Credit Dispute Information
The three main credit bureaus are Equifax, Experian, and TransUnion. These organizations are part of a billion-dollar industry, and they manage various databases that banks and credit card companies subscribe to make lending decisions for most consumers in America regularly. They also sell specialized information to collection agencies and other major industries.
The credit bureaus maintain negative and positive financial records and payment histories for over 100 million consumers throughout the United States. Congress has created a watchdog called the Federal Trade Commission to regulate the credit bureaus through the Fair Credit Reporting Act (FCRA).
What information is in my credit report?
Every credit report looks slightly different, but they all contain the same information about you and your accounts. The consumer credit report starts with a summary of facts and your report number. The following is a list of critical information that you should pay attention to on your credit reports:
When you first get your credit report, the cover page will have your name, report date, report number, the address of the credit bureaus, Federal Trade Commission disclosures, and other information from the credit bureaus.
Creditor/Collection Agency Name:
Here, the creditor or the collection agency will list their name and address, but no phone number is included. Sometimes, they include their phone number at the end of the credit report near the address section. A partial number of your account will also be listed, to protect you from identity theft.
Type and Responsibility:
These terms can be confusing at times, but this section describes the types of loans you have and who is responsible for each loan.
Date Open and Date of Status:
This is the date your account was opened and when the creditor or collection agency first reported payment information about you to the credit bureau.
Reported Since and Last Reported:
This is the date the creditor first reported your payment history, as well as the last date they reported your status.
Terms and Monthly Payment:
This is how long you are contracted to pay the debt and how much you pay per month.
Credit Limit/Original Amount:
This area tells you how much your credit limit was when you first opened the account.
Recent Balance and High Balance:
In this area, the credit report displays your most recent balance from your account and the highest balance you ever had with the trade line.
Status and Account History:
This section shows if you are current on your bills or if the account was closed or paid. Furthermore, it also displays your payment history.
In this part of the report, the creditor will comment on whether the consumer or the lending institution closed the account. They can also list other comments here.
History of Your Accounts:
This area will display your entire paying history since you opened the account, and each one of your accounts will be listed in this section. This section on some of the credit reports can be confusing. If you don’t understand the listing, make sure you contact the credit bureaus for a full understanding.
Record of Request for Your Credit History:
In this section, you can see who has requested to evaluate your credit report. Most companies looking at your information are your current creditors and collection agencies.
The shared inquiry area, which is in this section as well, will display companies that are trying to offer you pre-approved credit applications.
Here you will find your name, address, date of birth, telephone number, spouse’s name/co-applicant, and your employer’s name. No Social Security number will be listed.
This section displays public record information like bankruptcies, judgments, tax liens, civil lawsuits, overdue child support payments, and criminal records.
The remaining portion of your credit report contains addresses of companies that requested your credit report. It also displays various consumer laws from the Federal Trade Commission, contact numbers, common must-ask questions, and sometimes a dispute form issued by the credit bureau.
What is a credit report and why is it important?
Your credit report is a snapshot of your payment history for all credit transactions that you have from age 18 until now.
It detailed when you applied for credit, how many positive and negative accounts you have, who has viewed your credit report, and all your personal information.
Reviewing your credit report every four to six months gives you a chance to check for identity theft, inaccurate accounts, and incorrect information.
It allows you to manage your financial situation before applying for a credit card, auto loan, bank loan, mortgage loan, employment, or insurance.
For example, if you check your credit and notice that there are a few negative items on your report, you will have a chance to fix those items before applying for credit. By doing this, you avoid embarrassment and several inquiries, which lowers your credit score.
How does bad information get on my credit report?
Every month, the creditors and collection agencies that you have accounts with will report positive and negative information to the credit bureaus through a computer tape monitoring system that is updated regularly.
The credit bureaus then turn around and update the information. A third-party company usually passes public record information (judgments/tax liens) on to the credit bureaus.
When does negative information come off my credit report?
Each negative item has a federal statute of limitation regarding when it must drop off your credit report. Once the statute of limitation has expired, the item must be deleted from your credit report according to the Fair Credit Reporting Act.
The statute of limitation starts 180 days from the date the account became delinquent.
Federal Statute of Limitations
The statute starts 180 days from the date the account became delinquent. For example, if your payment was
Due on January 1st, but you did not pay it until February 1st, you would be considered 30 days late. Now, count 180 days from February, which will take you to July. This month will be the time the seven-year statute will begin.
Once you become more than 30 days late on any of your bills, the financial institution that you hold a loan with will disclose your late status to the credit bureau. You can be reported as 30, 60, 90, or 120 days late, and, by law, the late marks will remain on your credit report for seven years.
Whenever you apply for a credit card or a loan, your credit report is checked, which results in a hard inquiry. These inquiries could damage your credit score if you have more than six in two months. They can also stay on your credit report for up to two years.
These are debts that the creditor felt that they could not collect on anymore after 180 days, and so they charged them off as a bad debt. However, the creditor can still sell the account to a third-party collector for collection purposes.
If a creditor takes you to court and sues for judgment, this destructive item will be placed on your credit report. The courts issue judgments that can stay on your credit report for up to seven years, but it can be renewed until it is paid or until it reaches the 20-year mark.
If you stop making child support payments, it becomes part of your public record and will, therefore, show up on your credit report. This negative mark can stay on your report for up to seven years.
Foreclosures take place when you default on your home mortgage, and the bank takes the house back. Repossession is when you can no longer pay your car note, and it goes into default.
The lender will then confiscate the vehicle without your permission and sell it in an auction. Both create negative marks that will remain on your credit report for seven years.
Tax liens are public records that will find their way into your credit report if you default on your tax liability with the IRS. Paid tax liens will stay on your credit report for seven years but, while owed, they can remain on your record forever.
If you see an old account on your credit report under the collection trade line, this is a bill that was sold or assigned to a collection agency. It was passed on to the collector from your original creditor because you refused to pay.
This debt can legally stay on your credit report for up to 7.5 years, but you cannot be sued for it after the state statute of limitation has expired. See appendix for the state statute of limitation on revolving accounts.
Your credit report will list the date you filed for bankruptcies and the time it was discharged.
Chapter 7 bankruptcies can remain on your credit report anywhere from seven to 10 years depending on your state, and a Chapter 13 bankruptcies will remain on your credit report for seven years.
A dismissed bankruptcies will stay on your credit report for ten years even though it was not discharged. A dismissed bankruptcy means you started the proceedings, but you changed your mind and decided not to complete the process.
Who uses the information in my credit report?
Banks, creditors, car dealers, mortgage brokers, and any other lending institution use your credit report to determine if you are credit-worthy of a loan.
Collection agencies use the information in your credit report to track your location and see what other debts you owe. Insurance companies run your credit report to determine your insurance risk, and employment agencies view your report for employment considerations.