Road to 750-Understanding Credit Repair Process and Laws

Aug 19, 2024

Credit Repair Lecture Notes

Introduction

  • Discussed inaccuracies reporting and how to address them
  • Recommendation to pull reports from Privacy Guard or Credit Smart
  • Importance of comparing credit reports for inconsistencies

Key Laws and Acts

  • 15 USC 1681: Used to address inaccurate reporting
  • 15 USC 6802 - 6805: Opt-out rights; right to opt-out of anything on your credit report
  • Privacy Act of 1974: Relevant for privacy violations
  • Family Educational Rights and Privacy Act of 1974: Used to dispute student loan reporting
  • Fair Credit Reporting Act: Governs how credit information is handled
  • Fair Debt Collection Practices Act: Governs third-party collections

Opt-Out Process

  • You can challenge inaccuracies by opting out
  • Important to use online platforms like annualcreditreport.com to pull all three credit reports
  • Utilize Privacy Guard or comparable services for side-by-side comparison

Dispute and Violation Tactics

  • Instances of inaccuracies (dates, amounts, account statuses) can be disputed
  • Violations include misuse of information, inaccuracies, and unauthorized reporting
  • Reporting inconsistencies can be a basis for removal under 15 USC 1681
  • Charge-offs should be contested as they denote a certificate of indebtedness, which is income and should not be on credit reports

Credit Report Management

  • Remove non-mailable addresses by calling credit agencies
  • Ensure only one current address, phone number, and email are on the report
  • Remove incorrect names from reports

Handling Negative Accounts

  • Charge-offs should be removed or updated to 'paid as agreed'
  • Inaccurate credit utilization should be reported and corrected

Student Loans and Privacy

  • Violation of educational privacy can be used to dispute student loans
  • Loans forgiven should result in receiving a check for the forgiven amount

Using Government and Regulatory Tools

  • CFPB: File complaints for inaccuracies
  • FTC: Report identity theft issues

Business Credit

  • Create an LLC using your full name to leverage personal credit for business purposes
  • Consider forming a business in Delaware for privacy benefits

Miscellaneous Tips

  • Get early warning services report - a comprehensive banking transaction history report
  • Opt-out of promotional inquiries that affect your credit score

Preparation

  • Prepare a letter to companies stating opt-out of authorization per 15 USC 6802
  • Collect all necessary documentation for proof of claims

Conclusion

  • Emphasis on using consumer protection laws to rectify credit reports
  • Encouragement to stay proactive in managing credit health

CHATGPT BREAKOUT: Here’s a detailed exploration of each point from the original text, incorporating relevant laws and providing deeper context:

  1. Meeting Dynamics:

    • The meeting serves as a platform for discussing credit reporting issues, inaccuracies, and strategies for improving credit scores. Participants share experiences and ask questions, creating an interactive environment where knowledge is exchanged.

  2. Inaccuracies in Reports:

    • Inaccuracy refers to any incorrect information on a credit report, such as wrong account details, balances, or dates.
    • 15 USC 1681 (Fair Credit Reporting Act): This law mandates that credit reporting agencies (CRAs) maintain accurate information. Consumers have the right to dispute inaccuracies, and CRAs must investigate disputes within 30 days. If they cannot verify the information, it must be removed.

  3. Obtaining Credit Reports:

    • Consumers are entitled to one free credit report per year from each of the three major CRAs (Experian, TransUnion, and Equifax).
    • The process involves visiting AnnualCreditReport.com, where consumers can request reports without a charge. Due to the pandemic, reports can now be accessed more frequently, allowing individuals to monitor their credit more closely.

  4. Using Services:

    • Services like Privacy Guard and Credit Smart provide tools for credit monitoring, alerting users to changes such as new accounts or credit inquiries. These services can help consumers identify potential fraud or inaccuracies quickly.
    • Utilizing these services can be beneficial for maintaining awareness of one’s credit status and taking proactive measures if issues arise.

  5. Disputing Inaccuracies:

    • If inaccuracies are found, individuals can file a complaint with the CFPB. This complaint can serve as a formal record of the dispute and may prompt quicker action from the CRAs.
    • It is advisable to document all steps taken, including dates and representatives spoken to, as this information can be crucial if further action is needed.

