Fair Credit Lawsuits WAY up in 2012. Why?

Headline and news outline by credit master and expert witness: John Ulzheimer. 

2012 continues to be a busy year for FCRA lawsuits, FCRA lawyers and FCRA expert witnesses says Ulzheimer.

According to WebRecon, a Michigan based Litigant Data tracking bureau, FCRA lawsuits are up 15% year to date in 2012 over the same time period (January through September) in 2011.

And while the pace of lawsuits has slowed considerably (at one time they were up over 90% year to date compared to 2011) 2012 is still shaping up to meet or exceed 2011′s record numbers.

Often these types of lawsuits involved a consumer plaintiff suing a credit industry player such as a bank, credit reporting agency (or some other form of consumer reporting agency), or a collection agency. The allegations can rage from reasonable procedures to permissible purpose violations (improper access) to re-investigation issues.

• A big part of how ethical credit repair works, is demanding that our clients rights under federal laws are not violated. Collection agencies have no problem threatening to sue our clients for the money that they are trying to collect, so basically we demand for our clients that the collection agencies: 

1. irrefutably prove that the debt they are trying to collect belongs to the client. 

2. that they have proof of ownership or the proper legal assignment of the right to collect the debt. 

If the collection agencies just send a duplicate statement of what they had sent previously, or a "screen shot" from their computer showing that anyone can type information into their database, they did not comply with what the client requested by exercising their rights provided by the FDCPA. Refusal to comply gives the client the right to sue for damages.

If the credit bureaus and original creditors refuse to comply with the clients rights under the FCRA, it is the exact same result. If any entity violates our clients rights under federal law - they deserve to get litigated against.

At Credit Restoration Associates, we build the paper trail for our legal team for both FCRA and FDCPA violation lawsuits. 

Our legal team is available when the "hammer" needs to be pulled out to demand enforcement of the clients rights. We even have access to an expert witness with over 100 cases under his belt with victories in: credit report damage, credit score damage and credit reputation damages.

Call us today for an absolutely free credit consultation and credit report review and see if we might be able to help your situation: Toll Free: 800-648-5157.

NEXT POST:  The Credit Score That You See is NOT the Same as Lenders See

Visit our Website 

Back to the CRA blog homepage:
Credit Repair Va:
CRA Resources:
Credit Repair:
About CRA:

Disputing Credit Report Information, What Happens to my FICO Scores During The Dispute?

By John Ulzheimer President of Consumer Education at SmartCredit.com,

I recently received this question from a consumer regarding a rumor they heard about how disputing credit information impacts their FICO credit scores…

“I’ve read on the Internet that when someone disputes information on their credit reports their credit scores will improve because the disputed item no longer counts in their scores.  Is that true”

As you’ve probably figured out by now, there’s a enormous amount of information about credit scores floating around on the Internet.  Some of it is accurate, a lot of it is not.  This consumer’s question is actually a good one because there is variable treatment of credit information when it’s being disputed.  But, it’s not as simple as saying, “no, it doesn’t count in your score while it’s in dispute.”  Here’s the truth on the matter…

First off, the credit reporting agencies aren’t stupid.  Second, FICO isn’t stupid.  They know that ignoring a piece of negative credit information simply because the consumer doesn’t agree with it isn’t a good idea.  If that were actually true then consumers would challenge everything they don’t agree with and then go out an apply for a loan while the items are being investigated.  Sorry, it doesn’t work that way.

There are two different types of consumer disputes, the initial dispute and the persistent dispute.  The initial dispute is the first time a consumer challenges the accuracy of a credit item.  Normally the credit bureaus will post narrative text that states the consumer disputes the account and that they are in the process of investigating its accuracy.  If the investigation comes back verifying that the credit data is, in fact, correct then that initial dispute text is supposed to be removed.  If the consumer still challenges the accuracy of the data the bureaus will often post persistent text with the account stating the consumer disagrees with it.  And, of course, the consumer can always add a longer 100 word statement to the credit report explaining their side of the story.

The initial dispute can change how the credit scoring model treats the account, but it’s certainly not fully ignored.  Anything negative or debt related is temporarily bypassed while the initial dispute is conducted.  This can sometimes cause the score to increase, although you wouldn’t know that, and it might seem like an opportunity for the consumer to pull a fast one on their lender by trying to time an application to coincide with the dispute.  But, lenders aren’t stupid either.

