Fair Credit Reporting Act

March 27, 2021CreditBy toptierfinancial

Using a credit card is easy — you use the card to buy things and then pay the credit card bill.

A credit card can sometimes be difficult, however, when dealing with your credit file.

From a  missed payment to a loan that isn’t yours that’s incorrectly listed on your credit report, there are all kinds of ways your credit score can drop.

And not all of them are from something you did wrong.

What Is the Fair Credit Reporting Act?

Consumers have protections under the law regarding their credit reports — which is where credit scores and credit problems are listed for lenders to check before offering you credit.

Errors on a credit report can drop your credit score, making it harder to get a loan, credit card, rent an apartment, or qualify for insurance coverage, among other things.

The main law that protects consumers from credit errors is the Fair Credit Reporting Act, or FCRA.

Your Rights Under The FCRA

Here are some of the rights you have under this law and how to use it to protect your credit:

View Credit Reports

The FCRA entitles you to review your credit file from each of the three main credit bureaus for free once every 12 months.

You can do one check every four months from each of the three — Equifax, Experian, and TransUnion — if you really want to be on top of it.

Start by going to AnnualCreditReport.com to request your credit file online.

Only use that website and don’t use a copycat site that charges fees for what should be a free service.

You’ll need to verify your identity to get online access. You can also request your credit file through an automated phone system or the mail.

The FCRA applies to all consumer reporting agencies.

You can also look at reports from other consumer reporting agencies that collect noncredit information about you.

These include rent payments, insurance claims, employers, and utility companies.

The Consumer Financial Protection Bureau lists the reporting companies and how to request a free report from each.

DISPUTING ERRORS

Getting a credit report in your hands can lead to all sorts of eye-opening concerns. Anything that’s listed as negative should be checked for accuracy. Here are some things to look out for:

Eviction that wasn’t legal.
Creditor listed that you didn’t have an account with.
Loan default.
Wrong name.
Wrong address.
Wrong Social Security Number.
Incorrect loan balance.
Closed account reported as open.
A loan you didn’t initiate.

Some errors may be simple to resolve and others you may need to do more research on before disputing them to ensure they’re incorrect.

For example, you may not recognize the name of a creditor and assume you don’t have an account with them. But it may just be a store credit card you recently applied for that is listed by the issuing bank’s name. Or maybe a home or auto loan was sold to a new loan servicer.

Other errors could be reason to suspect identity theft, or there could just be wrong information that’s bringing down your credit score.

If you suspect identity theft, such as someone taking out a credit card in your name, then file a police report and report it to your credit card company and the credit reporting agencies.

To dispute erroneous information, use certified mail to send the credit bureau a letter and copies of documents explaining the error. If a loan still shows an outstanding balance and you have written proof that it was paid off, for example, send a copy to the credit agency.

The Federal Trade Commission has a simple sample letter to dispute errors on your credit report.

Credit agencies have 30 days to investigate and respond to your dispute, unless they deem it frivolous.

If it corrects an error, it must send you a free copy of your credit report through AnnualCreditReport.com so you can see that the corrections have been made.

Check Your Credit Score

The law allows you to request a credit score, though it’s legal for credit agencies and other businesses to charge you a fee for this service.

Some credit cards provide scores for free, so check with your credit card issuer first.

A credit score isn’t the same as a credit report.

Information in a credit report determines a credit score, and each credit bureau can use a different scoring model that requires it to provide different information.

You have different credit scores, depending on which factors are weighed more heavily.

Monitoring your credit is vital. Make sure that you review your credit report for any inaccuracies.

Know Who Can View Your Credit Report

The FCRA doesn’t allow a credit reporting agency to share your credit file with someone who doesn’t have a valid need.

Some inquiries, such as from a potential employer or landlord, require your written consent.

And, they can only check your credit report, not your credit score.

The credit reporting agencies can share your credit report for legitimate reasons, such as when you’re applying for credit, insurance, housing, or with a current creditor.

A Time Limit To Negative Information

The FCRA doesn’t allow credit bureaus to report negative information that’s more than seven years old, though it allows some forms of bankruptcy to remain on a credit report for 10 years.

