CFPB, and what to do if you disagree with the result.

When you’re ready, click here to submit your complaint on the CFPB website or go to ConsumerFinance.gov/complaint.

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Budget Breakthrough: How to Create, Manage, and Tweak This Elusive Tool

April 18th, 2017 · Budgeting

Budget Breakthrough: How to Create, Manage, and Tweak This Elusive ToolNo matter how many times you’ve tried and failed to follow a workable budget, it’s time to try again. Because no matter how many times you tell yourself you don’t need a budget, the truth is that you do. That’s not to say you need a detailed budget with dozens of categories (though that’s certainly an option). But you do need something that instructs your money on how to cover necessary expenses while meeting your financial goals. That something is called a budget. Here’s how to create, manage, and tweak this elusive (but necessary) tool.

How to create your budget

1) Make a list of your financial goals

What do you want to accomplish with your money, both short- and long-term? Sure, you know you need to be saving and paying off debt, but make a list of specifics. The order of your priorities might look something like this:

Some of these things you may already be doing. Others may not apply to you at all. And you may have others to add to the list.

Tip

When making your financial goals, don’t be discouraged by doubt as to how you’re going to be able to fund them. The point of this step is intention and empowerment – deciding what you want your money to do, not letting your money decide for you. Granted, you may not be able to contribute as much toward these goals as you’d like, but the value is in getting clear on exactly what you want and working toward it.

2) Add up your monthly take-home pay

If you’re on a fixed salary, this should be pretty straightforward. If your income varies from month-to-month, it’s obviously more challenging. The longer you’ve been earning this irregular income, the better idea you’ll have of what you should budget for by looking at least year’s earnings. If your work is seasonal, maybe it’s best to go by last year’s corresponding month. You could also use an average of last year’s monthly earnings or use the lowest-earning month as a baseline.

Tips

  • Remember to include additional income (e.g., alimony, child support, side hustles)
  • If taxes, insurance, and retirement aren’t taken out of your paychecks, remember to subtract them from your take-home pay

3) Add up what you spend every month, by category

Track your spending for 30 days. How many categories should you use? It depends on you. Some people like to break spending down into as many categories (and sub-categories) as possible, which might look something like this:

  • Housing
    • Mortgage/rent
    • Homeowner’s or renter’s insurance
    • Repairs (if you own)
  • Utilities
    • Electricity
    • Gas
    • Water/sewer
  • Cell phone
  • Internet
  • Food
    • Groceries
    • Eating out
  • Personal care
  • Clothes
  • Household expenses
  • Home office
  • Transportation
    • Car payment
    • Car insurance
    • Gas
    • Maintenance/repairs
  • Kids
    • Child care
    • Back-to-school expenses
    • Extracurricular activities
  • Pets
    • Food
    • Veterinary care
  • Entertainment
    • Movies
    • Cable/streaming services
    • Other
  • Gifts
  • Travel
  • Healthcare
    • Health insurance (if you pay for your own)
    • Out-of-pocket medical expenses (co-pays, vision/dental if not covered by insurance)
  • Life insurance
  • Miscellaneous
  • Debt payments
  • Savings
    • Emergency fund
    • 3-to-6 months living expenses
    • Special event or trip
    • Retirement
    • Kids’ college

For an even more comprehensive list of possibilities, take a look at Mint’s budgeting categories.

But if you prefer a simpler budgeting system, you could have far fewer categories. For example, if you go with the 50-20-30 percentage budget (more on that later), you may limit your categories to 1) essentials (50 percent of your take-home pay), 2) financial goals (20 percent of your take-home pay), and 3) discretionary spending (30 percent of your take-home pay.

NOTE: Obviously, you won’t have every possible expense every single month. For those categories for which you had no spending over the 30-day period you’re tracking, use last year’s spending in those categories to come up with a monthly average (if you don’t have the exact figures, estimate). You won’t spend that monthly allotment every month, but you can (and should) contribute that much to a fund for covering those expenses in the future. Good examples are spending on gifts, home and car repairs, back-to-school expenses, and medical expenses not covered by health insurance.

4) Subtract what you spend from what you earn

The goal, of course, is to spend less than you earn. If you discover that you’re spending more, you know you need to cut back. But even if you’re spending less, that’s not to say you’re spending right. The point of a budget is to make sure you’re spending in a way that not only ensures that all of your bills are paid, but that you’re funding financial goals that are important to you.

