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Nov 16, 2007

How to Dispute Credit Report Errors

Your credit reports contain information about where you live, how you pay your bills, and any public records that you may have. Credit bureaus sell your report to creditors, insurers, employers, landlords and anyone else who will pay for it. They use this information to evaluate what kind of risk you will be for credit, insurance, employment, renting and sometimes utilities.

Most of you probably already knew that…but, did you know a study released by the U.S. Public Interest Research Group in June 2004 found that 79% of the consumer credit reports surveyed contained some kind of error or mistake. That’s right, that means about 4 out of 5 people have information on their credit reports that is erroneous! Astonishing isn’t it?

Even worse, more than 25% of credit reports have errors serious enough to result in the denial of credit or increase rates. A good score can save you $100,000 over the life of a $250,000 mortgage. So, technically, you could be paying $100,000 more on a 30 year mortgage because of MISTAKES THE CREDIT BUREAUS MADE in reporting your information!

That’s really just the beginning of the awful things that could happen to a consumer because of credit bureau’s erroneous reporting. For this reason and many others, it’s crucial that you review your credit report periodically.

To dispute these errors you must first get your credit reports. Then, you must spend some time analyzing your credit reports. Make sure that all of the information being reported is accurate. The credit bureaus must investigate the items in question within 30 days. They also must forward all relevant information you provide about the inaccuracy to the creditor that provided the information.

After the creditor receives notice of a dispute from the consumer reporting company, it must investigate, review the relevant information, and report the results back to the consumer reporting company. If the information provider finds the disputed information is inaccurate, it must notify all three nationwide consumer reporting companies so they can correct the information in your file.

There are many more techniques to get inaccurate information removed from your credit reports. Stop by the credit repair forum or check out the Credit Secrets Bible to find out how you can get started repairing your credit today!

If you prefer to let professionals handle the job, give Lexington Law Firm a shot!

Posted in consumer credit reports, credit, credit bureaus, credit report dispute | No Comments »



Nov 11, 2007

Identity Theft

What are the steps I should take if I’m a victim of identity theft?

If you are a victim of identity theft, take the following four steps as soon as possible, and keep a record with the details of your conversations and copies of all correspondence.

1.Place a fraud alert on your credit reports, and review your credit reports.

Fraud alerts can help prevent an identity thief from opening any more accounts in your name. Contact the toll-free fraud number of any of the three consumer reporting companies below to place a fraud alert on your credit report. You only need to contact one of the three companies to place an alert. The company you call is required to contact the other two, which will place an alert on their versions of your report, too. If you do not receive a confirmation from a company, you should contact that company directly to place a fraud alert.

Equifax
P.O. Box 740241
Atlanta, GA 30374-0241
1-800-525-6285;

Experian
P.O. Box 9532
Allen, TX 75013
1-888-EXPERIAN (397-3742)

TransUnion
Fraud Victim Assistance Division
P.O. Box 6790, Fullerton
CA 92834-6790
1-800-680-7289

Once you place the fraud alert in your file, you’re entitled to order one free copy of your credit report from each of the three nationwide consumer reporting companies, and, if you ask, only the last four digits of your Social Security number will appear on your credit reports. Once you get your credit reports, review them carefully. Look for inquiries from companies you haven’t contacted, accounts you didn’t open, and debts on your accounts that you can’t explain. Check that information, like your Social Security number, address(es), name or initials, and employers are correct. If you find fraudulent or inaccurate information, get it removed. See Correcting Fraudulent Information in Credit Reports to learn how. Continue to check your credit reports periodically, especially for the first year after you discover the identity theft, to make sure no new fraudulent activity has occurred.

2. Close the accounts that you know, or believe, have been tampered with or opened fraudulently.

Call and speak with someone in the security or fraud department of each company. Follow up in writing, and include copies (NOT originals) of supporting documents. It’s important to notify credit card companies and banks in writing. Send your letters by certified mail, return receipt requested, so you can document what the company received and when. Keep a file of your correspondence and enclosures.

When you open new accounts, use new Personal Identification Numbers (PINs) and passwords. Avoid using easily available information like your mother’s maiden name, your birth date, the last four digits of your Social Security number or your phone number, or a series of consecutive numbers.

If the identity thief has made charges or debits on your accounts, or has fraudulently opened accounts, ask the company for the forms to dispute those transactions:

For charges and debits on existing accounts, ask the representative to send you the company’s fraud dispute forms. If the company doesn’t have special forms, use the sample letter to dispute the fraudulent charges or debits. In either case, write to the company at the address given for “billing inquiries,” NOT the address for sending your payments.

For new unauthorized accounts, ask if the company accepts the ID Theft Affidavit (PDF, 56 KB). If not, ask the representative to send you the company’s fraud dispute forms. If the company already has reported these accounts or debts on your credit report, dispute this fraudulent information. See Correcting Fraudulent Information in Credit Reports to learn how.

