Category: Credit Repair News

Know Your Right to Fair and Accurate Credit: How to Fix Credit Errors After Data Breaches and Identity Theft

In light of the Equifax data breach, we understand consumers are concerned about their personal information and confused about what to do to protect themselves should they be among the 143 million American’s whose information was compromised. We here at Lexington Law understand your concerns and want to clarify your rights as they relate to credit errors that might occur because of the breach, and help you understand the law is on your side to help fix those errors.

On Thursday, September 7th, credit bureau Equifax announced that the personal information of up to 143 million Americans had been compromised. From May-July of this year, a massive cybersecurity breach resulted in the compromise of millions of social security numbers, birthdates, names, driver’s license numbers and addresses. While Equifax is offering identity theft protection and credit monitoring services to those that were affected by the breach, it is important to keep in mind that the bureau cannot repair any kind of credit damage or errors that may have resulted from the breach as they are not structured to do so.

Equifax’s terms and conditions states “We do not offer, provide, or furnish any products, or any advice, counseling, or assistance, for the express or implied purpose of improving your credit record, credit history, or credit rating. By this we mean that we do not claim we can ‘clean up’ or ‘improve’ your credit record, credit history, or credit rating.” This is where Lexington Law comes into play because we CAN work to repair your credit—it’s what we were founded to do, and what we have successfully done for thousands, for more than two decades.

According to The Fair Credit Reporting Act (FCRA), Fair Credit Billing Act (FCBA) and the Fair Debt Collections Practices Act (FDCPA), you as the consumer have the legal right to dispute any inaccurate items that may appear on your report as a result of this data breach, or otherwise. Our firm’s 13 years of experience fighting for consumers have helped us develop tools and strategies that advocate for you and help fight for the credit you deserve. We help consumers utilize consumer protection laws that were created to keep you from becoming a victim of the credit reporting system, and ensure that any information that appears on a client’s credit report is fair, accurate and substantiated.

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How will you be affected by new reporting standards of public records on your credit reports?

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In March, 2015, the three main credit bureaus launched an initiative called the National Consumer Assistance Plan in order to make consumers’ credit reports more accurate and easier for consumers to correct errors on their reports. Starting July 1, 2017, these bureaus (Experian, TransUnion, and Equifax) will change the way they collect and report civil judgments and tax lien information on credit reports. These changes may not only affect what items are appearing on consumers’ credit reports, but may also help give a boost to their credit scores.

Reporting of public records on credit reports

The new initiative from the credit bureaus will affect public records having to do with tax liens and civil judgments.

  • A tax lien is a lien that is imposed against one’s property to secure the payment of tax, and may be a result of failing to pay income tax or other taxes. Although unpaid tax liens may remain on a report indefinitely, in practice credit bureaus may remove them after 10 years, and must remove a paid tax lien after 7 years.
  • A civil judgment is a formal decision made by a court following a lawsuit. For many consumers, the most common civil judgment on a credit report results from a lawsuit by a creditor for failing to pay a debt. Civil judgments may stay on a credit report for up to seven years from the date of entry.

There will be two primary ways this new standard will affect how the credit bureaus obtain and report this data on consumers’ credit reports. First, in order for a tax lien or a civil judgment to appear on a credit report, the public record must contain the following three items of information: (1) name, (2) address, and (3) Social Security Number and/or date of birth. This standard not only applies to new records that may become available, but also existing data that may already be reported on a credit report. Second, public records that are reported on credit reports must be checked for updates by the bureaus every 90 days to ensure their accuracy. If the records are not checked then they should be removed from the credit report.

The higher standards for public records are estimated to improve the credit reports of roughly 12 million U.S. consumers. Because this change will affect such a great number of people, it is important to review your personal credit reports regularly for possible errors.

Effect on consumers’ credit scores

With the possible removal of negative information on consumers’ credit reports, the effect on an individual’s credit score will vary. According to a FICO study, of the 12 million consumers that would have a public record removed because of these new standards, approximately 11 Million would see some kind of increase in their overall FICO score. The amount of the increase, however, may not be as substantial as one would think. FICO estimates that for the majority of these people the increase in their FICO score would be less than 20 points. Although the bump in credit score may not seem substantial, it may help many people increase their score enough to secure a new loan or mortgage.

It is important to remember that although one or more public records may be removed based on these new standards, there are still many other factors impacting your credit score. There may be additional negative items affecting your payment history besides the lien or judgment that was removed. Other factors that will influence your score include your credit utilization, length of credit history, new credit accounts, and credit mix.

Learn how you can start repairing your credit here, and carry on the conversation on our social media platforms. Like and follow us on Facebook and leave us a tweet on Twitter.

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How to Spot Illegal/Unethical Credit Repair Companies

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Unfortunately, many credit repair companies try to snare consumers by offering credit repair through illegal or unethical tactics. Credit repair companies themselves are not illegal — in fact, they offer a valuable and much-needed service to many Americans — but they must abide by certain rules and laws if they are to be trusted.

The Credit Repair Organizations Act (“CROA”) is a federal law that protects consumers from unfair and deceptive practices by credit repair organizations. Many states also have their own laws that regulate credit repair organizations. A credit repair organization that engages in practices prohibited by CROA is likely unethical and should not be relied on for your credit repair needs.

How can you spot an illegal or unethical credit repair organization? If you see an organization engaging in one or more of the following illegal practices, then chances are the organization is violating CROA and should not be trusted.

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FICO Score 9: New Model, New Answers

The Fair Isaac Corporation (FICO) is changing their scoring model. After talks with the Consumer Financial Protection Bureau (CFPB) and lenders, FICO developed the Score 9 model, an initiative aimed at providing consumers with easier access to credit. Review the following questions and answers to learn more about how the change affects you.

What has changed with the FICO Score 9 model?

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