The following is a general overview of the laws regarding Consumer Reporting Agencies (CRA) and Credit Repair Service Organizations. It is provided for information only and is not intended as specific legal advice for a particular situation.
The Federal Fair Credit Reporting Act (FCRA) and a comparable Texas law, Business & Commerce Code Chapter 20, require that the manner in which credit reporting agencies (CRA) provide information be fair and equitable to the consumer with regard to the confidentiality, accuracy, and proper use of such information. Complaints under the FCRA can be sent to the Federal Trade Commission (FTC).
A consumer credit report is a record of an individual’s credit payment history. It’s main purpose is to help creditors decide whether to grant you credit. The report contains information such as your name, last reported address, previous address, marital status, social security number, date of birth, spouse’s name, number of dependents, and employment information. It has a listing of your credit accounts, the amount of the last payment, credit limit, account balance and the timeliness of the payments. There is a listing of public record information such as judgments, tax liens and bankruptcies. It will have an inquiry section which notes all those creditors which have reviewed a copy of the report. No medical information can be given without your consent.
Investigative reports include information that is not found on a regular report, such as comments about your character, general reputation, religion, mode of living, and personal characteristics. This type of report can not be compiled unless you are notified that such a report may be made and a disclosure is mailed to you within 3 days after an investigative report is requested.
The laws grant access to companies or individuals in connection with the following: application for a government license; a credit transaction or other legitimate business need, such as landlords or businesses; underwriting insurance; a court order; potential investors or existing obligations; head of child support enforcement agency; or your written instructions. The FBI can have access for counterintelligence investigations. Employers must get written permission and certify to the credit reporting agency that it will use the report for a permissible purpose.
Anyone who obtains a report under false pretenses can be imprisoned for two years and fined. State law for willful violations permits the Texas Attorney General to sue for $2,000 per violation or a consumer to sue for treble actual damages. You can opt out and your name will be removed for lists which are utilized for marketing by credit cards issuers and insurance companies. Please refer to the phone numbers at the end of this document.
Credit bureaus must have toll-free numbers for consumers to contact them. The phones must be answered by a live person. If a creditor, employer, or insurer has taken an adverse action based on information in a credit report, the creditor must provide the name, address and telephone number of the CRA. The CRA must provide you with a free copy of the report at your request within 60 days of the adverse action. You are entitled to a free report once a year. You can order your free annual credit report online at www.annualcreditreport.com , by calling 1-877-322-8228, or by completing the Annual Credit Report Request Form and mailing it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.
You are also entitled to one free report a year if you are unemployed and plan to look for a job within 60 days; if you’re on welfare; or if your report is inaccurate because of fraud, including identity theft. Otherwise, a consumer reporting company may charge you up to $9.50 for another copy of your report within a 12-month period.
When you order, you need to provide your name, address, social security number, and date of birth. To verify your identity, you may need to provide some information that only you would know, like the amount of your monthly mortgage payment.
To buy a copy of your report, contact:
- Equifax: 800-685-1111; www.equifax.com
- Experian: 888-397-3742; www.experian.com
- Trans Union: 800-916-8800; www.transunion.com
If you tell the CRA that your file has inaccurate information, the CRA must investigate your claim within 30 days. Generally, the CRA will present your claim to the one who provided the information. If the source verifies that the information is accurate, the CRA does not have to remove it. You can then file a statement of dispute setting forth the nature of the dispute. As long as it is not deemed frivolous, the CRA must note that an item is disputed and provide a copy of your statement to creditors. If the CRA can not verify the accuracy of the disputed information, or if it is found to be incomplete, it must be deleted. It can not be reinserted unless the informant provides verification.
If you tell a creditor that a debt is disputed, the creditor must notify the CRA of the dispute when it reports the information. Creditors that continue to report incorrect information may be sued or taken to arbitration.
Bankruptcies remain in reports for ten (10) years. By policy of CRA’s, a Chapter 13 bankruptcy which has been successfully completed will be removed after seven (7) years. Suits, judgments, paid tax liens, charged-off debts, and any other adverse information can remain in a report for seven (7) years. There is no time limit on reporting criminal convictions. CRA’s use the date of original delinquency, or, in the case of public records, the date of filing to determine when negative information is deleted. Positive information remains on your account indefinitely.
The Federal Trade Commission (FTC) cautions consumers to be wary of the companies that make claims regarding credit repair. Credit Services Organizations (CSO) can not do anything that a consumer could not easily do himself for very little cost. CSO’s must be registered and post a $10,000 bond to do business with Texas residents. Without this bond, the CSO can not advertise its services or charge any fee before it has completed all the services it promises to provide. The contract must be in writing and the consumer has 3 days after signing to cancel. The contract must contain a disclosure statement advising the consumers of their rights and provide information about the bond. It is considered to be a deceptive practice to guarantee to erase bad credit without informing a consumer this can only be done for obsolete or incorrect data.
If you have a negative credit history and need help dealing with your debts, you may want to contact the Consumer Credit Counseling Services. This nonprofit organization has more than 200 offices located in 44 states. For little cost to you, CCCS counselors will work with your creditors to establish a repayment plan that will satisfy both you and your creditors. CCCS can also help you set up a realistic budget and plan for the future. To find the nearest CCS office call:
Consumer Credit Counseling Services 1-800-251-CCCS (2227)
Other Useful Telephone Numbers & Addresses
- EXPERIAN (formerly TRW) Order report: 888-397-3742
P.O. Box 1240 Allen, TX 75013 www.experian.com
- TRANS UNION CORPORATION Order report: 800-888-4213
P.O. Box 105281 Atlanta, GA 30348 www.transunion.com
- EQUIFAX Order report: 800-685-1111
P.O. Box 740241 Atlanta, Georgia 30374 www.equifax.com
- FEDERAL TRADE COMMISSION: 202-326-3300
Consumer Response Center, Room 130-A Federal Trade Commission,
600 Pennsylvania Avenue N.W. Washington, D.C. 20580 www.ftc.gov/credit