There’s also a time limit for positive credit information such as on-time payments and low balances — up to 10 years after the last date of activity on the account.

Rejections Based on Credit Report

If your application for credit, job, insurance, or housing has been denied because of information in your credit report, the law gives you the right to know this information.

The landlord, employer or other entity that denied your application must notify you and give you the name, address and phone number of the credit reporting agency that provided the information.

The FCRA allows you to get a free copy of your credit report from that reporting agency within 60 days of the action against you. That’s in addition to the three free credit reports allowed annually.

To best deal with a potential rejection ahead of time, it’s smart to check your credit report before applying for credit, rental unit or related use of your credit report and check it for errors. Give yourself enough time to fix them.

The post Fair Credit Reporting Act appeared first on Better Credit Blog | Credit Help For Bad Credit.

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Want to See Your FICO Score for Free? Here’s How to Do It

February 5, 2021CreditBy toptierfinancial

Want to See Your FICO Score for Free? Here’s How to Do It - Pinterest graphicThe vast majority of lenders use your FICO credit score to evaluate your credit risk as a consumer when they are deciding whether or not to extend credit to you. And yet, historically, it has been costly for consumers to access their own FICO scores.

Popular websites such as Credit Karma and Credit Sesame offer free credit scores, but the scores provided are usually VantageScores, not FICO credit scores.

Knowing your VantageScore is still valuable information, but it is not directly tied to your FICO Score, so it is less useful when it comes to preparing to apply for credit. While it is often true that a consumer’s FICO score is similar to their VantageScore, in some cases, they may be vastly different, especially depending on which credit scoring models are used and which credit bureaus are providing the credit report information.

If you need to check your FICO score, where can you do so without paying a fee to access it?

Here are some of the best places to get your FICO score for free.

Your Credit Card Issuer

Several major credit card issuers now offer consumers the ability to check their FICO scores for free.

Discover Bank

Discover offers a free way to check your FICO score with their Credit Scorecard program. Even consumers who do not have a relationship with Discover Bank can freely use this feature.

Experian provides the credit report data that is used to calculate your FICO score. Your credit score updates once every 30 days and Discover notifies you when it is time to check your new FICO score.

In addition, Discover’s FICO Credit Scorecard keeps track of your credit score history so you can see how it changes from month to month.

The Credit Scorecard also provides a summary of what is going on with each of the five credit score factors that are influencing your FICO score: your payment history, credit utilization, length of credit history, mix of credit, and new credit (e.g. inquiries). You can find educational information about credit scores on the website as well.

To access your FICO score with Discover’s FICO Credit Scorecard, either visit their website or use the bank’s mobile app.

Bank of America

Bank of America is another widely used bank that offers free FICO scores to consumers. However, to enroll in this program, you must be a Bank of America credit card customer.

Much like Discover’s offering that we described above, Bank of America’s FICO Score Program provides customers not only with their FICO scores but also information on the major factors that influence your credit score, your month-to-month credit score history, and education about how to achieve and maintain good credit.

On top of this, Bank of America also compares your credit score to the national average.

Bank of America customers can view their FICO score for free on the company’s website or mobile app.

Citibank

Consumers who have Citibank branded credit cards can obtain their FICO score for free from Citi.

Citi states on their website, “We think it’s important to provide our cardmembers with free access to information that will help them understand and stay on top of their credit status. That’s why we’re providing you with your FICO® Score and information to help you understand it.”

Your FICO score from Citibank is determined using information from your Equifax credit report and the FICO Bankcard Score 8 credit scoring model. Unlike the standard version of FICO 8 that you may be used to seeing, which ranges from 300 to 850, the bank card model used by Citi ranges from 250 to 900. It is updated once a month.

You can find more information on Citi’s free FICO score program on their website.

American Express

Recently, American Express started providing access to free FICO scores to consumers who have American Express credit cards.

The bank uses the standard version of FICO 8, so the credit score range spans from 300 to 850. Experian provides the credit report data used to calculate your score.

As with the other free FICO score programs, you also get to see how your FICO score changes over time and you receive a summary of the factors affecting your credit score.

