Can credit repair really raise your score

Can credit repair really raise your score?

Credit repair firms make promises they can't keep

In a recent Consumer Federation of America survey, more than half of all respondents thought credit repair firms were a legitimate way to improve a credit score. In reality, nothing could be further from the truth.

What these firms typically do -- and this was very common last decade -- is use a technique to temporarily raise your score by a significant number of points for just a few weeks before it plummets back down again. But the credit bureaus have gotten wise to this technique over the years.

Anyone who says they can magically eliminate bad items on your credit report is telling you a big lie. Keep your money in your own pocket and don't give it to them for their supposed "services"! Better yet, use it to pay the debts you owe and that will improve your credit score on its own.

Know that there is no magic wand for credit repair. If you need help, get in touch with the National Foundation for Credit Counseling. But if you understand these basics and put them into practice in your life, your credit score will rise slowly but surely.

Raise your credit score with this knowledge

If you're suffering from poor credit, there are several surefire ways to get your credit healthy again. Follow these tips and you'll be well on your way:

• Always pay your bills on time and pay down the total amount you owe.
  (accounts for 35 percent of your score)
  If you forget all else after reading this, remember this one! This is the single most important rule for having a good credit score.


•  Keep a low credit utilization rate.
  (accounts for 30 percent of your score)
  Let's say you have a credit card with a $10,000 limit. If you're carrying a balance month-to-month of $3,000, you're only using 30 percent of the total limit. But if your credit limit is suddenly dropped to $3,000, then suddenly you're using 100 percent of what's available to you. That's yet another reason to always pay down credit card debt as quickly as possible. You always want to stay at credit utilization of 30 percent or less.


• When you pay off a credit card, don't close the account.
  (accounts for 15 percent of your score)
  Doing so only reduces your available credit and drives your score down. You want to have between four to six lines of credit. Be sure to use them twice a year -- even if it's just for a dollar store purchase -- and pay them off right away. That will keep them active in your credit mix.

If you're facing a huge new annual fee on a card that has a zero balance, try "leapfrogging." That's my term for using the 45-day window you have before any new terms of service go into effect to shop around. So once you get notice about a new annual fee, start looking around for other no-fee credit cards. Submit your application and once you get your new no-fee card, then go ahead and shut down the original one that wanted to spring a fee on you.

The remaining 20% of your credit score is comprised of what types of credit make up your credit mix (10%) and how much new credit you have in your life and how quickly you took it on (10%).

Here is How to Repair Your Bad Credit Report

Here is How to Repair Your Bad Credit Report

 

Bad credit reports comes with nightmares that nobody admires. If you choose to stick your head in sand and ignore your wake up call, it is totally fine and if you choose to overcome your fears and reclaim your credit standing, congratulations and here are a few tips for you.

I would say start with checking your credit standing but since you are reading this article, I am sure you´ve done your homework and assessed it and the results are not that amusing. So, let’s get to business

Step One: Request reports from several credit bureaus & companies

If you are in the United States, the Fair and Accurate Credit Transactions Act (FACTA) entitles you to a free credit report from leading credit bureaus in the country. It is also worthwhile to pick copies from the credit reporting companies. This is important because you do not know what has been submitted out there.

The basis of collecting reports from several companies is to have the different versions of the story.

Step Two: Carefully analyze your reports

Keep in mind that credit reports are not auto generated but are written and submitted by humans. This should give you the benefit of doubt that whatever is in that report is true or completely accurate.

Carefully go through your credit reports to make sure that the information in it is accurate and up to date. You should check out for address, types of accounts whether revolving, installment or join, collections, financial obligations records, consumer statements and credit inquiries.

These are the areas you should pay close attention too when examining your credit reports. It is often advisable that you audit your own credit report but I understand this can be boring to some people so if you feel you will not be able to read your credit reports to the end, I suggest you find somebody who can demystify the info into notable points you can easily suggest. Either way, ensure you are familiar with the content of your report.

Review your payments

Payments cover a larger percentage of your credit report since credit is all about borrowing and paying and since you only borrow for limited number of times, only repaying your debt remains to be everybody´s interest.

