Credit Repair specialist California

Individuals are forever inclined to have control over their finances and consider credit to be a vital part of their financial planning. Credit or leverage means a formal contract between a buyer and seller in which the buyer takes something from the seller and promises to return it within a stipulated time. Credit also means creditworthiness, which means being in a financial position that makes one reliable enough to receive financial credit. Credit helps people in achieving their desired goals and ambitions. However, whether they can obtain credit or not depends on their creditworthiness. Thus, applying for a credit card, home loan, or education loan, the person’s creditworthiness is the key to everything.

Creditworthiness should not be confused with the capacity to pay.  While a person’s income and assets decide his paying capacity, creditworthiness is associated with willingness to pay. There might be many people with high incomes, but they don’t have good track records of managing credit. They could have made late payments or abstained from making full payments. These gestures negatively impact their creditworthiness.

The metric to judge a person’s creditworthiness is credit scores. It is a financial tool used by lenders or banks to evaluate the risk associated with providing credit to an individual, and hence, it shapes their decision regarding extending credit. Credit scores are assigned based on information collected by credit reporting agencies and credit bureaus. The information gathered includes payment history, the amount owed, length of credit history, and types of credit. The credit scores are in the range from 300 to 850 and are derived using the FICO (Fair Isaac Corporation) credit scoring. Credit reports are created based on this, which gives a detailed breakdown of any person’s credit history. There are three major credit reporting agencies in the United States which assign credit scores. These are Equifax, Experian, and TransUnion.

A key aspect to discuss in this regard is the Fair Credit Reporting Act (FCRA). It not only regulates the consumer credit information but also gives guidelines regarding who is authorized to access the credit reports. This law has existed since 1970 and validates the credit information that each of the credit reporting agencies provides.  It has specific guidelines on the type of information collected (bill payment history, current debts, past loans, employment information), time of collection of information by credit bureaus, and timespan till which they can keep the information with them. FCRA also regulates how customers can access their data. It gives individuals the following rights regarding their credit information:

·      Access to one’s credit report – A credit reporting agency is obliged to provide access to an individual’s credit report on request, twice a year. The person needs to present proper identification for gaining access

·        Protected Access – Access to credit reports is granted only to particular institutions. These institutions include banks, insurance companies, and landlords

·        Accurate reporting – The credit reporting agency is obliged to examine, verify or remove the information on discovering any fraudulent information in the credit report

·         Privacy of medical information – Credit bureaus have to keep an individual’s medical information private

·     Data privacy – Credit bureaus can’t publish personal account numbers or other such confidential information

·         Receive notifications regarding negative credit information

·         Right to seek damages – An individual is authorized to sue the credit reporting agency which has violated FCRA and seek damages

As discussed above, FICO scores help to ascertain the creditworthiness of individuals. Generally, a credit score of more than 740 is a good one, and the person with such a credit score is creditworthy. Thus, he can easily obtain optimum interest rates and favorable terms of credit. For credit scores between 580 and 740, individuals would be able to secure loans or credit. However, the interest rate would not be optimum, and the interest rate would increase while the credit score declines. Finally, individuals with a credit score lower than 580 would face difficulty in getting credit at suitable interest rates.

Credit scores are affected by a variety of factors. Hence, it is likely that the credit scores might get hampered. With individuals undertaking various transactions, they end up weakening their credit rating or end up getting a bad credit score. Individuals facing financial distress might end up making late payments or missing out on credit card payment dates. All this leads to derogatory remarks on a person’s credit report, thus weakening the credit score. Given below is a list of such factors:

·         Late Payments – As discussed before, making the payment for credit received after the due date leads to a derogatory mark in the credit report. This increases in severity after 30 days have passed since the due date and the payment is still pending

·       An account in charge-off – Once a borrower has made late payments or missed the payments, the creditor might not feel assured that the borrower is going to pay back the money. Thus, he writes off or charges-off the account owing to tax reasons. A third-party collections agency takes charge, which tries to get the money from the borrower

·       Bankruptcy – In this situation, a borrower might pay back some or none of the credit amount, and it leads to a negative mark on the credit score

·        Civil Judgement – Losing a civil lawsuit will show as a derogatory mark on an individual’s credit score

·       Debt Settlement – This is when the borrower can pay back only a part of the debt owed to the creditor prior an agreement with the creditor

·      Foreclosure – Falling behind severely on the mortgage payments can lead to foreclosure, which causes the bank to attempt a forced sale of the borrower’s home, which then acts as collateral for the loan

·     Tax Lien – Failing to pay taxes will lead to the government placing a lien (claim against the borrower’s property) to recover the debt. Naturally, this would weaken the credit score of an individual

Thus, with our elaborate discussion on the need to maintain creditworthiness and the various ways in which credit scores can be negatively affected, it is of prime importance that we address the issue of credit repair or credit restoration.

