Re: Whats the fastest way to improve credit? - Posted by Clearing Erroneous Credit Entries
Posted by Clearing Erroneous Credit Entries on December 11, 1999 at 21:08:09:
Here’s a related article I found:
Clearing Erroneous Credit Entries
by Jonathan A. Goodman, Esq.
Do you have customers who, but for a mistaken entry on
their credit report, would otherwise qualify for a
mortgage? Recognizing the importance of the credit
reporting system, and its potential for error, Congress, in
1970, enacted the Fair Credit Reporting Act (Title 15,
United States Code, Section 1681 et seq). Among its
purposes was to require credit reporting agencies to adopt
procedures to meet the needs of commerce for accurate
credit information, while recognizing the consumer’s need
for confidentiality and relevancy. Though the Act has
many provisions, there are a handful of sections which are
especially useful to a typical borrower.
If a consumer is denied credit because of information
contained in a credit report, the lender must notify him of
the credit agency which generated the report (section
1681m). Upon request of the consumer, every credit
reporting agency shall provide a credit report identifying
all information in the file, the source of the information,
and anyone who ordered a credit report on the borrower
within the preceding six months. The agencies must also
disclose the dates, payees, and amounts of any checks
upon which any adverse credit characterization of the
consumer is based (section 1681g). If the borrower
requests the credit report within 30 days after being
denied credit, the credit reporting agency must provide the
report without charge (section 1681j).
Perhaps the most significant feature of the Fair Credit
Reporting Act is section 1681i which allows a borrower to
dispute the completeness or accuracy of any information
contained in the credit file. The borrower needs to make
the dispute known to the credit agency. It is strongly
suggested that this notice be given in writing. The agency
must then, within a reasonable period of time,
reinvestigate the adverse information. If the information is
found to be inaccurate or can no longer be verified, the
credit agency must delete the disputed information
(section 1681i(a)).
Following the deletion, the credit company must furnish
notification of the deletion to any person designated by
the borrower who has obtained a credit report on the
creditor for employment purposes during the previous two
years, and anyone who obtained a credit report for any
other reason during the previous six months (section
1681i(d)). The reports must be furnished at no charge to
the consumer (section 1681j).
If the reinvestigation does not resolve the dispute, the
consumer may file a statement, not exceeding 100 words,
identifying the nature of the dispute (section 1681i(b).
This statement must then be added to the borrower’s
credit file and be contained in all subsequent credit reports
ordered.
In the event a consumer credit reporting agency fails to
honor any of the requirements imposed by the Act, it is
liable to the consumer for actual damages, costs of
enforcement (including attorney fees), and punitive
damages, if the agency’s failure is found to have been
willful.
Armed with knowledge of the above, the conscientious
borrower should be able to correct any inaccurate credit
information which may creep into his or her credit file.
This may be all you or your investor needs to approve a
loan.