If there are missing payments, make sure to lodge a complaint with your credit company since a single missing payment can cause serious setback on your credit score.

However, be sure to talk to your lender before throwing turn trams. Sometimes the report must have just been hurried off or you may have made a payment too soon and you expect it to reflect on your report.

 Depth of credit

This is the length of time you´ve been using credit.

Older credit accounts are helpful when arguing your case out to correct your credit especially if it the older account was good or excellent.

You should carefully review your old credit account before closing it because it is your biggest bargaining chip

Recent credit accounts

New credit accounts are considered risk and they can lower your credit score in the first place. However, the consistent payment in the accounts will indicate responsibility and build your creditors confidence

Ensure that your recent credit accounts appear on your report- Although they may bear some degree of negative impact, the ultimate goal is to fix your credit and it will help a great deal.

Amount of Credit

It is hard for a credit company to post an inaccurate credit amount on your report. However, for revolving credits accounts, the amount carried forward may be inaccurate especially if you make irregular payments.

Step Three: Dispute all conflicting data

After carefully auditing your reports and noted down all conflicting data, it is time to lodge complains, the idea that complains may hurt your credit score is a misconception. Companies against any items of your credit report are never score and there is no way it will impact your score. If there is anything that will impact your credit score is failing to complain.

There are a number of ways to file complaints regarding your credit reports. One, you can call the number listed on your credit report and file your complain and two, you can file your complain online by visiting credit bureaus website.

It is not necessary to file complains with all credit bureaus as only one is enough. The credit reference bureau will forward your complain to your credit company and they will be required to reply within 30 days of the complaint. If they respond with corrections, the credit company is required to post the corrections to all bureaus they submitted the inaccurate report.

If you and your credit provider cannot resolve a dispute say have failed to reconcile a missing payment, you are allowed to attach a statement against the item on your report. For example, you may indicate ´I never missed any payment with company X´. This statement will be available for 2 years and is accessible to anybody who accessed your credit report-

Reference bureaus allow 30 days for credit companies to respond to complaints. If after 30 days not response id heard from your provider, the reference bureau will delete the inaccurate record and inform you and other bureaus. If after the correction you still feel some information is missing or inaccurate, you may have to visit your credit company in person and settle the deal personally.

For late payments, you may consider visiting your credit provider and explain yourself. These guys are humans like you and me and will consider going easy on you if you take the initiative to explain why you missed a payment or submitted your payment late.

Step Four: New report

Be sure to wait for 2 to 3 weeks before requesting for a new credit report after the corrections have been posted. In other cases, credit companies will acknowledge that the data is accurate but request more time to fix the discrepancy.

Purchasing credit score is also another option of seeing that your credit score improves. I hope these four steps to improving your credit score works with you. Remember, the best way to correct bad credit is avoiding one in the first place.

- See more at: http://www.elitepersonalfinance.com/here-is-how-to-repair-your-bad-credit-report/#sthash.KcC0bPsz.dpuf

Behind the Scenes at a Business Credit Bureau

Behind the Scenes at a Business Credit Bureau

You may have a mental image of how credit reports are created: from an orderly exchange of clean, tidy data flowing seamlessly through some kind of standard method, untouched by human hands and delivered straight to your web browser.  But that would be wrong.  As with any well-executed professional endeavor, it only looks that effortless.

I entered the world of credit data in the late 1990s as part of the team that delivered one of the first business credit reporting platforms on the internet.  Back then, I thought a lot like you.  I assumed that credit data comes from nimble-fingered accountants and therefore would be inherently orderly.  I assumed that the bigger the company sharing trade experiences with us, the more exacting and precise the data was likely to be.

At least now I no longer have a 9-track computer tape reader in my office; all of our data is transmitted digitally and we don’t have to wait for FedEx to deliver physical media.  Other than that, not much has changed.