Thus, the role of a credit agent or credit repair specialist becomes very crucial. Although a borrower himself can do credit repair, this may not always have the desired impact. Credit repair requires complete knowledge of the credit reports and how to read and analyze them. One should be well versed in laws related to credit reporting agencies. Also, at times one does not realize where the problem lies or how to rectify it. The inability to allocate proper time to credit repair is probably a big reason behind individuals hiring credit repair specialists.

Based on a person’s credit score and credit report, the credit repair specialist can provide adequate suggestions to a person to improve his creditworthiness. As discussed above, there can be various reasons for negative or derogatory remarks on a person’s credit score. The credit repair specialist analyses a person’s current financial position & assets and accordingly suggests how to handle those negative marks. Some of the recommendations might involve disputing the negative marks, paying off the debt, negotiating the removal of the derogatory marks, and settling the credit reporting time limit. Handling all these negative items requires proper correspondence with credit bureaus and debt collection agencies. The credit agents have to send letters on behalf of the clients with concise information about the client’s credit situation. Protecting a client’s privacy is the topmost priority for any credit repair specialist.

Moving on to some of the other roles of a credit repair consultant, we have the following:

a)   The consultants should ensure that their clients know the rights available to them to dispute information on their own. Also, they educate clients about the FCRA

b)  A credit repair specialist should review the credit report from all three major credit reporting agencies mentioned above so that it is easy to track and verify any errors present in any one credit report

c)   The credit repair specialists also monitor the credit profile and help in building a sound financial future. 24x7 monitoring of the credit profile notifies the individual about the current changes in the report and gives them information about how the changes affect the credit score

d)  As it is equally important to maintain a good credit score, the credit repair specialists guide the individuals in building action items and carving out a trajectory to continue having a good credit score

The credit repair specialists, on behalf of their companies, draft a legal contract for their clients before starting any work. They should have a proper understanding of government agencies along with knowledge of the state’s credit repair laws. 

There are various credit repair companies and credit repair specialist California. The belief is that the main focus of these companies is to provide the best credit-related services to their customers. However, there have been many cases of credit repair agencies extorting money from customers or using false promises to lure them into traps. It led to the Bureau of Consumer Financial Protection suing many credit repair companies for deceptive marketing practices.

Thus, when dozens of credit repair companies claim to provide excellent service, it becomes tricky to pick the right one. An individual should diligently crosscheck all relevant details regarding a credit repair company before hiring them.

A few attributes that should be mandatorily present in a credit restoration company are:

a)   Good Rating – Better Business Bureau is an organization that helps customers in finding reputable service providers. Thus, if it reviews a particular credit repair company and provides a positive review & good rating, it becomes trustworthy and can be appointed. The credit repair companies should also have legitimate reviews from third parties. It can be in the form of testimonials, reviews, or blogs on their website. The validation from multiple sources helps to ascertain the credibility of the service provider

b)  No shortcuts taken for credit repair – Credit repair is not a one-day process. It requires the proper study of credit reports, verification of information from credit reporting agencies, contacting various credit bureaus and debt collection agencies. Thus, credit repair companies promising to offer quick fixes for sorting out negative remarks on credit reports can’t be trustworthy. At the same time, if a credit repair company takes too much time without any visible results, they might not be the right ones for the job

c)   No Pressure – A good credit restoration company will never pressurize its customers for anything, be it personal information, or adopting tactics to deal with derogatory remarks on credit reports. They should always put their customer’s need first and help them understand their finances and make an informed decision

d)  Money-Back Guarantees – Credit restoration companies offering money-back guarantees not only respect their customer’s money, but they are also confident about their services. They will always ensure that they provide their best to meet the customer’s expectations

e)  Personalized Services – When so many credit repair companies are plaguing individuals to opt for their services, the degree of personalization one company offers is what sets them apart. There are many variants of personalized services ranging from different packages for different customers, to having a dedicated account page

f)     Imparting knowledge regarding finances – Having sound knowledge about credit is the biggest asset. Thus, credit repair companies should educate their clients so that they understand what is meant by good credit and can maintain a positive credit history. All their programs or services offered should be described in detail for the clients to make an informed decision. Additionally, they should also brief their clients about the FCRA so that they know how their credit information is collected and how they can access their credit.

