Your Rights and How to Resolve Issues on your Credit Report
You have the right to an Accurate and Complete Report
You have the right to dispute both inaccurate and incomplete information in your credit report. So if, for example, your report correctly states that you were sued for nonpayment of an account, but doesn’t state that you later paid the account in full, you have the right to dispute the incompleteness of this item in your report.
Common Errors to Look for in Your Credit Report
Information that is not yours because of confused names, addresses, etc. Credit reporting agencies may confuse names, addresses, Social Security numbers, or employers. If you have a common name—say, John Brown—your file may contain credit or personal information on other John Browns, John Brownes, or Jon Browns and may lack some of your own credit information. Your file may erroneously contain information on family members with similar names.
Problems because of identity theft.If you have been the victim of identity theft, mixed account information may appear in your credit report.
Information from an ex-spouse.If you have been divorced, your prior spouse’s information may be mixed with yours.
Outdate information. Accounts may still be listed after the legal deadline for removing them from your reports.
Incorrect payment status.The payment status of accounts may be incorrect.
More than one delinquent date on an account.If an account has been transferred to a debt collector, your report may contain more than one date for when the account became delinquent (which triggers how long it may remain in your report).
Wrong notations for closed accounts.Accounts you closed may look as if the creditor closed the account.
Remedied delinquencies not reported as such. Credit reporting agencies often fail to note accounts in which delinquencies have been remedied.
You should carefully review each section of your credit report to determine if it contains incorrect or outdated information. If it does, use, notify the credit bureau in writing. Under the law the credit bureau has 30 days to verify the information to insure that it is correct. If the bureau cannot verify the disputed information, it must be deleted from your credit report.
Use the 100 Word Statement
If you dispute information on a credit report that you believe to be incorrect, the creditor may disagree. If this happens, the information will remain in your credit history. But your efforts don't have to stop there. If you still think the information is wrong, continue to pursue the issue with the creditor. In addition, you should compose a statement of 100 words or less explaining your dispute and send it to all three credit bureaus. The statement will become part of your credit record and will appear on your credit report for as long as the disputed item. You may also use the 100 word statement to explain why you haven't paid an undisputed bill, as long as the reason is true. For example, a divorce, illness, or death in the family may have caused a delay or a break in your scheduled payments.
How to add a 100-word written statement to your credit report
By Melody Warnick
Credit card tips- Written statements on your credit report can help you explain negative items.
- If the statement could portray you as a bad risk, don't submit it.
- Don't expect the statement to be a magic bullet. Some lenders won't even read it.
- Some experts say a statement can make you look proactive in lenders' eyes.
Thanks to a provision of the Fair Credit Reporting Act, when something's amiss with your credit report, you have the right to add a statement to your file about it, either to dispute a mistake or to explain your personal financial debacle. The Big Three credit bureaus limit you to 100 words a pop, but both Experian and TransUnion allow you to add multiple statements to your report; Equifax draws the line at one statement on your credit report at a time.
Do they work? Yes, if ...
Regardless of how much you're allowed to write, a larger question remains: Do the 100-word letters actually work to a consumer's advantage? Theoretically, statements give you more of a voice in your own financial future. Used unwisely, they can do more harm than good.
"It's a good idea to add a statement when you disagree with the results of a dispute," says Rod Griffin, director of public education for Experian. "A statement of dispute allows you to tell your side of the story." Similarly, if medical issues led to late payments, a statement can point out the reason behind the misstep and reassure lenders that you've since regained financial control.
What you don't want to indulge in, says Griffin, are "the things we refer to as 'statements of excuse,' tongue in cheek." Adding, "I went on vacation to Bermuda and forgot to mail the check" to your credit report just confirms that your payment actually was late, for a pretty ridiculous reason. "That won't be helpful," Griffin insists.
When it works
So what's the point of adding a consumer statement? For starters, you may simply feel better after having had your say. "It gives people a feeling of power," says Sember. "You feel like, 'At least I put my side of the story down.'" For someone frustrated by the effects of a negative financial history, that's no small comfort.