Consider the lowly data entry clerk who manually inputs much of the information into these systems.  They often aren’t paid enough to think or care deeply about what they are doing, and in many cases, they don’t have the time to notice, much less correct, misspellings like COMAPNY.  So let’s imagine three different creditors sharing their trade experiences about a customer who I will give the name of Walt’s Cigar Rentals.  We might get the name and address information in the three following ways:

WALT’S CIGAR RENTAL

123 WALT AVE

WALTVILLE, VT 01342

WALTS CIGAR RENTALS COPMANY

123 WALT

WALTVILLE VT

WALT’S CIGARRNTL CO

123 WALT STRET

MALTVILLE, VERMONT 1342

And this is a simple example.  Don’t get me started about non-US addresses, often entered into US-made software that doesn’t understand, for instance, that many countries have four or six digit postal codes, rather than five like ours – Canada’s is not even all numeric.  And while we’re on the subject of Canada:  Many addresses in Canada could be expressed in either English or French and we still have to recognize them as the same!

Now comes a user searching for this company, and they might enter the name in yet different ways.  If they search for WALT’S with an apostrophe, they won’t find the second version.  If they narrow the search to MALTVILLE, then the misspelled version, WALTVILLE, will be omitted.  When you consider that we can get trade experiences on any one company from hundreds of creditors, and that the search terms entered by thousands of users may vary in their own right, you’ve encountered the fundamental challenge of processing all this data:  How does a computer, which is famously simple-minded and literal about matching, recognize hundreds of variants as the very same company?

Even if the computer recognizes all the different variations, who wants their business credit report cluttered with all of them?  The debtor should appear once, with the name and address correctly rendered, so that users can make quick credit decisions with confidence.  Nothing inspires doubt like obvious mistakes in the representation of company names and addresses.

This is where data hygiene enters the picture.  If that evokes images of data elves scrubbing data with (industrial-strength) soap and water, that is not, metaphorically speaking, far from the truth!  But to digest data in real time and avoid falling behind, this process must be automated.  We must patiently teach computers to correct random errors introduced by humans.  It is this requirement that keeps people like me awake nights.

Thankfully, we’ve had nearly two decades to fine-tune the process, and it’s getting better all the time.  Using a combination of postal standardization software, tools for us to capture intelligence over time about common misspellings and odd abbreviations, and an extensive layer of proprietary software, the three sample addresses above would be recognized and reported by our system in a standardized way:

WALTS CIGAR RENTALS CO

123 WALT ST

WALTVILLE VT 01342

Of course there’s far more to it.  I haven’t discussed other interesting issues such as how accounts receivable can be aged differently by different companies, how the methods of expressing data points like high credit and days-to-pay can vary or just be plain incorrect, and the fact that the export and transmission of trade experience data is not always 100-percent automated by the creditor, resulting in constant small changes in the data layout and even the file format.  Our system handles roughly 80 percent of the data sent to us automatically in spite of this, and human intervention for the rest is often a matter of minutes.  It takes a long time and a lot of experience to achieve such levels of automation with such unruly data.

Nor have I mentioned the need to remove non-objective comments stashed into data fields not meant for such things.  It would not do for our business credit reports to include some clerk’s notation appended to a company name that THIS CUSTOMER IS A PAIN!  In addition, we deal with cryptic notations or acronyms that have meaning only within the collection department of a company – or within an industry.  So we have to recognize when MACYS EAST COAST ACCOUNTS should really just be MACYS INC, or that MACYS INC EDI just means that the bills are paid by “electronic data interchange” and so the EDI can be removed as superfluous for credit reporting purposes.

We have a large stable of internal “sanity checks,” too.  They help to ensure that, for instance, a creditor didn’t accidentally send us the same file they sent last month, or the same month last year.  Or that the total portfolio balance doesn’t vary by a suspicious amount month-to-month, indicating a possible malfunction in the creditor’s data export.  We have staff to contact creditors and verify suspicious changes or request corrected replacement files.

Finally, we have mechanisms to guard against credit fraud.  It’s rare, but not unheard of, for someone to set up one or more fake companies that share contrived trade experiences just to inflate the credit scores of certain slow-paying or non-paying debtors.  Surprisingly, there are telltale signs in such data that we look for regularly.

3 Quick Business Credit Report Red Flags to Avoid Bad Debt

3 Quick Business Credit Report Red Flags to Avoid Bad Debt

Extending credit is a requirement of doing business today. This necessity unfortunately opens you up to credit risk and the potential for bad debt.

