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HOW TO REPAIR YOUR CREDIT USING THE FCRA

The Fair Credit Reporting Act is long and tedious to read and usually consumers give up reading it and are often left to wonder how it protects them. The important thing to remember is that only a few sections and subsections are important to thwart off inaccurate credit reporting. All credit repair efforts should always begin with the foundation of the FCRA. It is the brass in your knuckles because it's law. No one can argue with a federal law that is in place to protect you. It is the intricate details of the FCRA like the running of time that should support credit repair efforts.

Below is a snapshot of the FCRA and how it protects you.

The Fair Credit Reporting Act: (this is all you really need to read)

Sec. 1681c. - Requirements relating to information contained in consumer reports

-Information excluded from consumer reports
-Exempted cases
-Running of reporting period
-Information required to be disclosed:
-Indication of closure of account by consumer:
-Indication of dispute by consumer:
-Information excluded from consumer reports

Except as authorized under subsection (b) of this section, no consumer reporting agency may make any consumer report containing any of the following items of information:

(1) cases under title 11 or under the Bankruptcy Act that, from the date of entry of the order for relief or the date of adjudication, as the case may be, antedate the report by more than 10 years.

(2) Civil suits, civil judgments, and records of arrest that, from date of entry, antedate the report by more than seven years or until the governing statute of limitations has expired, whichever is the longer period.

(3) Paid tax liens which, from date of payment, antedate the report by more than seven years.

(4) Accounts placed for collection or charged to profit and loss which antedate the report by more than seven years.

(5) Any other adverse item of information, other than records of convictions of crimes which antedates the report by more than seven years.

(b) Exempted cases ( means these instances are exempt to ordinary reporting rules)

The provisions of subsection (a) of this section are not applicable in the case of any consumer credit report to be used in connection with -

(1) a credit transaction involving, or which may reasonably be expected to involve, a principal amount of $150,000 or more;

(2) the underwriting of life insurance involving, or which may reasonably be expected to involve, a face amount of $150,000 or more; or

(3) the employment of any individual at an annual salary which equals, or which may reasonably be expected to equal $75,000, or more.

(c) Running of reporting period (means how long items can stay on your credit reports)

(1) In general, the 7-year period referred to in paragraphs (4) and (6) of subsection (a) of this section shall begin, with respect to any delinquent account that is placed for collection (internally or by referral to a third party, whichever is earlier), charged to profit and loss, or subjected to any similar action, upon the expiration of the 180-day period beginning on the date of the commencement of the delinquency which immediately preceded the collection activity, charge to profit and loss, or similar action.

(2) Effective date: Paragraph (1) shall apply only to items of information added to the file of a consumer on or after the date that is 455 days after September 30, 1996.

Interpretation:
This means that no matter how many times a collector tells you that they can extend the reporting time of 7 years, that is false! The reporting time is determined by the FCRA and is specifically stated as to how long an item that is placed for collections or charged off can remain on your credit. It is 7 years from the date it was charged off or placed to collection, NOT DATE OF LAST PAYMENT OR DATE ITEM WAS SOLD TO A THIRD PARTY DEBT COLLECTOR. See this article for a full and detailed description of the 7 year rule on bad accounts. This is extremely important to know before you ever pay a debt collector a dime. If your credit reports are not showing the item then you may consider not paying it, or if it is still on your credit you may consider trying to settle the item in exchange for a better credit rating. Remember as well that the SOL (statute of limitations) for reporting a debt and collecting a debt are different.

(d) Information required to be disclosed: (means what is required to be disclosed)

Any consumer reporting agency that furnishes a consumer report that contains information regarding any case involving the consumer that arises under title 11 shall include in the report an identification of the chapter of such title 11 under which such case arises if provided by the source of the information. If any case arising or filed under title 11 is withdrawn by the consumer before a final judgment, the consumer reporting agency shall include in the report that such case or filing was withdrawn upon receipt of documentation certifying such withdrawal.

(e) Indication of closure of account by consumer: (means rules CRA to follow at your request)

If a consumer reporting agency is notified pursuant to section 1681s-2(a)(4) of this title that a credit account of a consumer was voluntarily closed by the consumer, the agency shall indicate that fact in any consumer report that includes information related to the account.

(f) Indication of dispute by consumer: (means CRA must list dispute in progress)

If a consumer reporting agency is notified pursuant to section 1681s-2(a)(3) of this title that information regarding a consumer who [2] was furnished to the agency is disputed by the consumer, the agency shall indicate that fact in each consumer report that includes the disputed information.

Each one of these rules applies to how a credit bureau disseminates and reports your information. If you are attempting to repair your credit, it is vital to review these rules and apply them to your letters. Remember, all letters need to be sent certified mail return receipt requested and... keep records forever.

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