Not all lenders will read the statement you slaved over -- but if you're eager to explain why your credit score is so low there is one more option: Grab the loan officer and say it yourself.
"Lenders and landlords-- at least seasoned ones -- can look into a person's eyes and listen with their mind and heart and discern whether or not the applicant is lying or telling the truth," says longtime Ohio lender Timothy Palla. "Often, the consumer's passion and determination have more weight than the problems on a credit report."
The danger, of course, is coming off like a psycho. Palla offers these tips for keeping the conversation polite and effective:
- Practice what you'll say, and get it down to three minutes or fewer. The landlord doesn't have all day, and they are not interested in hearing about a detailed accounting of your past five years.
- Show you've made a good-faith effort to resolve problems and dispute errors.
- Come armed with documentation in case the loan officer asks to see it.
- Don't take "no" personally. Take it as a challenge to clean up your credit so that next time, they'll have to say "yes."
Also, although many lenders rely on computers to determine your creditworthiness, some still do things the old-fashioned way. "With
YourDebt Collection Rights from the Federal Trade commission
If you’re behind in paying your bills, or a creditor’s records mistakenly make it appear that you are, a debt collector may be contacting you.The Federal Trade Commission (FTC), the nation’s consumer protection agency, enforces the Fair Debt Collection Practices Act (FDCPA), which prohibits debt collectors from using abusive, unfair, or deceptive practices to collect from you.Under the FDCPA, a debt collector is someone who regularly collects debts owed to others. This includes collection agencies, lawyers who collect debts on a regular basis, and companies that buy delinquent debts and then try to collect them.
Here are some questions and answers about your rights under the Act.
What types of debts are covered?
The Act covers personal, family, and household debts, including money you owe on a personal credit card account, an auto loan, a medical bill, and your mortgage. The FDCPA doesn’t cover debts you incurred to run a business.
Can a debt collector contact me any time or any place?
No. A debt collector may not contact you at inconvenient times or places, such as before 8 in the morning or after 9 at night, unless you agree to it. And collectors may not contact you at work if they’re told (orally or in writing) that you’re not allowed to get calls there.
How can I stop a debt collector from contacting me?
If a collector contacts you about a debt, you may want to talk to them at least once to see if you can resolve the matter – even if you don’t think you owe the debt, can’t repay it immediately, or think that the collector is contacting you by mistake. If you decide after contacting the debt collector that you don’t want the collector to contact you again, tell the collector – in writing – to stop contacting you. Here’s how to do that:
Make a copy of your letter. Send the original by certified mail, and pay for a “return receipt” so you’ll be able to document what the collector received. Once the collector receives your letter, they may not contact you again, with two exceptions: a collector can contact you to tell you there will be no further contact or to let you know that they or the creditor intend to take a specific action, like filing a lawsuit. Sending such a letter to a debt collector you owe money to does not get rid of the debt, but it should stop the contact. The creditor or the debt collector still can sue you to collect the debt.
Can a debt collector contact anyone else about my debt?
If an attorney is representing you about the debt, the debt collector must contact the attorney, rather than you. If you don’t have an attorney, a collector may contact other people – but only to find out your address, your home phone number, and where you work. Collectors usually are prohibited from contacting third parties more than once. Other than to obtain this location information about you, a debt collector generally is not permitted to discuss your debt with anyone other than you, your spouse, or your attorney.
What does the debt collector have to tell me about the debt?
Every collector must send you a written “validation notice” telling you how much money you owe within five days after they first contact you. This notice also must include the name of the creditor to whom you owe the money, and how to proceed if you don’t think you owe the money.
Can a debt collector keep contacting me if I don’t think I owe any money?
If you send the debt collector a letter stating that you don’t owe any or all of the money, or asking for verification of the debt, that collector must stop contacting you. You have to send that letter within 30 days after you receive the validation notice. But a collector can begin contacting you again if it sends you written verification of the debt, like a copy of a bill for the amount you owe.
What practices are off limits for debt collectors?
Harassment.Debt collectors may not harass, oppress, or abuse you or any third parties they contact. For example, they may not:
- use threats of violence or harm;
- publish a list of names of people who refuse to pay their debts (but they can give this information to the credit reporting companies);
- use obscene or profane language; or
- Repeatedly use the phone to annoy someone.