While you may not avoid all credit risk, credit managers are able to greatly reduce their likelihood of a collection account or bad debt by pulling a business credit report.

Good credit managers are able to read a credit report to understand how a company has historically paid their bills. Great credit managers are able to use a company's credit report to predict how they can expect to be paid.

Within the report, are red flags that these great credit managers look for to avoid bad debt.

The 3 Bad Debt Red Flags on a Business Credit Report

Knowing how to read a business credit report is a requirement of any good business credit professional. It is the great ones that are able to use a report to avoid the likelihood of bad debt.

Here are 3 red flags that they look for to reduce their credit risk.

1) Low Business Credit Score

Business credit scores give you an idea of a company's risk potential. Each business credit bureau has their own scoring system, but the scores are usually calculated based on factors in the following four areas:

1. Payment history


2. Current level of indebtedness


3. Current level of delinquencies


4. Length of credit history

Each bureau will tell you what range of scores they consider high risk. On an Ansonia Business Credit Report, a risk score of 70 or lower is considered high risk.

A low score is not cause to deny a company credit on its own; use your judgment here. If the company has a low business credit score and other adverse information on their report (such as flags #2 and #3 below), you are probably better off working with them on cash terms.

2) Credit Alerts

Credit alerts are never a good sign. Ansonia's are displayed in bright red, hoping to literally "alert" our customers of the adverse information.

The severity of the credit alert can range greatly, from a bankruptcy to a slow pay.

While this is not a hard and fast rule, alerts can be grouped into two categories: approach with caution and approach with EXTREME caution (creative right?)

Approach with caution

• On cash terms


• Slow pay


• Phone disconnected


• Returned check

These are often early warning signs. For example, if a company is starting to have cash flow issues, you might see a "slow pay" or "on cash terms".

It is important to note that alerts in this category can sometimes be explained:

Slow pay - possibly a billing error

Phone disconnected - the company just moved offices

Regardless, approach these with caution; an alert is still an alert.

Approach with EXTREME caution

• Bankruptcy filed


• Fraud account


• Credit revoked


• Judgment filed


• Write-off


• Collection Account

Can you imagine if your company had one of the above alerts posted on your company credit report? These are big, bright, flashing red flags. They almost always indicate that a company is in trouble.

If one of the above alerts is present, cash terms are recommended over extending a credit line.

Credit alerts are never good. Regardless of its severity, an alert is always cause for further investigation. They are the cause of a lot of bad debt and write offs. When you see one, be careful.

See a full list of Ansonia's credit alerts here.

3) Increasing Days to Pay and an Abnormal Number of Credit Inquiries

One of the best early warning signs on a company's credit report is an increasing number in a company's days to pay. This increase is especially worrisome if it is coupled with an abnormal number of credit inquiries (the number of times a business credit report has been pulled).

What is an abnormal number? Look for a trend here. For example, a company has consistently had 4 inquiries on their credit report, and in the most recent two months has had 12 inquiries.

The combination can often signify that the company is in trouble. It often means that they are having trouble paying their current creditors (increase in days to pay) and are out looking for new creditors (abnormal number of credit inquiries).

Pulling a business credit report before extending a credit line can drastically decrease your credit risk. There are many things to consider on a report and these three are some of the worst in terms of risk potential. Avoid them and you can greatly reduce your chances of taking on bad debt.

Argument for a Risk Monitoring Policy

Argument for a Risk Monitoring Policy

Reviewing the credit report of new customers is a basic business practice that's essential to limit your company's risk of bad debt and write-offs.

If that's the extent of your credit department's risk management, however, your business is still vulnerable to preventable losses, and you may be missing out on revenue-generating opportunities as well.

A risk monitoring policy can help you identify customers who require credit reviews on a frequent basis so you can both protect your bottom line and grow your business.

Why Every Business Needs a Credit Risk Monitoring Policy

Vetting new customers and setting terms is only part the equation when it comes to mitigating risk. Performing regular reviews of customer payment history and reevaluating the credit terms you've extended is equally important.

In the day-to-day operations of a business, changes that can impact creditworthiness take place continuously. A well-developed risk management strategy not only protects and creates value; it also addresses and relieves uncertainty and allows your business to continually improve.