  6. Opt-Out Rights:

    • Under 15 USC 6508, consumers can opt out of having their information shared with third parties. This right is particularly useful for individuals looking to limit unsolicited marketing or prevent data breaches.
    • To exercise this right, consumers can typically use a form provided by the credit reporting agencies or directly contact them to request that their information not be shared.

  7. Privacy Violations:

    • The laws under 15 USC 6801-6805 require financial institutions to protect consumer privacy, stating that personal information should not be shared without explicit consent. This includes data shared with credit reporting agencies.
    • Consumers can file complaints with the CFPB if they believe their privacy rights have been violated, which can initiate an investigation into the practices of the financial institution.

  8. Student Loan Protections:

    • The Family Educational Rights and Privacy Act (FERPA) protects student records, including loan information. This law allows students to control the disclosure of their information and restricts access by unauthorized parties.
    • If a student loan company shares information without consent, individuals may have grounds to dispute any inaccurate reporting based on FERPA protections.

  9. Charge-Offs and Income:

    • Charge-offs occur when a creditor deems a debt uncollectible and writes it off as a loss. However, this does not eliminate the debt; it can still be sold to collection agencies.
    • The IRS considers canceled debts as income, and individuals may receive a 1099-C form for tax purposes. Consumers can contest charge-offs by asserting that they are considered income and may not be reported as such.

  10. Debt Collection Agencies:

    • Consumers have the right to request verification of any debt being collected. Under 15 USC 1692, debt collectors must validate the debt upon request. This includes providing documentation that shows the individual owes the debt and that the collector has the right to collect it.
    • If the collection agency cannot provide proof, the debt should be removed from the credit report.

  11. Credit Card Inquiries:

    • Consumers can dispute inquiries that appear on their credit reports if they are not tied to active accounts or if the consumer did not authorize the inquiry.
    • 15 USC 1681b allows consumers to challenge inquiries that do not meet permissible purposes. This law helps protect consumers from unauthorized access to their credit information.

  12. Judgments and Legal Claims:

    • If a judgment has been entered against an individual, they can file a motion to vacate it. This process often involves showing that the individual did not receive proper notice or that the judgment was based on incorrect information.
    • Understanding the grounds for vacating a judgment is critical, as it can involve legal procedures that require careful documentation and adherence to local court rules.

  13. LLC and Business Names:

    • Setting up an LLC with an all-caps name is often recommended for legal clarity and to establish a separate business identity. This can also help protect personal assets from business liabilities.
    • Proper naming conventions can help in legal matters and when applying for business credit, as creditors may perceive the LLC as a distinct entity.

  14. Banking and Credit Reporting:

    • Consumers should be aware of how banks and credit reporting agencies operate, including the information they collect and share. Reading privacy notices and understanding consent agreements can help consumers protect their personal data.
    • Awareness of rights under the Fair Credit Reporting Act and related privacy laws is essential for navigating issues related to credit reporting.

  15. Arbitration:

    • Future discussions will involve arbitration processes and how they can be used to resolve disputes without resorting to litigation. Understanding arbitration clauses in contracts is vital, as they can limit the consumer's ability to take legal action.
    • The need to recognize the implications of arbitration agreements can help consumers make informed decisions when entering into contracts.

  16. Follow-Up Actions:

    • Participants are encouraged to take proactive steps to follow up on credit disputes, monitor their credit reports regularly, and utilize the laws mentioned to protect their rights. This may involve documenting all communications and maintaining records of disputes.
    • Consistency in monitoring one’s credit report can lead to quicker resolutions of issues and ultimately improve credit scores.

This detailed exploration provides an in-depth understanding of each point discussed in the original text, along with relevant laws and their implications. If there are specific areas you want to dive even deeper into or if you have further questions, feel free to ask!

Sure! Here’s a rewritten version of the text, maintaining clarity and coherence, complete with Q&A:

Meeting Introduction:

Hello, everyone! I hope you all are doing well. I just hit the record button. It sounds like Caleb was discussing inaccuracies in credit reporting. Is that correct, Caleb?

Caleb: Yes, that’s right! But then the dog started barking, so I had to mute myself.

Facilitator: Thank you for that. If you see anyone at the top of the screen that needs to be admitted, please let them in since they’ve already been approved.

To piggyback off of what Caleb said about inaccuracies, that’s one of the key elements you can use to get items removed from your credit report. It’s a good idea to pull your report from a service like Privacy Guard or Credit Sesame. For example, if you have a Capital One account and Experian shows an open date of 1/11, TransUnion shows 1/14, and Equifax shows 1/15, that’s inaccurate reporting under 15 USC 1681.