Thus, it is evident to all, be it any city or state, having a decent and comfortable standard of living requires the efficient management of credit. This management of finances or credit has become so important that credit repair service companies have taken a central role in our lives. With their services at our disposal, all individuals are at ease about their financial position and know how to build a safe and sound financial future.

Fair Credit Reporting Act (FCRA): Common Violations and Your Rights

The financial future of a consumer will rise and fall based on his credit report, so everyone must keep a close eye on the contents.

Credit reports are used to determine who gets a job, a credit card, a loan, or even a rental apartment, so few things are more important than getting an error-free credit report.

Even then, mistakes are made in credit reporting, and the consequences can be disastrous.

The Fair Credit Reporting Act of 1970

Recognizing credit information’s life-changing power, Congress enacted the 1970 Fair Credit Reporting Act (FCRA) to protect consumers and control how credit information is used and distributed. The law gives the consumers the right to be informed of what is in their credit file and access to the scores assigned to them by rating agencies. It also requires anyone who denies credit, insurance, or a job because of credit report information to tell you where they got the information, and how to contact the issuer.

The Federal Trade Commission is responsible for implementing the FCRA. The Dodd-Frank Act shifted much of the responsibility for rulemaking to the Consumer Financial Protection Bureau, but the FTC still maintains the authority for enforcement.

The country’s three largest credit reporting agencies – Equifax, Experian, and TransUnion – are required by law to do all they can to collect and report consumer information accurately. They keep files on over 200 million Americans collectively and issue more than 3 billion reports a year.

Given the sheer volume of data, errors are unavoidable. The FCRA provides customers with the ability to file complaints if they find inaccuracies in their reports. It also mandates reporting agencies to investigate and correct false information.

Errors are often clerical, but sometimes they are the consequence of old information reported as current. The New York Times reported in 2014 about the troubles of a Mississippi woman whose $40,000 second-mortgage debt was discharged via a 2007 bankruptcy filing. But four years later, the debt appeared as unpaid on her report, although she had repeatedly attempted to get the error removed. It took action by the attorney general of Mississippi to get her report rectified.

Cases such as these are typical. State attorneys investigate FCRA related complaints. Many have consumer information on their websites to let people know about their rights and what steps they should take if they discover misinformation.

Common violations of the FCRA include:

1. Outdated information supplied as new information. Failure to update documentation after the bankruptcy is over is just one example. Agencies could also report old debts as new, and a financial account can be reported as active when the consumer had closed it.

2. Creditors provide inaccurate financial information regarding you to reporting agencies.

3. Reporting agencies combine or mix details from one person with that of another because of a similar (or identical) last name or social security number.

4. The inability of the agencies to follow dispute management guidelines.

5. Pull your report for an unlawful or unjustifiable reason. For example, viewing a credit file to determine whether you have any assets before filing certain types of lawsuits.

6. Failure to send notifications concerning your credit score or report, in violation of the FCRA.

7. Reporting agencies which provide information to unauthorized individuals or companies.

All FCRA actions are not the result of errors or documents which are improperly handled. For instance, the Los Angeles Times reported in 2012 about a data broker who, in a settlement with the Federal Trade Commission, agreed to pay $800,000 for accusations that he illegally sold personal information to human resources, recruiting firms, and background screening.

Rights Under the Fair Credit Reporting Act

If you are rejected for credit or have any other reason to believe you might have been unfairly harmed by a credit report, get the name of the national credit agency which issued the statement. A property owner who turned you down for poor credit or a bank that refused you a credit card would tell you which entity released the report.

Then, contact the concerned agency and ask for a copy of the report. Bear in mind that if the report contains inaccurate information, other agencies might be using the same information in their reports. Within 30 days of rejection, the organization supplying the data will provide you with the report free of charge. Otherwise, a report may be acquired at a fee.

If you notice incorrect or obsolete information, notify the credit reporting agency in writing, describe the error and request that it be corrected immediately. If the agency investigates and takes no action, and if you are still confident that the report includes errors, approach the Federal Trade Commission or the nearest office of the State Attorney General.

It’s essential to know your rights under the Fair Credit Reporting Act:

1. You are entitled to know what is on your file. Contact the credit rating agency that published a report used to refuse you credit, accommodation, or employment. For all of these reasons and purposes, you are entitled to a free report: information has been used against you; you are a victim of identity theft and put a fraud alert in your records; your file includes false information resulting from fraud; you are on social aid, or you have been unemployed but intend to apply for work within 60 days.

2. In case you have become the victim of identity theft, you are entitled to obtain a copy of transaction documents relating to your identity theft from businesses—loan applications or credit card applications, for example. You may also be authorizing law enforcement agencies to request the details. Businesses have to provide this within 30 days of obtaining the request. Some firms are reluctant to release this information, claiming that it is proprietary or protects consumers. However, the FCRA notes that businesses are expected to provide records of applications and business transactions to assist victims in reporting fraudulent charges. The FTC defines company obligations.

3. All customers are entitled, from each national credit bureau to one free annual credit report.

4. You have the right to request your credit score. Credit reporting agencies issue these. In some instances, when you apply for a loan, mortgage lenders will tell you your score. Additionally, some issuers of credit cards now include revised ratings in their monthly statements.

5. You have the right to challenge information that is missing or incorrect in your report.

6. Credit reporting agencies are required to correct or remove information that is inaccurate, incomplete, or unverifiable.

7. Reporting agencies are not mandated to disseminate outdated negative data.

8. Information contained in your file is restricted to those with a legitimate need.

9. You have to give the credit agencies written permission to send your credit report to employers.

If your rights under the FCRA have been breached, you are entitled to receive actual or statutory damages, recover fees for lawyers and court expenses, and claim punitive damages.

Violations of fair credit reporting act

There are several common breaches of the Fair Credit Reporting Act, involving the thousands of information reporting companies and the three significant offices taking the information and assigning it to your credit report.

Several of the common violations include:

Furnishing and reporting of past information

If your credit conditions change, your credit report has to be updated. If it is not updated, then that is a violation. How can violations occur?

1. Recording a debt after it was settled or paid off as charged-off.
2. Reporting late payments while payments were made in due time.
3. Old debts are listed as new ones.
4. Reporting that an account was active after a customer voluntarily closed it.
5. Failure to report bankruptcy discharging of debt.
6. Reporting information that is over seven years old (when notices of bankruptcy are about to lapse) or ten years old (civil judgments).
7. Inaccurate information on the balance due.
8. Failure to provide a reasonable procedure for reporting identity theft (or providing credit details on an account where identity theft has been reported before).

Mixing of files

Mixing files with another person with similar background details (sometimes as careless as not identifying the Jr. and Sr. in related surnames).

Credit bureaus’ debt dispute procedures

When presenting a formal complaint about the credit report’s accuracy, the credit bureaus must follow appropriate protocols, such as performing an audit, fixing inaccuracies, or removing a debt in dispute. Agencies sometimes fall short in these areas.     

Debt dispute Creditor violations

Creditors are required to note each disputed debt and send corrected information, avoid submitting incorrect information when reported, perform an internal dispute investigation within 30 days, and have a fair process for filing a written dispute or identity theft report.

Privacy Violations

Your credit report should be reported only to individuals with a “valid need,” such as creditors, insurance providers, landlords, utility companies, and employers (with your consent). It is also an infringement to draw a credit report for an impermissible reason, such as deciding whether you are collectible in a dispute, an employer pulling the report without authorization, or a creditor on a debt discharged using the report to verify your current financial operation.

With-holding Notices

You must be given notice of your credit details being registered, managed, and used. Violations may include:

1. A creditor who fails to notify you when they provide negative credit information.
2. A ‘credit information user’ (prospective employer or lender) who does not notify you of an unfavorable decision based on your credit report. Or that credit information user who refuses to identify the source of credit information that he obtains about you.
3. A creditor who has failed to provide you the credit score when used as part of any lending decision.
4. A creditor who refuses to inform you of your right to a free credit report.

It’s essential to be educated and know your Fair Credit Reporting Act rights.

Damage recovery for FCRA violations

The information protected by the Fair Credit Reporting Act is crucial to an individual’s financial well-being that the claimant will file suit and sue for damages when the FCRA violations occur.

To what extent a victim can be compensated depends to a large extent on whether the violation was willful or negligent. The parties liable for potential breaches include credit reporting agencies, companies supplying the credit agency with information, or those using credit report information to make a job or housing decision.

Willful breach of FCRA

These are the most severe – and more highly compensated – violations because it indicates that the agency, company, or person was aware that their actions would impact you. Still, they went ahead and did them anyway.

The categories of damages to be paid for here include:

1. Actual damages. These are damages that can be proved by the harm caused by an action or failure to act by the business, agency, or individual. There’s no limit on how big a reward could be.

2. Statutory damages. These are damages that don’t need proof, but the reimbursement is limited to between $100 and $1,000.

3. Punitive damage. These are awarded to punish and prevent an agency, company, or person from violating the FCRA again.  There is no upper cap on the amount that can be granted.  

4. Attorney fees and legal expenses. If you win your case, you can get the costs of litigating the matter covered.

Negligent violations of FCRA

If an entity, company, or individual fails to exercise due care or takes action that a reasonable person would not practice concerning your credit records, this may result in “negligent” actions and money damages.

The forms of damages available are the same as for willful violations, including actual damages (no limit), statutory damages (usually between $100 and $1,000); punitive damages (no limit); lawyer fees, and legal expenses.

Frivolous lawsuit penalties  

Credit reporting agencies have the power to terminate violation investigations if the agency considers the consumer’s allegation to be unfounded or insignificant.

This usually occurs when the user does not provide enough details to examine the information in question.

They can also lose a case in court if they filed a lawsuit in bad faith or threaten an organization, company, or person. If this occurs, it will compel the consumer to pay the attorney’s fees for filing bad faith documents.

Deadlines

While dealing with the Fair Credit Reporting Act, here are four critical deadlines to remember.

• Incorrect information must be rectified or deleted within 30 days of your dispute (or 45 days if, after submitting your written dispute, you provide further details).
• Businesses or other information providers will inform you, within 30 days, of any negative information reported to the credit bureaus.
• The statute of limitations for filing a lawsuit is two years after the date a breach was found.
• Or within five years from the date of the violation.

Annual Report

If you request it, the three major credit bureaus will be required to provide you with one free copy of your credit report per year. Of course, you have to identify yourself appropriately. The AnnualCreditReport.com website is a perfect place to get your annual credit report for free. For certain instances, a free copy of your credit report must also be given by the credit bureaus:

• If a corporation has rejected your application or charged a higher rate of interest due to details on your credit report.
• When you ‘re unemployed and plan to look for work within the next 60 days.
• If you ‘re on public assistance.
• If you have been a victim of identity theft (or if your credit report, due to identity theft, contains inaccurate information)

Additional credit reporting services

There’s a lot of emphasis on the three nationwide consumer reporting firms — Equifax, Experian, and TransUnion — but recognizing that there are other providers of consumer reporting information is beneficial.

The Consumer Financial Protection Bureau has published a list of other firms that classify themselves as consumer reporting agencies. These firms collect information and report about you to other firms in credit, insurance, employment, residential rental housing, and different decision-making situations. Determining which of the companies might be relevant to you is worth considering.

This list has been independently verified by the CFPB, even though it is not all-inclusive.

In the meantime, here are the latest contact numbers for the three major customer reporting firms:

Equifax: 525-6285 (800)

Experian: (888) 397-3742

TransUnion: 680-7289 (800)

Credit reporting agency issues aren’t uncommon. It can be difficult to get prompt corrections to your credit report’s mistakes, but it is worth trying.

If you have concerns about credit reporting agencies and how information is obtained, you can contact a non-profit credit advisory organization and speak to a professional counselor about the subject.

If your credit report isn’t rectified or the error turns out to be accurate and is harming your credit score and credit obtaining abilities, consult a credit repair agent or a credit repair specialist to determine the future course of action. Looking for credit repair services California will be a great idea when searching for local or regional services.