The Aim of a Risk Monitoring Policy

A well-defined risk monitoring policy should outline the steps necessary to assess which customers should be reviewed more often.

To provide you with the framework to spot changes in customer behavior that warrant a change in review status, your risk monitoring policy should be integrated into all of your credit management processes, and it must be tailored to your company's unique requirements.

A systematic, timely, inclusive and transparent risk monitoring policy will accurately evaluate customer stability, as well as a customer's ability to pay for the goods or services you provide.

A well-designed policy that's both iterative and dynamic takes human and cultural factors into account. In order to allow you to identify those customers who need more frequent reviews, it must be based on fresh, reliable credit data and intelligence.

How to Develop a Risk Monitoring Policy

To be effective, risk monitoring needs to zero in on both negative and positive changes. If positive changes in a customer's financial situation aren't noticed, your business can miss out on opportunities to improve your relationship or increase sales.

If negative changes in a customer's behavior or circumstances are overlooked, your risk of not receiving payment for the goods or services you're supplying increases.

In order to determine when to perform customer credit reviews and how in depth they need to be, divide your A/R accounts into groups based on history and perceived risk. For example, your A/R portfolio could be divided up into groups of:

• Larger accounts that potentially represent the greatest financial loss and need to be monitored closely year-round


• Long-term customers who've always paid on time and have a spotless business credit report who only need an annual review


• New customers who are reviewed quarterly until they've shown they're reliable payers


• Customers with any history of late payments who are evaluated monthly or even weekly


• Customers who you've put on prepayments or C.O.D. terms who are reviewed monthly or quarterly to determine if they qualify for terms

The assessment policy you develop should allow ample flexibility so groups can evolve to meet the changing needs of your business.

Reliable Credit Information Plays a Crucial Role in Risk Monitoring

Up-to-date credit intelligence and analysis tools are critical for successfully implementing a risk monitoring strategy.

When you're looking for a resource to supply credit information, consider the following factors:

• Integrity of the data - Is it validated?


• Breadth and depth of the data - Does it come from a variety of sources?


• Technology - Does the provider use the latest technology and tools?

At safe consulting services, our goal is to provide accurate, real-time business credit data and cutting-edge tools that make it easy to assess and monitor risk. Contact us today to learn more about our innovative products.

How to Audit and Rebuild a Dated Credit Risk Policy

How to Audit and Rebuild a Dated Credit Risk Policy

A credit risk policy sets forth standards, procedures, and definitions that guide the credit decisions made by a company, with the overall goal of mitigating credit risks.

As market conditions evolve and the financial situations of credit customers change, your existing credit policies may become out of date and inapplicable to evaluating new credit customers and modifying the terms governing existing ones.

By using reliable credit indicators, such as business credit reports and other financial data, you can revise and rebuild a credit risk policy to maintain low risk for your company while providing customers with the credit terms they need. Here are some ways to ensure a dated credit risk policy is up to date.

If you believe that a current credit risk policy is no longer valid, a careful audit of the policy will give you a foundation from which to make changes and revisions. With the assistance of credit managers and financial experts, plus data from business credit reports and other sources, assistance is available to assess how current credit risk policies are affecting your company.

If you believe that you are taking on too much credit risk, or that the evaluation procedures are not accurately identifying both good and bad credit customers, you can proceed to a detailed evaluation of your credit risk policy.

Look at elements of your credit risk policy and how you currently handle factors such as:

• Application requirements.


• Credit review policies and sources.


• Approval procedures.


• Credit limits.


• Prefunding, collateral, or down payment requirements.


• Characteristics of responsible parties.


• Financial and market conditions, both general and in specific industries.


• The role of business credit reports, references from other companies, or other credit data in your decisions.


• Signs of increasing or deteriorating credit worthiness.


• Procedures for increasing or decreasing credit limits.

When you have this information available, you can use it to rebuild your out-of-date credit policy. For example, if you know that a specific industry or business segment is experiencing difficulties, you may need to impose more stringent credit requirements for companies in that industry.

