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Credit Facts for Consumers.

What Everyone Should Know About Credit Repair

in order to succeed in your efforts of fixing your bad credit, you must learn about your rights as per all federal regulations. This information will allow you to understand how a credit repair process must be followed. You will also unsderstand why it is important to have an "ally" like Credit Healer Software during the credit repair process.

Accuracy, Access to Reports and Reinvestigations

Studies have shown that credit reports and resulting credit scores are often inaccurate or incomplete, resulting in consumers paying too much for credit. Further, consumers face difficulty fixing mistakes. (The major provision of the 1996 amendments was the imposition, for the first time, of duties on companies providing information to credit bureaus, known as furnishers.) The following FACT Act amendments address accuracy, access and reinvestigations.

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Annual Free Credit Reports: Each national credit bureau must provide a free report upon request within 15 days of a request by phone, Internet, or mail through a one-call centralized source to be established by the FTC within a year. Reports will also be available from specialty bureaus, such as landlord – tenant or insurance reporting services, with the method of distribution to be established in regulations to be issued within six months, effective six to nine months thereafter. States are preempted from increasing the frequency of the provision of free reports (free report laws in Colorado, Georgia, Maine, Maryland, Massachusetts, New Jersey, Vermont are “grandfathered”).

CRAs (Equifax, Experian and Transunion) have 45 days to conduct reinvestigations of disputed items resulting from free report requests (compared to 30-45 days for all other reinvestigations). This does not apply if the CRA has not been continuously providing consumer reports for 12 months preceding request.

FTC To Create Summary Of Rights For Consumers:
These rights include the availability of free credit reports, the right to dispute information in a credit report, and how to request and obtain credit score. The summary of rights will be distributed with adverse action notices (if a consumer is denied or offered credit at less than favorable terms) and actively promoted by FTC and posted on its website. This summary must also tell consumers that they may have additional rights under state law.

Credit Bureaus Must Provide Credit Scores, and information on up to four key factors (or five factors if the number of inquiries was a factor and not among the four key factors) adversely affecting a consumer’s score. Bureaus can charge a “fair and reasonable fee” for score, as determined by the FTC. This does not apply to mortgage scores, such as those created by automated underwriting programs.

One-Time Written Notification That Negative Information Will Be Or Has Been Sent To Credit Bureaus: Any financial institution that submits negative information to national CRA must give consumers one-time written notice that they have done so or will do so. This notice may be included in a notice of default or a billing statement, but not with Truth in Lending disclosures.

credit repair software | repair bad creditNew Risk Based Pricing Notice: Existing law provides that consumers who are denied credit or services or required to pay extra for credit due to their credit report receive an “adverse action notice” triggering their credit reporting rights. The FACT Act establishes a new notice for certain additional circumstances. Whenever credit is extended on terms “materially less favorable than the most favorable terms available to a substantial proportion of consumers” from that creditor, creditors must provide notice that the terms offered are based on information in a consumer’s credit report and that the consumer can request a free copy of the report. (No civil enforcement is allowed -- federal enforcement only. States are preempted from acting further with respect to the notice.)

Guidelines/Regulations On Accuracy And Integrity Of Information:
The FTC and financial regulators are to create guidelines for accuracy and integrity of information and require furnishers of information to establish reasonable policies and procedures to implement guidelines.

Higher Standard For Furnishers Of Information To CRAs: Under pre-revision rules, those who provide information to credit reporting agencies were not allowed to report inaccurate information if they knew or consciously avoided knowing that the information was inaccurate. The new standard prohibits reporting of inaccurate information if the furnisher “knows or has reasonable cause to believe that the information is inaccurate.”

Consumers Can Dispute Incorrect Information Directly With Furnisher:
Under pre-revision rules, furnishers of information were only required to perform a credit repair software | repair bad creditreinvestigation of the accuracy of information if they received a complaint from a consumer via a credit reporting agency. The new law requires financial regulators and the FTC to prescribe regulations outlining circumstances when creditors and other furnishers of information to CRAs should reinvestigate complaints that come directly from a consumer. (Exempts disputes filed by credit repair organizations. This new right does not provide a private right of action .)

FTC Compilation And Report On Complaints Regarding Credit Reports: CRAs must report on the determinations made based on such complaints. Requires the FTC to compile an annual report on the outcome of these complaints.

Study Of Accuracy And Completeness Of Consumer Reports: The Federal Reserve Board and FTC must study and report to Congress (twelve months after enactment) on the compliance of CRAs and furnishers regarding the accuracy of items by consumers, the completeness of information provided to CRAs, and the correction and deletion of inaccurate or incomplete information.

Improved Disclosure Of Results Of Reinvestigation:
CRAs must notify furnishers when changes are made because of a reinvestigation based on a consumer complaint about a credit reporting error.

Requirement For Furnishers To Update Records:
Furnishers must change records, delete records, or permanently block reporting to CRAs of information found to be inaccurate or incomplete.

Notification Of Address Discrepancy: CRAs must notify anyone requesting a consumer’s report if the address on the request substantially differs from the address in the consumer’s file.

Reasonable Reinvestigation: Clarifies the obligation on CRAs to reinvestigate items of disputed accuracy by requiring a “reasonable reinvestigation”.