American Express credit cardholders can see their FICO scores in their online account or on their monthly statement.

Those who do not have credit cards with American Express can get their TransUnion VantageScore for free through the company’s MyCredit Guide program, but this does not include FICO scores.

Barclays

FICO scores from TransUnion are available to all Barclays credit card customers through the bank’s online banking system.

Once you have had your Barclays card for three months, you can see a chart of your FICO score history over the time you have had an account open with Barclays, according to SmartAsset.

Plus, Barclays will send you alerts via email if your credit score changes, including an explanation of why your score has changed.

Wells Fargo

Wells Fargo account holders who use their online banking platform can view their FICO credit score within their online account.

Additional features include your credit score history, information on your credit score factors, and personalized credit tips from Wells Fargo.

According to the bank, they offer your FICO score for free in order to “support your awareness and understanding of FICO® Credit Scores and how they may influence the credit that’s available to you.”

The FICO score you get through Wells Fargo is calculated using Experian credit report data and is updated once a month.

Experian

Experian is the only major credit bureau that offers consumers their FICO 8 scores for free along with their Experian credit reports.

In addition, Experian offers an alternative credit data program called Experian Boost, which can add positive payment history from certain bills to your credit report, such as utilities and Netflix.

Sign up on Experian’s website to start using these free services.

Your Local Bank or Credit Union

Not all banks and credit unions offer customers the ability to check their FICO scores for free, but it is worth asking if you do not have access to the previous options. If your local bank or credit union does not offer free FICO scores, they may be able to help direct you toward somewhere that does.

Will Checking Your FICO Score Hurt Your Credit Score?

Although this is a common concern, checking your own credit score should never hurt your credit.

This credit myth likely arises from the fact that hard inquiries on your credit report can have a small negative effect on your score.

However, hard credit inquiries only happen when you are actively seeking credit and a lender has to pull your credit report to decide whether or not to loan you money.

All other credit checks, including those you conduct yourself for educational purposes, are considered to be soft inquiries, which do not affect your score at all.

Final Thoughts on How to Get Your FICO Score for Free

If you want to be able to see your FICO score for free, there are many options available to you, especially if you have credit card accounts with major banks such as those listed above.

FICO also has a program called FICO Score Open Access that aims to enhance consumer access to FICO scores and educate consumers about the topic. FICO has a list of additional lenders and credit and financial counseling organizations that participate in this program, which you can browse in case you do not have any accounts with the banks mentioned here.

Keep in mind that lenders use many different versions of FICO scores, including older generations and versions that are specific to certain industries. That means that when you check your FICO score for free, it is not guaranteed to be the same exact FICO score that a lender will use when you apply for credit.

When you check your FICO score using one or more of the methods in this article, take note of which credit bureau is supplying the information as well as which FICO score version is being used to calculate the result so that there is no confusion if you see a different FICO score somewhere else.

Finally, remember that you can also get your VantageScore for free in many places as well. While it’s not the same as your FICO score, it can still provide educational value as it uses the same general principles to calculate your score.

 

Let us know if this article helped you find a way to get your FICO score for free by commenting below!

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How To Use The Fair Credit Reporting Act To Your Advantage

July 11, 2020CreditBy toptierfinancial

Using a credit card is easy — you use the card to buy things and then pay the credit card bill.

A credit card can sometimes be difficult, however, when dealing with your credit file. From a  missed payment to a loan that isn’t yours that’s incorrectly listed on your credit report, there are all kinds of ways your credit score can drop. And not all of them are from something you did wrong.

Consumers have protections under the law regarding their credit reports — which is where credit scores and credit problems are listed for lenders to check before offering you credit. Errors on a credit report can drop your credit score, making it harder to get a loan, credit card, rent an apartment, or qualify for insurance coverage, among other things.

The main law that protects consumers from credit errors is the Fair Credit Reporting Act, or FCRA. Here are some of the rights you have under this law and how to use it to protect your credit:

View credit reports

Fair Credit Reporting ActThe FCRA entitles you to review your credit file from each of the three main credit bureaus for free once every 12 months. You can do one check every four months from each of the three — Equifax, Experian and TransUnion — if you really want to be on top of it.