If your current sources for credit data and business credit reports are insufficient, you will know that you need to expand your acquisition of credit data to other credit reporting agencies and financial companies.

You may use a procedure such as the following for reevaluating and reestablishing a customer's credit standing (dollar amounts listed are for example only; your specific dollar limits may be higher or lower):

• Establish a threshold dollar amount for reevaluation of customer cre dit. For example, you may set an AR threshold of $200,000 for each customer.


• For customers with an AR threshold above $200,000, you may want to reevaluate their credit terms every month without taking action. Contact them every three months. Set new credit limits every four months based on the date you've collected over that same period.


• For customers with an AR below $200,000, you may feel comfortable establishing longer periods for reevaluation and resetting of limits. For example, you may reevaluate credit terms every four months and contact them every six months. New credit terms could be set up every eight months, as needed.

When you assess a customer's current credit worthiness, pay particular attention to factors such as:

• Credit history: Past credit behavior that indicates level of ability and willingness to repay.


• Company financial status: Customer company's debt burden, income, assets, and other indicators of financial stability.


• Credit limit: How much credit you are willing to extend to the customer.


• Frequency of credit use: How often, and to what extent, a customer uses credit.

Ansonia Credit Data's in-depth business credit reports and associated data give credit managers the data they need to make informed credit decisions and establish workable, mutually beneficial credit risk policies. Contact safe consulting services today for more information on our detailed, reasonably priced business credit reports and how they can help you when making financial decisions for your company.

Fair Credit Reporting Act

Fair Credit Reporting Act

Introduction

An Act To amend the Fair Credit Reporting Act, to prevent identity theft, improve resolution of consumer disputes, improve the accuracy of consumer records, make improvements in the use of, and consumer access to, credit information, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled.

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

SECTION 1. SHORT TITLE; TABLE OF CONTENTS. (a) SHORT TITLE- This Act may be cited as the `Fair and Accurate Credit Transactions Act of 2003′. (b) TABLE OF CONTENTS- The table of contents for this Act is as follows: Sec. 1. Short title; table of contents. Sec. 2. Definitions. Sec. 3. Effective dates. TITLE I–IDENTITY THEFT PREVENTION AND CREDIT HISTORY RESTORATION Subtitle A–Identity Theft Prevention Sec. 111. Amendment to definitions. Sec. 112. Fraud alerts and active duty alerts. Sec. 113. Truncation of credit card and debit card account numbers. Sec. 114. Establishment of procedures for the identification of possible instances of identity theft. Sec. 115. Authority to truncate social security numbers. Subtitle B–Protection and Restoration of Identity Theft Victim Credit History Sec. 151. Summary of rights of identity theft victims. Sec. 152. Blocking of information resulting from identity theft. Sec. 153. Coordination of identity theft complaint investigations. Sec. 154. Prevention of repollution of consumer reports. Sec. 155. Notice by debt collectors with