When a lender pulls your credit report they can see that you’re disputing something.  And since they’re privy to this “while in dispute” strategy many of them have built in policies that will kick out an application submitted by a consumer who has an active dispute in process.  Fannie Mae, the mortgage giant, is one of them.  Point being, it doesn’t really matter how good your score may be…the fact that you’re disputing potentially negative information isn’t a secret and lenders will want your dispute to be finalized before they move ahead.

Look, nobody blames anyone for trying to get a better FICO score.  We all want great scores, right?  But, I have a much better “score improvement” idea…earn great scores by paying your bills on time and staying out of credit card debt and you won’t have to try and beat the system.  You’ll pay lower interest rates, lower insurance premiums, and be treated much better by your lenders.  And, good scores tend to persist because once you’ve gotten a taste of low interest rates you’ll never want to go back to sub-prime land again.


Credit Reporting Expert, John Ulzheimer, is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a Contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry.

Next Post: The Worst Loan That You Can Default On IS .... 

Fantastic Article:

A Credit Score That Tracks You More Closely Than You Think ...

VISIT THE CREDIT RESTORATION ASSOCIATES WEBSITE:

Back to the CRA blog homepage:
Credit Repair Va:
CRA Resources:
Credit Repair:
About CRA:

The Worst Loan That You Can Default On Is.....

 I think we’d all agree that the past few years have been tough on tens of millions active credit consumers. Foreclosures continue to be a huge problem, we’re now in $800 million of credit card debt, and our student loan debt just crossed the $1 trillion mark. This means it’s likely that loan defaults will increase over the next year.

I’m writing this for the consumers who find themselves in one of those difficult places where you have to decide which bills you’re going to pay each month. You can’t afford to pay all of them, but you can afford to pay some of them.

Now, who’s getting your money? Before you answer the question there are a variety of things to consider.

Which default is the worst for your credit reports and credit scores? Which default is most likely to end getting you sued? Which default can cause an interruption of your housing and transportation? And which default is going to cost you the most money?

In order to keep this information digestible, I’ve decided to split it into two parts. Today, in Part 1, we’ll explore the impact of loan defaults on your credit reports and credit scores and how defaulting can potentially expose you to litigation. What you’re going to realize is that there are pros and cons to defaulting on different types of loans.

Credit Reports and Credit Scores

You’re probably thinking, “Dude, I can’t afford to pay all of my bills. I don’t care about what’s going to happen to my credit.” Fair enough. But, while I’ve got your attention…

When you start missing payments and delinquencies start to show up on your credit report there is no hierarchy of “which one is worse?” A late payment is a late payment is a late payment, regardless of what loan or account it’s on. So a 30, 60, or 90-day delinquency on a credit card is just as bad as doing the same on a mortgage loan.

Having said that, missing payments on your mortgage will eventually hurt your scores more than missing payments on your credit card. Why?

The answer is simple: you’ll accrue a much larger delinquent balance on a mortgage than you will on a credit card. When you miss a credit card payment, the only thing that’s past due is the minimum payment. When you miss a mortgage loan payment, the repercussions could cost you thousands of dollars. And when it comes to calculating your FICO scores, there’s a component that measures past due balances.

Bottom Line: For your credit score health it’s best to miss credit card payments over mortgage or auto loan payments only because the past due balance is likely to be lower.

Litigation

You should be very concerned with the prospect of being sued if you default on any of your credit obligations. You can’t ignore the guy who knocks at your door and serves you with the complaint. Well, you can, but you’ll lose by default and then you’ll be subject to a default judgment. If you do choose to fight the lender, whom you actually do owe a ton of money, you’ll be paying a lawyer to do it. That’s not a cheap date.

While any loan default can lead to you being sued, it seems to be much more common if you default on credit card debt. Normally, it takes 6 months for a credit card issuer to “charge off” delinquent credit card accounts and then they’ll likely sell them to a debt buyer. Debt buyers are notorious for suing debtors for defaulted credit cards.

If you find yourself in this situation it’s not a bad idea to make a settlement offer to the credit card issuer before your debt gets shipped off to the collection agency. They’ll make more from a settlement than they’ll make selling the debt for pennies on the dollar.

If your debt does make it to a collection agency, offering a settlement is still a viable offer and you can do this on your own. You don’t have to hire a 3^rd party debt settlement company to make settlement offers on your behalf (and charge large fees at the same time).

Bottom Line: To reduce the possibility of being on the wrong side of a collection lawsuit, make sure you pay your credit cards on time and preferably off, as soon as possible.

