Understanding The Fair Credit Reporting Act

Do you think that the Fair Credit Reporting Act doesn't affect you? If you've ever bought or sold something, or plan on buying something in the future, you need to know a few things. The Fair Credit Reporting Act was established to protect consumers, but it also helps legitimate debt collectors do their job effectively and efficiently too. A reputable debt collector/collection agency wants to get things right too, and sometimes there can be a disconnect between an original creditor and the debt collector you may be working with. This usually is NOT an error on the part of the debt collector or caused by the debt collector (or maybe I'm just biased because I'm so fond of the debt collection industry).

Billing errors and balance problems can happen if a payment is made and not applied correctly, made to the original creditor but not reported to the collection agency who then reports to the credit bureaus, etc...and another common balance problem occurs when a judgment is taken on a past due balance. The reason for the balance problem with a judgment is that additional court costs, attorney fees, filing fees, satisfaction fees, etc...are added to the amount that was originally due. A consumer cannot simply take the original balance and subtract the payments and assume that they have proper accounting.

Regardless of the situation or the reason, if you feel that your balance is inaccurate, the Fair Credit Report Act allows you the opportunity to view your credit report (you can do this free each year by logging in at: https://www.annualcreditreport.com/cra/index ). And you can dispute any balances you think are inaccurate or any accounts that you are unfamiliar with. Your credit report comes from Equifax, Experian, and TransUnion but is available to you at annualcreditreport.com - inaccuracies should be disputed at each individual credit bureau and annualcreditreport.com has an online process for disputing. Also - don't be surprised if your information and your credit score is different at each of the credit bureaus. Each bureau has their own policies and methodology, so they should have similar information but it may not be identical.

Before you dispute a debt, make sure you have the following information:

*A summary of what it is you are disputing ("not mine" isn't nearly as helpful as "I've never been to Texas so I'm not sure how the bill for Texas State Emergency Medical could be mine"

*The specifics of what debt you are disputing (from a copy of your credit report either pulled yourself from annualcreditreport.com or given to you by a lender) - including account number, creditor name, amount, etc...

*Your identifying information (full name, address, social security number, date of birth...and previous addresses if you've moved often in the last seven years) to confirm that it is YOU who is requesting the information

After you dispute a debt under the Fair Credit Reporting Act, the collection agency or creditor (data furnisher) that placed the account on your credit file will be notified and will need to conduct an investigation to look into your dispute and verify the balance. Once they have reviewed your dispute, they need to report back to the credit bureau (credit reporting agency). If the data furnisher is not able to provide proof of the debt or proof of the balance, the item will be removed from your credit file.

Keep in mind that in the opening of today's blog, I said: The Fair Credit Reporting Act was established to protect consumers, but it also helps legitimate debt collectors do their job effectively and efficiently too. That being said, know that the Fair Credit Reporting Act does not look favorably upon frivolous disputes. do not waste anyone's time being vague. If you do not provide sufficient information to support your dispute, the data furnisher may not be required to investigate your claim. If you have made the same dispute before and your information hasn't changed, they may not be required to investigate (ie: if you didn't like the answer the first time, don't send back the same dispute).

For more information, see the ACA "Ask Doctor Debt" website: http://www.askdoctordebt.com/13611-Dispute-a-debt

Or Contact the credit bureaus directly:

http://www.equifax.com/home/en_us


http://www.experian.com/



http://www.transunion.com/