respect to fraudulent information. Sec. 156. Statute of limitations. Sec. 157. Study on the use of technology to combat identity theft. TITLE II–IMPROVEMENTS IN USE OF AND CONSUMER ACCESS TO CREDIT INFORMATION Sec. 211. Free consumer reports. Sec. 212. Disclosure of credit scores. Sec. 213. Enhanced disclosure of the means available to opt out of prescreened lists. Sec. 214. Affiliate sharing. Sec. 215. Study of effects of credit scores and credit-based insurance scores on availability and affordability of financial products. Sec. 216. Disposal of consumer report information and records. Sec. 217. Requirement to disclose communications to a consumer reporting agency. TITLE III–ENHANCING THE ACCURACY OF CONSUMER REPORT INFORMATION Sec. 311. Risk-based pricing notice. Sec. 312. Procedures to enhance the accuracy and integrity of information furnished to consumer reporting agencies. Sec. 313. FTC and consumer reporting agency action concerning complaints. Sec. 314. Improved disclosure of the results of reinvestigation. Sec. 315. Reconciling addresses. Sec. 316. Notice of dispute through reseller. Sec. 317. Reasonable reinvestigation required. Sec. 318. FTC study of issues relating to the Fair Credit Reporting Act. Sec. 319. FTC study of the accuracy of consumer reports. TITLE IV–LIMITING THE USE AND SHARING OF MEDICAL INFORMATION IN THE FINANCIAL SYSTEM Sec. 411. Protection of medical information in the financial system. Sec. 412. Confidentiality of medical contact information in consumer reports. TITLE V–FINANCIAL LITERACY AND EDUCATION IMPROVEMENT Sec. 511. Short title. Sec. 512. Definitions. Sec. 513. Establishment of Financial Literacy and Education Commission. Sec. 514. Duties of the Commission. Sec. 515. Powers of the Commission. Sec. 516. Commission personnel matters. Sec. 517. Studies by the Comptroller General. Sec. 518. The national public service multimedia campaign to enhance the state of financial literacy. Sec. 519. Authorization of appropriations. TITLE VI–PROTECTING EMPLOYEE MISCONDUCT INVESTIGATIONS Sec. 611. Certain employee investigation communications excluded from definition of consumer report. TITLE VII–RELATION TO STATE LAWS Sec. 711. Relation to State laws. TITLE VIII–MISCELLANEOUS Sec. 811. Clerical amendments. SEC. 2. DEFINITIONS. As used in this Act– (1) the term `Board’ means the Board of Governors of the Federal Reserve System; (2) the term `Commission’, other than as used in title V, means the Federal Trade Commission; (3) the terms `consumer’, `consumer report’, `consumer reporting agency’, `creditor’, `Federal banking agencies’, and `financial institution’ have the same meanings as in section 603 of the Fair Credit Reporting Act, as amended by this Act; and (4) the term `affiliates’ means persons that are related by common ownership or affiliated by corporate control. SEC. 3. EFFECTIVE DATES. Except as otherwise specifically provided in this Act and the amendments made by this Act– (1) before the end of the 2-month period beginning on the date of enactment of this Act, the Board and the Commission shall jointly prescribe regulations in final form establishing effective dates for each provision of this Act; and (2) the regulations prescribed under paragraph (1) shall establish effective dates that are as early as possible, while allowing a reasonable time for the implementation of the provisions of this Act, but in no case shall any such effective date be later than 10 months after the date of issuance of such regulations in final form.

