Credit reporting laws

01.07.2009 | Author: admin | Posted in Credit

Because most consumers use credit to pay for everything from their weekly entertainment to their homes, the extension and receipt of credit are of great value. If credit problems impair your capacity to obtain credit, you may be tempted to search the help of credit repair companies (also called “credit clinics” or “credit doctors”), that claim to improve your credit standing or erase bad credit. Till doing business with any credit repair firm, it is significant for you to become familiar with the federal and state laws that regulate credit repair and credit reports.
Knowledge of these laws will help you determine if you must spend money to hire a credit repair firm, or do the work yourself for free.

Definitions

Credit Bureau or Consumer Reporting Agency - A personal firm that compiles your credit information, as reported by your creditors or from popular records, and reports or sells that information to creditors. There are a little big national credit bureaus, as well as local ones.
Credit Message - A message compiled and issued by a credit bureau which lists all activity which may affect your credit standing, including your creditors, the amount of your debts, your credit limits, late payments, defaults, charge-offs, repossessions and bankruptcies.
Credit Repair Firm - Any face or business that, for a fee, advertises or claims they can improve your credit record or message.

Credit reporting laws

The Federal Fair Credit Reporting Act and Colorado Consumer Credit Reporting Act regulate what appears on your credit message, for how long, and how you can obtain and correct any errors in the message. You can get a copy of your credit message, and information on how to correct the message, from any credit bureau. Colorado law requires credit bureaus to provide you with one free copy of your credit message every year upon your request. In addition, a credit bureau should send you a announcement once a year if negative information was added to your credit message of if there were ten or more inquiries on your credit message. An inquiry occurs when a creditor reviews your credit message because you applied for credit or a creditor wants to sentence you a credit product. You can stop unsolicited credit offers based on your credit message by calling (888) 567-8688.
To receive a copy of your credit message, credit bureaus typically request your full name, address, social security number, date of birth, seat of employment, and a copy of your driver’s license. The credit bureaus already possess most of this information, as reported by your creditors, but need you to verify it to create determined they provide you with the correct message. The three major credit bureaus are:

If you are denied credit based on the contents of a credit message, the creditor should give you the name and address of the credit bureau that provided the message. If you contact the credit bureau within 60 days after the creditor’s notification, the credit bureau should provide a free copy of your credit message.
After receiving your credit message, do the next:

  • Review the credit message for inaccurate information. If you find a mistake or error, write to the credit bureau, explain the problem, and request the correction of your message. Include copies of canceled checks, receipts, or another documents to verify payment or identification with the correction request.
  • Contact your creditors directly, to ensure that their records are correct. This may be other way to correct inaccurate information on your credit message.
  • Remember, credit bureaus should remove accurate information after seven years and bankruptcies after ten years old. Otherwise, credit bureaus do not have to remove accurate information, no matter how negative.
  • When a credit bureau receives your correction request, it should investigate and remove or correct any inaccurate information that is not verified within a reasonable period of time, generally 30 days. Note, a credit bureau may ignore frivolous correction requests.
  • At your request, the credit bureau will send a corrected copy of your message to anyone who received the wrong version within the past six months.
  • If, after the investigation, you are not satisfied, you can file an explanation with the credit bureau that will become part of your message.

    • Colorado credit services organization act

    The Colorado Credit Services Organization Act was adopted to provide consumers with information necessary to create an intelligent decision regarding the purchase of credit repair services and protect the popular from unfair or deceptive advertising and business practices. If you are tempted to use a credit repair firm, create certain that the firm is complying with the law.
    Till you sign a credit repair agreement, the credit repair firm should you disclose in writing:

  • How you can correct your credit message yourself under Colorado and federal law;
  • Your right to cancel the agreement for any cause within five working days (a detachable cancellation form should be included);
  • The total fee, conditions of payments, and a full and detailed description of the services to be performed;
  • A copy of your credit message, with the wrong information indicated.

    • Credit repair companies are prohibiting from collecting any advance fees another than those connected with the price of obtaining credit reports.
    Beware of the next credit repair practices:

  • Promises to remove any negative information or bankruptcies from your credit message. This will occur only through the passage of time. Credit repair companies may be able to temporarily delete information, but once it is re-verified, it may again appear on your credit message.
  • Requests for advance payment for services, including by post-dated checks. This is illegal under federal law and it is difficult to recover any money paid in advance.
  • Promises to improve your credit standing by showing you how to obtain and use a tax identification number or a false social security number in seat of your actual social security number. This may be illegal.

    Reminders

  • You can correct any error in your credit message yourself, without paying a fee, by contacting the credit bureaus directly.
  • do not pay advance fees to a credit repair firm.
  • Do not contact with or send money to an out-of state credit repair firm. Because it is difficult to enforce Colorado law against out-of-state companies, it may be impossible to recover your money, if problems arise.
  • If you solve to use a credit repair firm, hold a record of all payments you create by keeping the canceled checks, or getting receipts for payments by cash or money order.

    How to handle problems

    Credit Problems - If bad credit is affecting your capacity to obtain credit, try to negotiate with your creditors to accept less payments or waive interest. Consult a credit counseling service or an attorney for help in negotiating with creditors. Follow all payment arrangements. Call or write your creditors, if you have to pay late.
    Debt Collection Problems - If your account is assigned to a collection agency, try to negotiate with the collection agency for favorable payment arrangements. For more information concerning state collection laws, or to message problems with a collection agency, contact the Credit Crunch Fix

    Credit Repair Problems

    If a credit repair firm is violating your rights under Colorado law, you can sue the business, and may be entitled to recover damages. For more information concerning credit repair, contact Credit Crunch Fix

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