5) Adjust your spending accordingly

How much can you deduct from your spending to put toward your financial goals instead? Look at variable expenses, of course, like food, gas, and entertainment. But look at fixed expenses, too. Maybe you can:

  • Cancel cable and stream your programming through Netflix, Hulu, Amazon Prime, or Sling TV
  • Talk to your cell phone provider about getting on a cheaper plan
  • Shop around for cheaper car insurance
  • Share the cost of rent and utilities by renting out a room in your home

The point is to move as much of your income as possible away from spending so you can funnel it toward your financial goals.

How much should you be allotting to what? It’s up to you, but you might want to use one of these percentage budgets as a guideline:

50/20/30

  • 50 percent of your income goes to essentials
  • 20 percent of your income goes to financial goals
  • 30 percent of your income goes to discretionary spending

60/40

  • 60 percent of your income goes to essentials and non-essentials
  • 10 percent of your income goes to retirement savings
  • 10 percent of your income goes to long-term savings
  • 10 percent of your income goes to short-term savings
  • 10 percent of your income goes to fun spending

Goldilocks Budget

  • 35 percent of your income goes to housing
  • 15 percent of your income goes to transportation
  • 25 percent of your income goes to discretionary expenses
  • 10 percent of your income goes to savings
  • 15 percent of your income goes to paying off debt

Whichever allotment of spending you choose – be it one of these or your own variation – what’s most important is that you have a plan for your money so you know exactly where it goes.

6) Don’t leave a single dollar unaccounted for

However you decide to budget your money, make sure you budget all of it. This is known as zero-sum budgeting, meaning you’re left with zero because every dollar has been “spent” on expenses, debt, savings, or investments. Because if you’re not telling your money what to do, it’s not working for you. Learn more about zero-sum budgeting.

How to manage your budget

1) Use a budgeting app

Whether budgeting is new to you or you’ve been doing it for years, an app can help make it easier. The key is in choosing the right one. When looking around, ask yourself these two questions:

  • Is it free? There are too many free options for you to have to pay for one.
  • Does it connect to your financial accounts? If so, it will automatically log your activity on bank and credit card accounts. Keep in mind you’ll already have to manually input any cash transactions, so this is an important time-saving, user-friendly feature.

The best options that meet both of these criteria are Mint and LearnVest. If you don’t love either one of those, check out YNAB. It’s a paid app but offers a free trial. If you like it, pay $5 a month or $50 a year.

Apps not for you?

You may prefer managing your budget with personal finance software (like Quicken), Excel spreadsheets, or a budget binder.

2) Set up automated deductions from your checking account

The more you can do to automate your spending and saving, the easier it will be to stick to your budget. So if you haven’t already, utilize all of the automated options you have, including:

  • Automated transfers to savings. No matter how committed you are to a savings goal, you run the risk of falling short if every month you’re faced with the choice of saving or not. Take the decision out of it (or forgetting altogether) with automated savings. Only once do you have to pick a monthly savings amount, and the date you want it to come out of your checking account. If you already have a savings account attached to your checking, it’s simply a matter of adjusting the date and amount to meet your savings goal. Otherwise, talk to your bank about getting automated savings set up.
  • Automated payments. If your savings isn’t automated and you forget to make the transfer, the only person you have to answer to is yourself (and possibly your spouse). But if you forget to make a payment, you have a company to answer to, which will likely mean a late fee that unnecessarily sabotages the success of your budget. So for recurring bills, take advantage of automated payment options that you can set up either through the company or your bank.

3) Use the cash envelope system

This isn’t intended for all of your expenses; only the ones for which you can easily 1) go over your budget and 2) pay with cash. For instance, you wouldn’t use the cash envelope system for mortgage or rent payments, insurance payments, utilities, cell phone payments, or credit card payments. What you would use the cash envelope system for are things like groceries, eating out, gas, movies, and clothes.