Start by going to AnnualCreditReport.com to request your credit file online. Only use that website and don’t use a copycat site that charges fees for what should be a free service. You’ll need to verify your identity to get online access. You can also request your credit file through an automated phone system or the mail.

The FCRA applies to all consumer reporting agencies. You can also look at reports from other consumer reporting agencies that collect noncredit information about you. These include rent payments, insurance claims, employers and utility companies. The Consumer Financial Protection Bureau lists the reporting companies and how to request a free report from each.

Check your credit score

The law allows you to request a credit score, though it’s legal for credit agencies and other businesses to charge you a fee for this service. Some credit cards provide scores for free, so check with your credit card issuer first.

A credit score isn’t the same as a credit report. Information in a credit report determines a credit score, and each credit bureau can use a different scoring model that requires it to provide different information. You have different credit scores, depending on which factors are weighed more heavily.

Monitoring your credit is vital. Make sure that you review your credit report for any inaccuracies.

Know who can view your credit report

The FCRA doesn’t allow a credit reporting agency to share your credit file with someone who doesn’t have a valid need. Some inquiries, such as from a potential employer or landlord, require your written consent. And, they can only check your credit report, not your credit score.

The credit reporting agencies can share your credit report for legitimate reasons, such as when you’re applying for credit, insurance, housing or with a current creditor.

Disputing errors

Getting a credit report in your hands can lead to all sorts of eye-opening concerns. Anything that’s listed as negative should be checked for accuracy. Here are some things to look out for:

Eviction that wasn’t legal.
Creditor listed that you didn’t have an account with.
Loan default.
Wrong name.
Wrong address.
Wrong Social Security Number.
Incorrect loan balance.
Closed account reported as open.
A loan you didn’t initiate.

Some errors may be simple to resolve and others you may need to do more research on before disputing them to ensure they’re incorrect.

For example, you may not recognize the name of a creditor and assume you don’t have an account with them. But it may just be a store credit card you recently applied for that is listed by the issuing bank’s name. Or maybe a home or auto loan was sold to a new loan servicer.

Other errors could be reason to suspect identity theft, or there could just be wrong information that’s bringing down your credit score.

If you suspect identity theft, such as someone taking out a credit card in your name, then file a police report and report it to your credit card company and the credit reporting agencies.

To dispute erroneous information, use certified mail to send the credit bureau a letter and copies of documents explaining the error. If a loan still shows an outstanding balance and you have written proof that it was paid off, for example, send a copy to the credit agency.

The Federal Trade Commission has a simple sample letter to dispute errors on your credit report.

Credit agencies have 30 days to investigate and respond to your dispute, unless they deem it frivolous.

If it corrects an error, it must send you a free copy of your credit report through AnnualCreditReport.com so you can see that the corrections have been made.

A time limit to negative information

The FCRA doesn’t allow credit bureaus to report negative information that’s more than seven years old, though it allows some forms of bankruptcy to remain on a credit report for 10 years.

There’s also a time limit for positive credit information such as on-time payments and low balances — up to 10 years after the last date of activity on the account.

Rejections based on credit report

If your application for credit, job, insurance or housing has been denied because of information in your credit report, the law gives you the right to know this information.

The landlord, employer or other entity that denied your application must notify you and give you the name, address and phone number of the credit reporting agency that provided the information.

The FCRA allows you to get a free copy of your credit report from that reporting agency within 60 days of the action against you. That’s in addition to the three free credit reports allowed annually.

To best deal with a potential rejection ahead of time, it’s smart to check your credit report before applying for credit, rental unit or related use of your credit report and check it for errors. Give yourself enough time to fix them.

Go to court

If these actions or a complaint with the CFPB doesn’t resolve your dispute, you may be able to sue for damages in state or federal court. You can sue a credit reporting agency or related parties for violating any of the above rights.

However, it’s worth knowing that your right to legal action doesn’t start until after the creditor or credit reporting agency has been notified of an error and has a chance to fix it. In other words, you’ll only be awarded damages if the adverse action happened after you reported the error.

So if you didn’t get approved for a mortgage because of a mistake on your credit report, it’s unlikely you’ll be compensated for losing out on the house if you lost out on it before reporting the mistake.

