WHO CAN ORDER A CREDIT
REPORT?
A consumer may request his or her own credit report at
any time.?Access to a consumer’s credit
information is regulated by the Fair Credit Reporting Act (FCRA) and
administrated by the Federal Trade Commission.?
Companies may request a consumer credit report from a credit reporting
agency when they have a “permissible purpose?that qualifies under the FCRA.
Examples of FCRA-permissible purposes include:
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Granting of credit
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Collection of debt
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Underwriting of insurance
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Employment
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Issuing a license as required by some
government agencies
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Initiation by the consumer of a legitimate
business transaction between a business and the consumer.
Any
person who knowingly and willfully obtains information on a consumer from a
consumer reporting agency under false pretenses shall be fined under Title 18,
United States Code, imprisoned for not more than two years, or both.
WHAT INFORMATION IS
NEEDED TO ACCESS A CREDIT REPORT?
To access credit data, the following information should
be provided:?consumer’s complete name
(including suffixes,) Social Security number, and all addresses covering the
past two years of residency.
HOW LONG ARE
BANKRUPTCIES AND OTHER DELINQUENTS OR DEROGATORY CREDIT REPORTABLE?
The FCRA provides the following statute of limitations:
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Bankruptcies:?10 years from date of entry of the order for
relief.
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Suits and Judgments:?7 years from date of entry or expiration of
applicable statute of limitations whichever is long.
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Tax Liens-Paid:?7 years from date of payment.
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Tax-Liens-Unpaid:?No limitation
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Collections:?7 years.
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Charged to Profit and Loss:?7 years.
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Criminal Record Limitations:?No limitation on criminal conviction
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Other Lates & Adverse Information:?7 years.
WHAT IS A CREDIT SCORE
AND HOW DOES IT AFFECT A CONSUMER?
A credit score is a number that predicts for a lender
how likely an individual is to repay a loan or make credit payments on
time.?When a lender requests a credit
report and score from a credit reporting agency, the score is calculated by a
“scorecard?or coring model-a mathematical equation that evaluates many types
of information from the credit data at that agency.?By comparing this information to the patterns
in thousands of past credit reports, scoring identifies a consumer’s level of
credit risk.?
WHY DOES ONE FAMILY
MEMBER’S CREDIT DATA SHOW UP ON ANOTHER FAMILY MEMBER’S CREDIT FILE?
Sometimes mixed credit can exist in credit bureau
data.?For examples, a parent and adult
child who share the same or similar names may develop mixed credit.?This is compounded by sharing the same
residence address or by having shared a prior residence address.?Note:?
Using suffixes such as Jr., Sr., or III, as well as the birthdates, may
assist in eliminating mixed data.
WHY DOES AN ACCOUNT
THAT HAS BEEN PAID STILL APPEAR ON CREDIT REPORT WITH OTHER THAN A ZERO
BALANCE?
Most credit grantors report to the credit bureaus on a
monthly or bi-monthly basis.?Time requirements
of creditors to prepare and transmit data to the credit bureaus vary.?The reported date of the credit account
located on a credit report will indicate the last time that account was updated
with the bureaus.?This date may vary 30,
60, 90 or more days from the date a credit report was accessed.
HOW IS IT POSSIBLE
THAT AN ACCOUNT IS LISTED AS “CURRENT?AND “CLOSED?AT THE SAME TIME?
Both “current?and “closed?can be listed on your
account together since the word “current?represents that the last account
payment was paid as agreed, and “closed?indicates your credit account was
closed for further use or the account has been paid in full.
IS A LENDER PERMITTED
TO ACCESS CREDIT DATA ON THE CONSUMER’S SPOUSE WITHOUT THE SPOUSE’S PERMISSION?
A lender may not generally obtain a credit report on an
applicant’s spouse unless the spouse is a co-applicant or will be liable; the
applicant is relying on the spouse’s income to qualify; the applicant resides
in a community property state or the property on which the applicant is
replying for repayment is located in a community property state; or the
applicant is acting as agent for the non-applicant spouse.
HOW DOES DIVORCE
AFFECT A CONSUMER’S CREDIT?
A divorce decree does not take the place of the original
contract with the creditor.?It does not
release a consumer’s legal responsibility on the account.?If an account awards awarded to the ex-spouse
in the divorce decree, the consumer must contact each creditor directly to
release his or her obligation.
WHAT ARE THE ECOA
CODES AND WHAT DO THEY MEAN?
The ECOA (Equal Credit Opportunity Act) code indicates
who is responsible for each account and the type of participation for that
account, as flows:
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U/UNDESIGNATED/Not designated by the
creditor
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I/ INDIVIDUAL/Individual account
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J/JOINT/Joint account
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A/AUTHORIZED USER/Authorized to use someone
else’s account
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S/SHARED/Joint account
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C/CO-MAKER/Joint responsibility for the
account
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B/CO-SIGNER/Responsibility only in case of
default on the account
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M/MAKER/Individual account
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T/TERMINATED/Closed account
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X/DECEASED/Deceased individual
WHY DO LOANS A
CONSUMER CO-SINGED FOR APPEAR ON HIS OR HER CREDIT REPORT?
A co-signor on a loan is responsible for the debt if
the primary account holder does not pay on the account as agreed or defaults on
the loan.?The delinquencies may appear
on the co-singer’s credit report and the co-singer may be responsible for the
repayment of the debt.
WHY ARE SOME OF THE
ACCOUNT NUMBERS ON THE CREDIT REPORT DIFFERENT FROM THOSE ON THE LOAN
APPLICATION?
Credit grantors may shorten, lengthen, or truncate
account numbers when reporting to the credit bureaus.?For security reason, creditors may also
scramble account numbers.
HOW
WILL “SHOPPING FOR CREDIT?AFFECT A CREDIT REPORT?
Consumers shopping for a new auto or home loan may
submit numerous applications to lenders within a short time frame, resulting in
number of credit bureau inquiries. To minimize the negative impact of these events, multiple inquiries
made within 30 days from the mortgage and automotive industry has 0 effects on
consumer’s credit score.?
Additionally, inquiries of the same type made within any 14day period
are treated as single inquiry.
CAN A CREDIT REPORT BE
REVISED TO REFLECT A TAX LIEN OR JUDGMENT AS SATISFIED BASED ON A PAID RECEIPT
PRESENTED BY THE CONSUMER?
No.?The
disposition (payment) must be recorded at the court where the judgment was
filed before the record can be identified.
WHAT IF A CONSUMER HAS
LITTLE OR NO CREDIT HISTORY?
A non-traditional credit report which helps establish a
consumer’s creditworthiness when he or she has a thin credit file can be
ordered.?This special report utilizes
all available credit bureau data and supplements it with alternative sources
such as rent payments and utility bills.
WHAT SHOULD CONSUMERS
DO IF THERE IS AN ERROR ON THEIR CREDIT REPORT?
Since information reported to the credit bureaus is
only as current and as accurate as the information reported by creditor(s),
consumers who want to dispute information on a credit report should contact the
creditor and the agency that developed the report.?Errors on a credit report must be corrected
by the credit bureau that generated the information.?The bureaus can correct any inaccurate
information that may appear in their permanent files.?The FCRA allows a credit reporting agency a
“reasonable period of time?to reinvestigate deputed items.
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Source:?Certified Credit
Reporting Inc.