As for the system itself, it’s just like it sounds. Whatever your budget for groceries this month, put that much cash in an envelope. When the money in the envelope is gone, you’re done buying groceries for the month. If that means getting creative with what’s in the pantry, so be it. Obviously, you have to eat, so if you run out of food and need to borrow from another envelope you can. But don’t make it a habit. Learn from the shortfall and budget differently going forward. (It might also help to divide your monthly cash allotment into weekly envelopes.)

What’s really driving your financial decisions? Find out.

Times When Your Budget Needs a TweakHow to tweak your budget

You’ll know it’s time for a change if:

  • You spend more than your budget allows
  • Your income changes
  • Your expenses change
  • Your financial goals change

Under any of these circumstances, go in and revise your budget accordingly:

  • If you’re falling short in a budget category or your expenses increase, cut that amount from one or more other categories; if you can’t find the money, look for ways to increase your income
  • If your income rises or your expenses decrease, reserve the extra money exclusively for funding your financial goals
  • If your income falls, go in and cut expenses by that much; if it means temporarily lowering your funding of financial goals, so be it
  • If you decide to pursue an additional financial goal, or increase the funding of an existing one, cut expenses from other categories or find extra income
  • If you decide to let go of a financial goal (like funding a trip or special event), reserve that money exclusively for funding other financial goals

Beyond that, make it a habit of revisiting your budget at least once a year. An expense you have today may seem unnecessary 12 months from now, especially if that extra money can go toward the financial goals that you’re getting closer to achieving with every passing week, month, and year.

Learn more about budgeting.

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Quick Guide to the Fair Credit Reporting Act

April 11th, 2017 · Credit Repair

Quick Guide to the Fair Credit Reporting ActThe more you know about credit reporting laws, the better for your credit reports and scores. But while the Fair Credit Reporting Act isn’t as intimidating of a read as it might sound, it is 100 pages long. If you want to delve in, this quick guide is a great primer. But if you just want to get the basics down, this quick guide is all you need. Either way, you’ll get a good feel for how credit reporting works. Whether you’re trying to repair bad credit — or simply want to make good credit better — this is good information to use in your favor.

About the Fair Credit Reporting Act

Considering how much credit affects our lives, we need laws ensuring its accuracy. That’s the purpose of the Fair Credit Reporting Act (FCRA).

Enacted in October 1970, the FCRA states that this legislation was born out of a need for “accuracy and fairness of credit reporting” and to “insure that consumer reporting agencies exercise their grave responsibilities with fairness, impartiality, and a respect for the consumer’s right to privacy.”

To that end, the FCRA further states:

“It is the purpose of this title to require that consumer reporting agencies adopt reasonable procedures for meeting the needs of commerce for consumer credit, personnel, insurance, and other information in a manner which is fair and equitable to the consumer, with regard to the confidentiality, accuracy, relevancy, and proper utilization of such information in accordance with the requirements of this title.”

Amendments

Numerous amendments have been made to the Fair Credit Reporting Act since it was enacted in 1970:

  1. Consumer Credit Reporting Reform Act of 1996
  2. Section 311 of the Intelligence Authorization for Fiscal Year 1998
  3. Consumer Reporting Employment Clarification Act of 1998
  4. Section 506 of the Gramm-Leach-Bliley Act
  5. Sections 358(g) and 505(c) of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (PATRIOT ACT)
  6. Fair and Accurate Credit Transactions Act of 2003
  7. Financial Services Regulatory Relief Act of 2006
  8. Section 743 (Div. D, Title VII) of the Consolidated Appropriations Act of 2008
  9. Credit and Debit Card Receipt Clarification Act of 2007
  10. Sections 205 and 302 of the Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009
  11. Consumer Financial Protection Act of 2010
  12. Red Flag Program Clarification Act of 2010

Changes made by these amendments are reflected in the rights outlined in this guide.

Major Rights Afforded By the FCRA

You have the right to see your consumer reports and credit scores

Consumer Reports

Most of the time, the consumer reports we’re concerned with are credit reports from the big three national credit bureaus – TransUnion, Experian, and Equifax. But there are actually dozens of consumer reporting agencies collecting and sharing information about you. Fortunately, the Fair Credit Reporting Act says you have the right to see all of it, giving you an opportunity to catch mistakes.

Here’s how it works.

