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

BY John Heath 2 Mar '18March 2, 2018

UPDATE: This article was updated 3/2/2018

On Thursday, March 1^st, 2018, credit bureau Equifax announced that an additional 2.4 million Americans were impacted by last year’s Equifax data breach. The company disclosed that the information stolen from these additional consumers was their name and partial driver’s license number. The attackers were also unable to get the state where the license was issued, the date it was issued, or its expiration date.

The previously reported breach of the initial 145.5 million Americans from May – July of 2017 resulted in the compromise of social security numbers, birthdates, names, driver’s license numbers and addresses. This brings the total to about 147.9 million Americans who have been impacted by Equifax’s data breach, which remains the largest data breach of personal information in history.

Despite millions being affected by this breach, a new survey reveals that half of U.S. adults have not looked at their score or taken steps to find out whether their information is at risk. This inaction could potentially lead to damaged credit records and credit ratings for consumers.

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 millions of Americans 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.

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 state, “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.

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

BY Dan Francom 27 Jul '17October 6, 2017

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.

What Not To Do When Disputing a Negative Item

BY John Heath 21 Apr '16April 20, 2016

Your credit report and has become indispensable to your financial life. Your credit report is used to determine your credit worthiness. Your ability to get a loan for a home, to rent an apartment, to acquire insurance and even to become employed. It is therefore crucial that your credit report is fair, accurate and substantiated. What this means is that you credit report should fairly report the facts that comprise your financial life. These facts should be correct. The credit bureaus who report this information should have taken the time to make sure these facts are correct before they are reported. Unfortunately, this is not always the case. Items are reported that oftentimes do not tell the whole story, are incorrect or have never been checked. In these cases we have a mechanism to remove these listings. This mechanism allows for you to dispute the information with the credit bureaus. …

What the Fed’s Recent Rate Hike May Mean for American Consumers

BY Mark Andrus 8 Feb '16February 5, 2016

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On December 16, 2015, the Federal Reserve decided to raise the target range of its key interest rate, the federal-funds rate, from a range of 0.00% – 0.25% to 0.25% – 0.50%, based on its reasoning that the American economy is recovering at a moderate pace from the Great Recession. In addition, the Federal Open Market Committee forecasted that the appropriate rate at the end of 2016 would be 1.375%, which implies multiple rate hikes throughout the year. The question that lingers is how might these rate increases affect consumers?

To answer this question, it is imperative to understand what the federal funds rate is. Quite simply, the federal funds rate is the interest rate that banks charge each other on loans used to meet reserve requirements. It is the base rate that determines the level of all other interest rates in the United States. Consequently, as the base rate increases, it becomes more expensive to borrow money. An increase in the federal funds rate generally discourages banks from borrowing to meet reserve requirements which they do by lending less money. Meanwhile, a reduction in the rate encourages banks to borrow which makes more money available for lending. …

Student Loans and Marriage – Will I be held responsible for my spouse’s student loans?

BY Daniel Woolston 13 Jan '16January 5, 2016

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When two people are married, performing a mutual inventory of debts is a wise planning tool. Planning now to prevent surprises later helps ensure a relationship begins on the right foot. A common question that arises when people get engaged is whether their future spouse’s student loans could hurt their wallets or their credit.

Most of the time, your spouse’s student loans cannot hurt you. A loan usually names just the actual borrower of the loan, but someone else can also co-sign. A co-signer on a loan bears responsibility for the repayment of the loan along with the signer. Therefore, without your signature on the loan, you generally cannot be held responsible for its repayment. Bringing the debt into the marriage later doesn’t change the name on the loan.

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