False statements.Debt collectors may not lie when they are trying to collect a debt. For example, they may not:
- falsely claim that they are attorneys or government representatives;
- falsely claim that you have committed a crime;
- falsely represent that they operate or work for a credit reporting company;
- misrepresent the amount you owe;
- indicate that papers they send you are legal forms if they aren’t; or
- indicate that papers they send to you aren’t legal forms if they are.
Debt collectors also are prohibited from saying that:
- you will be arrested if you don’t pay your debt;
- they’ll seize, garnish, attach, or sell your property or wages unless they are permitted by law to take the action and intend to do so; or
- legal action will be taken against you, if doing so would be illegal or if they don’t intend to take the action.
Debt collectors may not:
- give false credit information about you to anyone, including a credit reporting company;
- send you anything that looks like an official document from a court or government agency if it isn’t; or
- use a false company name.
Unfair practices.Debt collectors may not engage in unfair practices when they try to collect a debt. For example, they may not:
- try to collect any interest, fee, or other charge on top of the amount you owe unless the contract that created your debt – or your state law – allows the charge;
- deposit a post-dated check early;
- take or threaten to take your property unless it can be done legally; or
- contact you by postcard.
Can I control which debts my payments apply to?
Yes. If a debt collector is trying to collect more than one debt from you, the collector must apply any payment you make to the debt you select. Equally important, a debt collector may not apply a payment to a debt you don’t think you owe.
Can a debt collector garnish my bank account or my wages?
If you don’t pay a debt, a creditor or its debt collector generally can sue you to collect. If they win, the court will enter a judgment against you. The judgment states the amount of money you owe, and allows the creditor or collector to get a garnishment order against you, directing a third party, like your bank, to turn over funds from your account to pay the debt.
Wage garnishment happens when your employer withholds part of your compensation to pay your debts. Your wages usually can be garnished only as the result of a court order. Don’t ignore a lawsuit summons. If you do, you lose the opportunity to fight a wage garnishment.
Can federal benefits be garnished?
Many federal benefits are exempt from garnishment, including:
- Social Security Benefits
- Supplemental Security Income (SSI) Benefits
- Veterans’ Benefits
- Civil Service and Federal Retirement and Disability Benefits
- Service Members’ Pay
- Military Annuities and Survivors’ Benefits
- Student Assistance
- Railroad Retirement Benefits
- Merchant Seamen Wages
- Longshoremen’s and Harbor Workers’ Death and Disability Benefits
- Foreign Service Retirement and Disability Benefits
- Compensation for Injury, Death, or Detention of Employees of U.S. Contractors Outside the U.S.
- Federal Emergency Management Agency Federal Disaster Assistance
But federal benefits may be garnished under certain circumstances, including to pay delinquent taxes, alimony, child support, or student loans.
Do I have any recourse if I think a debt collector has violated the law?
You have the right to sue a collector in a state or federal court within one year from the date the law was violated. If you win, the judge can require the collector to pay you for any damages you can prove you suffered because of the illegal collection practices, like lost wages and medical bills. The judge can require the debt collector to pay you up to $1,000, even if you can’t prove that you suffered actual damages. You also can be reimbursed for your attorney’s fees and court costs. A group of people also may sue a debt collector as part of a class action lawsuit and recover money for damages up to $500,000, or one percent of the collector’s net worth, whichever amount is lower. Even if a debt collector violates the FDCPA in trying to collect a debt, the debt does not go away if you owe it.
What should I do if a debt collector sues me?
If a debt collector files a lawsuit against you to collect a debt, respond to the lawsuit, either personally or through your lawyer, by the date specified in the court papers to preserve your rights.
Where do I report a debt collector for an alleged violation?
Report any problems you have with a debt collector to your state Attorney General’s office (naag.org) and the Federal Trade Commission (ftc.gov). Many states have their own debt collection laws that are different from the federal Fair Debt Collection Practices Act. Your Attorney General’s office can help you determine your rights under your state’s law.