Credit Reporting Problems
Good credit is perhaps the most important consumer currency in the new digital age. Paying bills on time, meeting financial obligations, making responsible credit decisions are all keys to developing a positive credit rating. However, all of this hard work can be undone by occurrences out of your control. Worse, it is often a time consuming and frustrating process to clean up your credit once you discover problems.
False Credit Reports
The exponential rise in the use of consumer credit, and the increase in consumers with complaints about their credit reports has focused much attention and concern on consumer credit reports. The credit reporting industry, including the credit bureaus or credit reporting agencies, the credit grantors, and the credit information providers, are subject to their own federal statute, the Fair Credit Reporting Act.
Identity Theft
With the advent of Internet e-commerce has come a growing awareness of credit identity theft. However, the fraudulent use of identifying information is not new. Consumers should certainly be very cautious about giving out credit card account numbers and other identifying information over the Web, but there are many other places criminals can obtain information about you. For example, some credit thieves steal mail from mailboxes, including checks sent out to pay bills, as well as credit card applications. Credit thieves can also obtain information from you by going through your garbage, such as bank and credit card statements. Some credit thieves are quite innovative — in Oregon, a department store employee was arrested for using a credit card reader to scan customers’ credit card accounts into her laptop.
Credit Reporting Problems
In spite of the nightly news coverage of credit identity theft, credit reporting problems can often be much more mundane. For example, a “merged” credit file can occur when two individuals have very similar identifying information. An easy example of a merged file is a father and son with the same first and last name. More often, however, it is not so simple. For example, John A. Smith’s credit accounts (or “tradelines”) may be reported onto John B. Smith’s credit report. Sometimes, there is even less rhyme or reason to these errors. Credit reporting agencies use complex computer algorithms to attempt to match consumers with credit information from many different sources, and errors are not uncommon.
Obsolete Credit Information
In addition to inaccurate information, certain information which is deemed to be “obsolete” also may not be reported. In general, credit information which is over seven years old is obsolete under the Fair Credit Reporting Act. Bankruptcy can be reported for ten years.