If any of the details don’t match, even if it’s just a cent, a date, or a dollar amount, it can all be removed. You can obtain all three of your reports for free from annualcreditreport.com, and due to COVID, you can get them every month. However, they often send the same report repeatedly.

Caleb: Right, they can be less than reliable sometimes.

Facilitator: Yes, but annualcreditreport.com is still a great resource. Caleb, do they show the reports side by side there?

Caleb: They don’t show them side by side, but you can download them all and print them out to compare each account.

Facilitator: That’s good to know. However, some of you might not want to go through all that effort. If you use Privacy Guard or Credit Sesame, you can do a $1 trial. Just remember to save and download the reports so you can upload them as proof when you make a complaint with the CFPB (Consumer Financial Protection Bureau).

Caleb: Exactly! Having those reports handy makes it easier to challenge inaccuracies.

Facilitator: More importantly than just pointing out inaccuracies, when I prepare a report, I include all violations. If there are 15 violations, I include every one of them. However, please don’t state that all bills are the responsibility of the United States. I’ve seen people make that mistake, and it’s why their issues didn’t get resolved.

Your credit report is considered public information, and you must know how to operate in both the public and private sectors. You have the right to opt out of anything on your credit report. Does anyone know what that law is?

Participants: 15 USC 6508!

Facilitator: Yes! That law clearly states that you have the right to opt out of anything on your credit report. They are actually supposed to send you an opt-out request every 30 days. You know how when you get a new debt collector that sends you a letter saying you have 30 days to respond? They’re supposed to inform you that you have the right to opt out.

If you look at your credit card statements or any banking documents, their terms and conditions state that they do not provide your information to non-affiliates. So, do you think that Experian, TransUnion, and Equifax are considered affiliates?

Participants: No!

Facilitator: Exactly! They are actually third parties. So, you can use 15 USC 6805 to opt out. Take the privacy notice included in your terms and conditions and state that Experian, TransUnion, Equifax, and Early Warning Services are third parties and that they have violated your privacy rights.

If you had a credit card for 12 months and they reported those 12 months of payments, that’s a violation of your privacy rights, and you can calculate that at $1,000 per violation. This can add up quickly!

Caleb: Exactly, and you can see how that can become a substantial amount.

Facilitator: Right! So, if you’re using the address to contact them, make sure to do so with the intention of receiving compensation. When you contact them, let them know you are aware of the violations.

Now, I want to share my screen to show you something.

Caleb: I’m on Google right now, and I want to show everyone the Fair Credit Reporting Act. When you Google it, you’ll see ftc.gov, which is the Federal Trade Commission. This is where you can find the act. Click on the page, and you can access the PDF.

Facilitator: Yes, and you will see everything you need right there, including permissible purposes for reporting. It states that they cannot furnish a report without your written consent.

Caleb: Exactly! When you look at the title, it’s clear that each financial institution has an affirmative obligation to respect your privacy.

Facilitator: Yes! And under 6804, they must not disclose your information unless they give you an explanation of how to exercise a non-disclosure option. You can opt out!

Caleb: This is all crucial information for everyone to know.

Facilitator: Yes, so be sure to copy and paste this information into your complaints. For those who were on the class last week, I told you all to create a letter that states your rights as a federally protected consumer.

You can simply say something like, "Per the Fair Credit Reporting Act, I am opting out of any and all authorization I may have given, whether written, unwritten, verbal, or nonverbal, pursuant to 15 USC 6802."

Caleb: That’s perfect!

Facilitator: Then, create a complaint with the CFPB and upload that letter as proof. You want to make sure you document everything.

Caleb: Exactly. And remember, your credit report is a powerful tool. You have the right to challenge any inaccuracies and hold those reporting agencies accountable.

Facilitator: Absolutely! You can also look up companies that have been sued to see if they have a history of violating consumer rights. This can be beneficial for your claims.

Caleb: Yes, and don’t hesitate to use their words against them. If they have violated your rights, it’s important to assert that!

Facilitator: Thank you all for your participation today. Remember to check your emails for updates, and I look forward to seeing you all in the next class.

If you need any additional modifications or have specific sections you'd like to focus on, feel free to let me know!