The post How To Use The Fair Credit Reporting Act To Your Advantage appeared first on Better Credit Blog | Credit Help For Bad Credit.

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Credit Reports: What You Need to Know

October 11, 2019CreditBy toptierfinancial

Credit Reports: What You Need to Know - Pinterest graphic

Nearly half of Americans believe a credit score and a credit report are the same thing, according to a study by the American Bankers Association. That’s a big problem because it means many of us are seriously misinformed about how the credit system works.

Since credit is such an integral part of our financial ecosystem, it affects nearly all of us at some point in our lives. Your credit health can determine not only your access to credit and the cost of using credit but also employment opportunities, housing options, and more. Not understanding how credit works, therefore, can have serious consequences.

We want to help address this problem by making it easy to understand what your credit report is and why it’s important, the difference between your credit report and credit score, how to get a free credit report, and how to dispute errors on your credit report.

What Is a Credit Report and Why Is It Important?

A credit report is a detailed report on your credit history prepared by a credit reporting agency, also known as a credit bureau. The three main credit bureaus are Experian, Equifax, and TransUnion, and we’ll discuss each below. What is in your credit report can be different for each bureau, since they are private companies that do not share information.

What Is in a Credit Report?

Credit reports contain identifying information such as your name, social security number, and current and previous addresses. They also contain a detailed summary of your credit history, which includes items such as the following:

Credit reports include a list of your credit accounts and financial records.

Credit reports include a list of your credit accounts and financial records.

A list of current and past tradelines (credit accounts), along with the date opened, credit limit, balance, and payment history of each account
Inquiries into your credit history
Public records of bankruptcies, foreclosures, tax liens, etc.
Accounts in collections

How Far Back Do Credit Reports Go?

The information in your credit report usually goes back about 7-10 years.
Current accounts should show up on your credit report as long as they are open.
Negative information, such as collections, will fall off your credit report seven years after the delinquency occurred.
Closed accounts that were closed in good standing fall of your credit report in 10-11 years.

What Is the Difference Between a Credit Report and a Credit Score?

Credit Report
Credit Score

Prepared by the three major credit bureaus
Many different credit scores

A list of all your credit accounts and related personal information
A three-digit number between 300 and 850 meant to represent your creditworthiness

Information in your credit report is used to calculate your credit score
Reflects the information in your credit report

You are legally entitled to get a free credit report from each bureau once a year
You are not legally entitled to check your credit score for free (although some credit card companies may offer this to customers)

Does not include your credit score
Does not include information on your credit history

Does Checking My Credit Report Hurt My Score?

While this is a common misconception, you can rest assured that checking your credit report won’t lower your credit score. Checking your own credit is what’s known as a “soft inquiry” or “soft pull,” which doesn’t hurt your credit. “Hard” inquiries can ding your score, but these are used by creditors when making lending decisions, not for checking your own credit report.

How to Get a Free Credit Report

By law, everyone is entitled to receive one free credit report from each of the three major credit bureaus once every 12 months. You can order all three at the same time or order each individual report one at a time.

Some people like to spread them out and get a free credit report from a different bureau every four months so that they can regularly check their credit reports for errors and inconsistencies. Each credit bureau is a private, for-profit company, and they don’t share information, so you could have errors on one of your credit reports but not the others.

Free credit report and score from CreditKarma

Free credit monitoring websites like CreditKarma provide free credit reports and scores.

The best way to check your credit report for free is to order your free credit report from annualcreditreport.com. In fact, this is the only website authorized to provide the annual free credit report you are legally entitled to, according to the FTC—so beware of other sites claiming to offer free credit reports or free trials, especially if they ask for your credit card information.

However, there are now several free credit report websites that earn money through advertising and are thereby able to offer free credit monitoring services. Sites that offer completely free credit reports include:

CreditKarma
CreditSesame
WalletHub
Bankrate

When Else Can I Get a Free Credit Report?

You can also check your credit report for free if you have been denied credit because of the information in your credit report. You are entitled to get a free credit report from the bureau who provided the report that the lender used to make their decision.