Free Annual Consumer Reports

Every 12 months, you can request a free copy of your reports from consumer reporting agencies:

  • For credit reports from the big three national bureaus, go to com. From there you can request your reports from TransUnion, Experian, and Equifax. You can request them all at once or stagger them throughout the year.
  • For other consumer reports, you’ll have to go straight to the source. Here is a list of consumer reporting agencies that the Consumer Financial Protection Bureau (CFPB) recommends you keep an eye on. This list includes contact information you can use to request your consumer reports once a year.

Other Ways to See Credit Reports for Free

In addition to your annual credit report, you can see your credit reports from TransUnion, Experian, and Equifax for free if you:

  • Dispute a credit report listing that is subsequently corrected
  • Have reason to believe a credit report is inaccurate due to fraud
  • Receive an adverse action notice from a creditor
  • Receive a risk-based pricing notice from a creditor
  • Are unemployed and looking for work
  • Are on public welfare assistance

Beyond that, you can see your credit reports for free through credit monitoring subscription sites. We recommend Credit Karma to see your TransUnion and Equifax credit reports, and Experian CreditWorks Basic to see your Experian credit report.

Learn more about credit reports: 11 things simply explained.

Credit Scores

As with consumer reports, the FCRA says you have the right to see your credit scores. Unfortunately, this right does not stipulate that you can see your credit scores for free. That’s not say, though, that you can’t find them for free. Here’s how.

The same credit monitoring sites that provide free credit reports also provide free credit scores:

  • Free TransUnion and Equifax VantageScores through Credit Karma
  • Free Experian VantageScore through Credit.com
  • Free FICO Score through Discover Credit Scorecard (or your own credit card issuer)

That said, there are circumstances when it’s a good idea to pay for credit scores.

If you’re planning to buy a home or car, it’s a good idea to take a look at industry-specific FICO Scores used by mortgage and auto lenders. In that case, go straight to the source at myFICO.com. You have several options, but we recommend the FICO Score 3-Bureau Report (one-time access) or FICO Ultimate (monthly access to the same information).

Data furnishers must ensure accuracy of reported information

Any company or individual that reports information about you to a consumer reporting agency is a data furnisher (e.g., banks, credit card issuers, mortgage lenders, auto lenders, student loan services, landlords, collection agencies).

This is a big responsibility that, thanks to the FCRA, comes with protections.

Data furnishers are prohibited from:

  • Reporting information they know to be inaccurate
  • Reporting information after it has been disputed and proven inaccurate

And if mistakes are proven, data furnishers are required to update consumer reporting agencies with corrections.

You have the right to dispute consumer report errors

Building credit can be challenging enough under the best of circumstances. The last thing you need on your credit reports are mistakes dragging down your creditworthiness. Thanks to the Fair Credit Reporting Act, you have the right to dispute anything on your credit reports (or other consumer reports) that you believe to be in error.

Each of the big three credit bureaus has online dispute options. While that may be the simplest method, we recommend creating a paper trail by sending your disputes via regular certified mail with return receipt requested. Here’s a sample letter requesting removal of inaccurate information.

You may also dispute directly with data furnishers.

Learn more about credit disputes.

Consumer reporting agencies must investigate disputes and correct inaccuracies

Once they receive a dispute from you, the consumer reporting agency must conduct a “reasonable investigation.” Here’s how each of the big three credit bureaus describes this process:

In general, though, the process is the same among all three.

They contact the data furnisher for verification of the inaccurate information. If the data furnisher verifies the information, nothing is changed. If the data furnisher does not verify the listing, it must be corrected or removed from your consumer reports. And all of this should be done within 30 days of receipt of your dispute (45 if you sent supporting documentation separately from your initial dispute).

Not just anyone can see your consumer reports

The consumer reporting agencies are only authorized to share your reports with those who have permissible purpose:

  • Lenders you’ve applied to for credit, including credit card companies, auto finance companies, mortgage lenders, student loan lenders, and the like
  • Landlords you’ve submitted applications to
  • Insurance companies you’ve submitted applications to
  • Utility companies you’ve applied to set up accounts with
  • Government agencies you’ve applied to for assistance
  • Collection agencies attempting to collect debts from you
  • Employers or potential employers, to whom you’ve given consent
  • Court order or subpoena
  • Child support enforcement agencies
  • Anyone who you give written consent to see your reports
  • Services you’ve given permission to monitor your credit for you

Learn more about permissible purpose.

