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Dissecting Credit Reports

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Did you ever wonder why certain items appear on your credit report?  The answer lies in a federal statute, 15 U.S.C. 1681c.  A consumer reporting agency may not make a report that includes the following items.  I’ve bolded some of the more pertinent items that affect our Tampa Bay area Florida clients.  Not all creditors report, but when they do, they are supposed to provide an accurate report.  Remember whenever settling debt, there are ways to get the debt removed from your credit.

First if they report, we can ask in the negotiations for a trade line deletion. Then all the late pays and the fact the debt was settled for less than what is owed will not be reported any longer.  Second, if the debt buyer we are trying to settle with does not report, then we can obtain proof of payment/settlement and our client can then dispute the item.  The credit bureaus will return to the original reporting creditor for validation and they will not be able to validate that the debt remains unpaid.  Both options will clear the debt from our client’s credit which can help them qualify for a home or a better interest rate on a car for instance.

“(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.

(6) The name, address, and telephone number of any medical information furnisher that has notified the agency of its status, unless—

(A) such name, address, and telephone number are restricted or reported using codes that do not identify, or provide information sufficient to infer, the specific provider or the nature of such services, products, or devices to a person other than the consumer; or

(B) the report is being provided to an insurance company for a purpose relating to engaging in the business of insurance other than property and casualty insurance.”

The above rules do not apply if the report is for a loan or life insurance in an amount reasonably expected to involve $150,000 or more; or for a job that reasonably is expected to or does equal $75,000 or more.

The list of items that must be reported is shorter.  Required information consists of:

1) if a bankruptcy is reported, the Chapter of bankruptcy must be listed; and if the consumer voluntary withdrew the bankruptcy case before obtaining a judgment, the report must indicate the voluntary withdrawal.

2) if a credit score or predictive measure of risk is reported, the score must identify any key factor that adversely affected the score.

3) if a consumer voluntarily closed an account, that information must be noted if the account is included on the report.

4) if a consumer properly disputes credit information, the dispute must be noted if the disputed information is included on a report.

Note that the required items need not be reported unless a contingent event first occurs.

A report may include other information at the discretion of the reporting agency.

If you are having problems qualifying to purchase a home, please consider contacting us.  Because we have represented bankruptcy and foreclosure defense clients for years, this is something we are focusing on now.  There are private lenders we work with who have options to allow you to buy a home a day out of bankruptcy or foreclosure for instance and they don’t charge an arm and leg to do so.  For more information, please contact us at Arkovich Law

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