You are entitled to a free credit report if you are unemployed and applying for jobs.

You are entitled to a free credit report if you are unemployed and applying for jobs.

For example, if the lender who denied you credit looked at your Experian credit report, you can request your Experian free credit report. The adverse action letter informing you of the reason for your denial should have instructions on how to request your free credit report.

There are a few more cases in which you can qualify for an additional free credit report, including:

If you are unemployed and planning to look for work.
If you receive government assistance.
If you are a victim of identity theft.

Although experts recommend checking your credit reports at least once a year, the Consumer Financial Protection Bureau (CFPB) estimates that less than one in five consumers get copies of their credit reports each year. Don’t miss out on this opportunity to get your credit report for free so you can make sure your credit report is accurate and identify any problems before they get worse.

Can I Get a Free Credit Report Directly From the Credit Bureaus?

You can also get your credit report directly from each of the credit bureaus, but you may have to pay a fee if you go this route. If you want to get a credit report for free, your best bet is to order from annualcreditreport.com.

However, some people may want to check their credit reports more than once a year, so we’ll discuss additional options for obtaining your credit reports below.

Experian Credit Report

You can get a free Experian credit report that refreshes every 30 days through Experian’s website. They also offer paid options that come with additional information. The Experian free credit report does not include a free credit score.

Equifax Credit Report
You can get your TransUnion and Equifax free credit reports on third-party websites.

You can get your TransUnion and Equifax free credit reports on third-party websites.

While you cannot get an Equifax free credit report from the bureau directly, you can pay a fee to access your Equifax credit report and score. To get your Equifax credit report, visit their website.

You can also view your free Equifax credit report and score through CreditKarma, which updates once a week.

TransUnion Credit Report

Accessing your TransUnion credit report requires signing up for a paid monthly subscription service with TransUnion. However, you can get a free TransUnion credit report from CreditKarma or NerdWallet.

How to Dispute Errors on Your Credit Report

Unfortunately, studies have shown that as many as one in five consumers may have errors on their credit reports, and about one in 20 have errors that are significant enough to potentially lower their credit scores. This means it is crucial to monitor your credit reports regularly and be aware of how to fix errors on your credit report.

The credit bureaus offer online forms to submit credit report disputes, but experts warn against using this option, as it does not allow you to write a detailed explanation of why you are disputing the information or provide sufficient supporting evidence. This leaves room for the credit reporting agency to deny your claim because you did not provide enough information.

The best way to dispute a credit report is to write a detailed credit report dispute letter and mail it to the bureau along with plenty of documentation verifying your identity and supporting your claim.

Once a dispute has been filed, the bureaus typically have 30 days to investigate the claim. If they verify that the item is accurate, it will remain on your report; if not, they must either update the item with the correct information or delete it entirely.

Errors on your credit report can, unfortunately, lead to bad credit. For this reason, checking your credit report regularly and disputing any errors is an essential step in maintaining your financial health.

Check your credit report for errors regularly.

It’s important to check your credit report for errors regularly.

Check out additional tips in our article about do-it-yourself credit repair.

If you have a lot of errors on your credit report or if you have been the victim of identity theft, it may also be worth considering hiring a reputable credit repair service to assist you in the dispute process.

Which Errors Can You Dispute?

The law requires that the information in your credit reports must be accurate, complete, timely, and verifiable. Anything that does not meet these requirements can be disputed.

Technically, you can dispute anything in your credit file, but that doesn’t mean you should try to dispute things that you know are accurate. The credit bureaus are allowed to ignore “frivolous” claims, and if they verify something to be true, it will stay on your credit report.

For more tips on how to dispute a credit report, check out this article from creditcards.com.

Quick Credit Report Facts

A credit report is a detailed report on your credit history prepared by one of the credit bureaus: Experian, Equifax, and TransUnion.
The information in your credit report is used to calculate your credit score.
Checking your credit report does not hurt your score.
You are entitled to a free credit report from each of the three bureaus once a year, which you can order from annualcreditreport.com.
You can dispute errors on your credit report by mailing a credit report dispute letter and supporting documentation to the credit bureau.

Read more: tradelinesupply.com

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