FCRA Credit Reporting RightsYou must be notified if something in consumer reports results in adverse action

An adverse action is a negative decision made based on information in your consumer reports, like:

  • Being turned down for credit, insurance, or employment
  • Being approved for credit or insurance, but under less favorable terms (because of your credit)
  • Having less favorable changes made to existing credit or insurance

Should a creditor, insurance company, or employer take any of these adverse actions against you – based on information in your consumer reports – they must:

  1. Notify you that adverse action was taken based on information in your report
  2. Provide to you any credit score that was used in making the decision
  3. Provide to you the name, address, and phone number of the consumer reporting agency that provided the report
  4. Notify you of your right to request a free copy of that report and to dispute any inaccuracies

Note, to receive your free report, you must make the request within 60 days of the adverse action notice.

You can opt-out of prescreened offers

Considering permissible purpose, you might be wondering how you receive prescreened offers from creditors and insurance companies that you didn’t apply to and, consequently, aren’t able to see your credit reports. Here’s how.

The credit bureaus use the information in your credit reports to determine whether you meet certain criteria that creditors or insurance companies are looking for in consumers. If you meet the criteria, you go on the list that gets provided to the creditor or insurance company, and you get an offer.

Thanks to the Fair Credit Reporting Act, you can stop these offers.

If you’d rather not be included in these lists – and don’t want to receive prescreened offers – you can ask to be removed from the lists of all three credit bureaus by calling toll-free 1-888-567-8688. And creditors are required to notify you of this option in every prescreened offer they send you.

Should you opt out?

It depends.

When you’re shopping around for credit or insurance, prescreened offers can be helpful educational tools, letting you know the kind of terms you might qualify for so you can make choices and negotiate accordingly.

Plus, the FTC says “Because you are pre-selected to receive the offer, you can be turned down only under limited circumstances. The terms of prescreened offers also may be more favorable than those that are available to the general public. In fact, some credit card or insurance products may be available only through prescreened offers.”

Finally, prescreened offers have zero impact on your credit score.

On the other hand, prescreened offers mean a lot of junk mail – junk mail with personal information that should be shredded, not just thrown in the trash. Also, opting out won’t stop all unsolicited offers from credit card and insurance companies, only those falling into the prescreened category.

The good news is, you can always change your mind. The same number you call to opt-out is of prescreened offers is the same number you call to opt back in.

Negative information can only stay on your consumer reports for so long

As outlined in our Guide to Credit Reports, most negative information must be removed from your reports after 7 to 10 years:

  • 2 years for credit inquiries (though hard inquiries only affect your credit score up to 12 months and soft inquiries not at all)
  • 7 years for:
    • Late payments
    • Charge-offs
    • Collection accounts (plus 180 days)
    • Foreclosures
    • Judgments (with exceptions)
    • Paid tax liens (if unpaid they can stay on indefinitely)
  • 10 years for bankruptcies

Should you see that a negative item’s inclusion on your reports exceeds the above time limits, submit a credit dispute to the appropriate credit bureau(s).

How Long Do Fraud Alerts Stay On Credit Reports?You have the right to place fraud alerts on your consumer reports

If you have reason to believe you have been a victim of identity theft, you have the right to ask that a fraud alert be placed on your consumer reports:

  • Initial fraud alert that lasts 90 days, which you can renew indefinitely
  • Extended fraud alert that lasts 7 years
  • Active duty military alert that lasts 1 year

Fraud alerts won’t prevent you from getting credit, but they will require potential creditors to contact you for verification first.

Other Rights Covered In the FCRA

The Fair Credit Reporting Act also outlines your rights relative to:

  • Affiliate sharing
  • Relation to State laws
  • Disclosures to FBI for counterintelligence purposes
  • Disclosures to governmental agencies for counterterrorism purposes
  • Disposal of records
  • And more

FCRA Enforcement

The Fair Credit Reporting Act is enforced by the FTC and the CFPB. So, if you believe your rights have been violated, you may submit a complaint to one or both of these agencies. The FCRA also affords you the right to sue violators.

To learn more about your rights, see the Fair Credit Reporting Act in its entirety. You may also want to check out the FTC’s Summary of Your Rights.

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