Once you have resolved your identity theft dispute with the company, ask for a letter stating that the company has closed the disputed accounts and has discharged the fraudulent debts. This letter is your best proof if errors relating to this account reappear on your credit report or you are contacted again about the fraudulent debt.

3. File a complaint with the Federal Trade Commission.

By sharing your identity theft complaint with the FTC, you will provide important information that can help law enforcement officials across the nation track down identity thieves and stop them. The FTC can refer victims’ complaints to other government agencies and companies for further action, as well as investigate companies for violations of laws the agency enforces.

You can file a complaint with the FTC using the online complaint form; or call the FTC’s Identity Theft Hotline, toll-free: 1-877-ID-THEFT (438-4338); TTY: 1-866-653-4261; or write Identity Theft Clearinghouse, Federal Trade Commission, 600 Pennsylvania Avenue, NW, Washington, DC 20580.

Be sure to call the Hotline to update your complaint if you have any additional information or problems.

4. File a report with your local police or the police in the community where the identity theft took place.

Then, get a copy of the police report or at the very least, the number of the report. It can help you deal with creditors who need proof of the crime. If the police are reluctant to take your report, ask to file a “Miscellaneous Incidents” report, or try another jurisdiction, like your state police. You also can check with your state Attorney General’s office to find out if state law requires the police to take reports for identity theft. Check the Blue Pages of your telephone directory for the phone number or check naag.org for a list of state Attorneys General.

When you go to your local police department to file a complaint, bring a printed copy of your ID Theft Complaint form and your supporting documentation. Ask the officer to attach or incorporate the Complaint into their police report. Also ask the officer to sign the “Law Enforcement Report” section of your Complaint. If the officer wants more information about the ID Theft Report, you can tell them it is available on the FTC’s Web site’s Section for Law Enforcement at the link for “Identity Theft Report”. Ask the officer to give you a copy of the official police report with your ID Theft Complaint attached or incorporated. (In some jurisdictions the officer will not be able to give you a copy of the official police report, but should be able to sign your complaint and write the police report number in the “Law Enforcement Report” section.)

The ID Theft Complaint can be used to supplement an automated police report. If you can file online an automated report, complete the “Automated Report Information” block of the ID Theft Complaint. Attach a copy of any confirmation received from the police to your ID Theft Complaint.

Soure: FTC.gov

Posted in credit, credit reports, fraud alert, identity theft | No Comments »



Nov 3, 2007

The Truth About Consumer Credit Counseling

If you are worried about your debt, credit counseling may sound like a great idea, but before you make an appointment with a credit counseling service, it’s important that you know the facts.

First of all, credit counseling companies are not regulated by the federal government. There are only 17 states that have any laws that do regulate such businesses. That pretty much means that anyone can start up a credit-counseling or debt-consolidation company. The largest credit counseling company is actually a national network of offices; member agencies typically use the trademarked name Consumer Credit Counseling Services.

Debt counselors make money by charging a small “start-up fee”, often called a “voluntary contribution”. The start-up fee varies significantly. Some companies charge around $20 while others charge much as 100 percent of your first monthly payment as a start-up fee. On top of that there is a monthly “maintenance fee”, which is around $20 on average. But, here’s where it gets a little strange:

The biggest source of income for debt counseling companies comes from credit card companies themselves. Creditors kick back a percentage of each monthly payment to the debt counselor. The creditors write this off as a debt-collection fee, assuming that they are getting more money back than if the customer went bankrupt.

The most important thing to remember when signing on with a debt counseling company is that the company is playing both sides of the fence. They are in business to make money off of both you and your creditors. And the truth is, everything they do for you, you can do yourself!

The credit counseling company wants to place you in a “Debt Management Plan” so it can earn money from creditors. Credit-counseling agencies are all registered as non-profits. Don’t be fooled, this does NOT mean that they are not profiting from your debt. They are basically paid by your creditors to be their debt collector.

On top of that and most importantly, your credit scores will suffer tremendously by using a debt counselor. The words “Managed by Credit Counseling Company” will appear under each account on your credit report that is involved in the Debt Management Plan and is just as damaging to your account as a “charge-off” is. Also, if you fail to make monthly payments as agreed, it gets even worse.

If you are in serious financial trouble, the best thing you can do is negotiate directly with your creditors. If your creditors won’t budge during negotiations, get approved for lower interest rate cards and transfer your balances.

You may also want to check out some of the financial experts programs like Dave Ramsey’s Financial Peace or Jean Chatzky’s Pay it Down: From Debt to Wealth on $10 a Day,.

Posted in consumer credit counseling, credit, credit counseling service, debt counseling | No Comments »