Article source: Mint.com

Next Post: Can Bad Credit Ruin Your Job Search?

Fantastic Article: Reducing Debt in 2012

A Credit Score That Tracks You More Closely Than You Think ...

VISIT THE CREDIT RESTORATION ASSOCIATES WEBSITE:

Back to the CRA blog homepage:
Credit Repair Va:
CRA Resources:
Credit Repair:
About CRA:

The Worthless Online Dispute System

I do not recommend using the online dispute system that Equifax, Experian and Transunion offer because they are pretty much useless in regards to attaining true deletions of negative credit items.

The online dispute system, otherwise known as the "Expedited Dispute Resolution" is outlined in Section 611a(8) of the Fair Credit Reporting Act.


The key phrase to note is:

"the agency shall not be required to comply with paragraphs (2), (6), and (7) with respect to that dispute" if they delete the tradeline within 3 days."

• Paragraph 2 states that it is mandatory for the CRA to forward your dispute and all of the associated records you present to the creditor.

• Paragraph 6 states that the CRA must supply you with written proof and results of the dispute process.

• Paragraph 7 states that the CRA must supply you with the process of verification on demand from the person making the dispute.


The problem is that the law isn't detailed enough to say permanently delete or suppress the derogatory item.


The CRA can perform a "soft delete" for about a month and then the derogatory item can recur when the creditor reports it again in the subsequent 30 day cycle. This is because the CRA's aren't obliged to tell the creditor you disputed it at all!


This compounds their defense strategy of attrition and delay by allowing the consumer to think they are getting a permanent deletion, but it is only temporary solution. Since the creditor never knew it was removed, they will report it again and the CRA will put it right back on your report. Moreover, you have no proof the investigation or the supposed results ever took place that you would have received if the dispute was done by mail by a reputable credit repair company like Credit Restoration Associates.


See Below for the specific wording from the Fair Credit Reporting Act.

(8) Expedited dispute resolution. If a dispute regarding an item of information in a consumer's file at a consumer reporting agency is resolved in accordance with paragraph (5)(A) by the deletion of the disputed information by not later than 3 business days after the date on which the agency receives notice of the dispute from the consumer in accordance with paragraph (1)(A), then the agency shall not be required to comply with paragraphs (2), (6), and (7) with respect to that dispute if the agency

(A) provides prompt notice of the deletion to the consumer by telephone;

(B) includes in that notice, or in a written notice that accompanies a confirmation and consumer report provided in accordance with subparagraph (C), a statement of the consumer's right to request under subsection (d) that the agency furnish notifications under that subsection; and

(C) provides written confirmation of the deletion and a copy of a consumer report on the consumer that is based on the consumer's file after the deletion, not later than 5 business days after making the deletion.

(b) Statement of dispute. If the reinvestigation does not resolve the dispute, the consumer may file a brief statement setting forth the nature of the dispute. The consumer reporting agency may limit such statements to not more than one hundred words if it provides the consumer with assistance in writing a clear summary of the dispute.

(c) Notification of consumer dispute in subsequent consumer reports. Whenever a statement of a dispute is filed, unless there is reasonable grounds to believe that it is frivolous or irrelevant, the consumer reporting agency shall, in any subsequent report containing the information in question, clearly note that it is disputed by the consumer and provide either the consumer's statement or a clear and accurate codification or summary thereof.

(d) Notification of deletion of disputed information. Following any deletion of information which is found to be inaccurate or whose accuracy can no longer be verified or any notation as to disputed information, the consumer reporting agency shall, at the request of the consumer, furnish notification that the item has been deleted or the statement, codification or summary pursuant to subsection (b) or (c) of this section to any person specifically designated by the consumer who has within two years prior thereto received a consumer report for employment purposes, or within six months prior thereto received a consumer report for any other purpose, which contained the deleted or disputed information.


Call Credit Restoration Associates toll-free: 1(800) 648-5157 to have the professionals attain permanent deletion of inaccurate, obsolete or un-verifiable negative items from your credit reports.

NEXT POST: The Girl Scouts add Good Credit Merit Badge!


Six Ways To Beat Late Fees - That EVERYBODY Needs To Know


VISIT THE CREDIT RESTORATION ASSOCIATES WEBSITE:


Back to the CRA blog homepage:
Credit Repair Va:
CRA Resources:
Credit Repair:
About CRA: