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Click Here to
Stop Collection
Company Abuse
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Are credit reporting agencies a part of the
government?
No.
Credit reporting companies are just that - companies. They are
in business to make money, just like the mega-billion-dollar
banks that run the credit card businesses. The credit reporting
business is a multi-billion dollar industry. They generate their
income by selling credit reports to creditors.
What is in a credit report?
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Identifying information: includes your name, nicknames,
current and previous addresses, Social Security number, date
of birth, and current and previous employers. This information
comes from any
credit application you have completed, and its accuracy
depends on your filling out forms clearly, completely and
consistently each time you apply for credit. |
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Credit information: includes specific information about
each account including the date opened, credit limit or loan
amount, balance, monthly payment and payment pattern during
the past several years. The report also states whether anyone
else besides you (i.e. a spouse or cosigner) is responsible
for paying the account. This information comes from companies
that do business with you. |
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Public record information: includes federal district
bankruptcy records; state and county court records, tax liens
and monetary judgments; and, in some states, overdue child
support payments.
This information comes from public records. |
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Inquiries: includes the names of those who have obtained a
copy of your credit report for any
reason. This information comes from the credit reporting
agency, and it remains available for as long as two years, as
per federal law.
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What Do Lenders Look For in a Credit Report?
In many cases a lender extending you credit may never
actually meet you. And, most of the time, they won't have an
opportunity to learn what type of a person you are or to
discover for themselves if you are a trustworthy, capable
individual. Often, all they have to make a judgment about your
ability to pay is by looking at your credit history-; which is
an accounting of your ability to repay debt. When determining if
they should extend credit to you or not, lenders may order one
of two different types of credit reports in order to examine
your credit history:
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Quick Credit Check-This is a basic credit report, showing
information from one, two or all three national bureaus. The
basic report provides information on your debtors, past and
present, and on what type of payment history you have.
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Residential Mortgage Credit Report (RMCR)- A lender will
require this report if you are buying a home, and as such
applying for a large loan amount. The lender will pull reports
from at least two, and usually all three, bureaus. In
addition, your current employment may be verified and public
records searched for bankruptcies or liens. |
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Lenders are primarily looking for three things when they pull
your credit file. The first is your character. Lenders want to
know if you are someone who acts responsibly, takes their
debts seriously and pays their bills on time. |
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Lenders look at your capacity to pay your bills on time. This
is based upon your income, or the joint income of you and your
spouse, and how that corresponds to your total debt.
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Finally, a lender will take a look at the possessions you
currently have, or your collateral. You might have a car,
valued at $10,000, that is already paid off. Your ability to
payoff this loan demonstrates that you had the character to
eliminate this debt and provides the lender with a possession
which can be used as security against repaying the new loan.
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All
three factors, your character, your ability to pay and
possessions or collateral, help provide lenders with needed
information which is then used to determine whether or not
they think you are creditworthy. |
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How Do Accounts Go Into Collection?
It's not a rule set in stone but, typically, credit card debts
may be turned over to a collection agency after 180 days after
the debt is owed. In the case of medical collections, some
hospitals - especially for people who don't have any insurance
- turn medical bills over for collections immediately.
A collection may only go on your credit report 180 days after
the debt is owed, according to the Fair Credit Reporting Act.
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How
long do negative items stay on my credit report?
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Accurate negative information generally can be reported for
seven years, but there are exceptions. |
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Bankruptcy information can be reported for 10 years.
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Information reported because of an application for a job with
a salary of more than $20,000 has no time limitation.
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Information reported because of an application for more than
$50,000 worth of credit or life insurance has no time
limitation. |
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Information concerning a lawsuit or a judgment against you can
be reported for seven years or until the statute of
limitations runs out, whichever is longer. |
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Default information concerning U.S. Government insured or
guaranteed student loans can be reported for seven years after
certain guarantor actions. |
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Tax
liens stay on 7 years from the date PAID. |
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Some
other rules to keep in mind:
The Statute of Limitations has nothing to do with the length
of time something can stay on your credit report, they are two
TOTALLY separate things. Again, there is absolutely NO
relationship.
The length of time a negative mark can stay on your credit
report starts from the time you were late or the late payment
went into collection, not from the last time you made a
payment on the account. Some collection agencies update their
reporting status on you to keep the account active with the
bureaus to extend the time the account appears on your report.
Very crafty and underhanded of them, because most often the
account is updated and the period of time the account is
active appears to be extended. Challenge this! If you do,
bureaus will correctly remove it 7 years from origination.
Period. In other words, paying a collection will not keep it
on your credit report for a longer period of time if you are
diligent.
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Am I really allowed to dispute charges on my credit
report?
Most people don't realize what their credit rights are. Here
are a few facts:
By law, you are entitled to dispute any negative items that
appear on your credit reports.
When an item on a credit report is disputed, the burden of
proof rests on the credit bureau to prove that the disputed item
is not a mistake. If a credit bureau cannot verify the
information, they must remove it from your credit reports.
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The Fair Credit Reporting Act (FCRA), a
federal law, was created to help protect the privacy of information in the
files and reports that are created by each "consumer reporting agency" (CRA).
This information shows whether or not you pay your bills on time, what
credit accounts you have open or closed, and your long term payment history.
In addition the report provides personal information including social
security number, address, phone number and place of employment. If you apply
for a credit card, bank or other loan, or seek housing through rental, those
you apply to will need to see your report. The FCRA gives you specific
rights. You may have additional rights under state law. (more...)
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