TITLE I–IDENTITY THEFT PREVENTION AND CREDIT HISTORY RESTORATION

Subtitle A–Identity Theft Prevention Sec. 111. Amendment to definitions. Sec. 112. Fraud alerts and active duty alerts. Sec. 113. Truncation of credit card and debit card account numbers. Sec. 114. Establishment of procedures for the identification of possible instances of identity theft. Sec. 115. Authority to truncate social security numbers. Subtitle B–Protection and Restoration of Identity Theft Victim Credit History Sec. 151. Summary of rights of identity theft victims. Sec. 152. Blocking of information resulting from identity theft. Sec. 153. Coordination of identity theft complaint investigations. Sec. 154. Prevention of repollution of consumer reports. Sec. 155. Notice by debt collectors with respect to fraudulent information. Sec. 156. Statute of limitations. Sec. 157. Study on the use of technology to combat identity theft.

SEC. 111. AMENDMENT TO DEFINITIONS.

Section 603 of the Fair Credit Reporting Act (15 U.S.C. 1681a) is amended by adding at the end the following: (q) DEFINITIONS RELATING TO FRAUD ALERTS- (1) ACTIVE DUTY MILITARY CONSUMER- The term `active duty military consumer’ means a consumer in military service who– (A) is on active duty (as defined in section 101(d)(1) of title 10, United States Code) or is a reservist performing duty under a call or order to active duty under a provision of law referred to in section 101(a)(13) of title 10, United States Code; and (B) is assigned to service away from the usual duty station of the consumer. (2) FRAUD ALERT; ACTIVE DUTY ALERT- The terms `fraud alert’ and `active duty alert’ mean a statement in the file of a consumer that– (A) notifies all prospective users of a consumer report relating to the consumer that the consumer may be a victim of fraud, including identity theft, or is an active duty military consumer, as applicable; and (B) is presented in a manner that facilitates a clear and conspicuous view of the statement described in subparagraph (A) by any person requesting such consumer report. (3) IDENTITY THEFT- The term `identity theft’ means a fraud committed using the identifying information of another person, subject to such further definition as the Commission may prescribe, by regulation. (4) IDENTITY THEFT REPORT- The term `identity theft report’ has the meaning given that term by rule of the Commission, and means, at a minimum, a report– (A) that alleges an identity theft; (B) that is a copy of an official, valid report filed by a consumer with an appropriate Federal, State, or local law enforcement agency, including the United States Postal Inspection Service, or such other government agency deemed appropriate by the Commission; and (C) the filing of which subjects the person filing the report to criminal penalties relating to the filing of false information if, in fact, the information in the report is false. (5) NEW CREDIT PLAN- The term `new credit plan’ means a new account under an open end credit plan (as defined in section 103(i) of the Truth in Lending Act) or a new credit transaction not under an open end credit plan. (r) Credit and Debit Related Terms– (1) CARD ISSUER- The term `card issuer’ means– (A) a credit card issuer, in the case of a credit card; and (B) a debit card issuer, in the case of a debit card. (2) CREDIT CARD- The term `credit card’ has the same meaning as in section 103 of the Truth in Lending Act. (3) DEBIT CARD- The term `debit card’ means any card issued by a financial institution to a consumer for use in initiating an electronic fund transfer from the account of the consumer at such financial institution, for the purpose of transferring money between accounts or obtaining money, property, labor, or services. (4) ACCOUNT AND ELECTRONIC FUND TRANSFER- The terms `account’ and `electronic fund transfer’ have the same meanings as in section 903 of the Electronic Fund Transfer Act. (5) CREDIT AND CREDITOR- The terms `credit’ and `creditor’ have the same meanings as in section 702 of the Equal Credit Opportunity Act. (s) FEDERAL BANKING AGENCY- The term `Federal banking agency’ has the same meaning as in section 3 of the Federal Deposit Insurance Act. (t) FINANCIAL INSTITUTION- The term `financial institution’ means a State or National bank, a State or Federal savings and loan association, a mutual savings bank, a State or Federal credit union, or any other person that, directly or indirectly, holds a transaction account (as defined in section 19(b) of the Federal Reserve Act) belonging to a consumer. (u) RESELLER- The term `reseller’ means a consumer reporting agency that– (1) assembles and merges information contained in the database of another consumer reporting agency or multiple consumer reporting agencies concerning any consumer for purposes of furnishing such information to any third party, to the extent of such activities; and (2) does not maintain a database of the assembled or merged information from which new consumer reports are produced. (v) COMMISSION- The term `Commission’ means the Federal Trade Commission. (w) NATIONWIDE SPECIALTY CONSUMER REPORTING AGENCY- The term `nationwide specialty consumer reporting agency’ means a consumer reporting agency that compiles and maintains files on consumers on a nationwide basis relating to– (1) medical records or payments; (2) residential or tenant history; (3) check writing history; (4) employment history; or (5) insurance claims.’.

SEC. 112. FRAUD ALERTS AND ACTIVE DUTY ALERTS.

(a) FRAUD ALERTS- The Fair Credit Reporting Act (15 U.S.C. 1681 et seq.) is amended by inserting after section 605 the following: Sec. 605A. Identity theft prevention; fraud alerts and active duty alerts (a) ONE-CALL FRAUD ALERTS- (1) INITIAL ALERTS- Upon the direct request of a consumer, or an individual acting on behalf of or as a personal representative of a consumer, who asserts in good faith a suspicion that the consumer has been or is about to become a victim of fraud or related crime, including identity theft, a consumer reporting agency described in section 603(p) that maintains a file on the consumer and has received appropriate proof of the identity of the requester shall– (A) include a fraud alert in the file of that consumer, and also provide that alert along with any credit score generated in using that file, for a period of not less than 90 days, beginning on the date of such request, unless the consumer or such representative requests that such fraud alert be removed before the end of such period, and the agency has received appropriate proof of the identity of the requester for such purpose; and (B) refer the information regarding the fraud alert under this paragraph to each of the other consumer reporting agencies described in section 603(p), in accordance with procedures developed under section 621(f). (2) ACCESS TO FREE REPORTS- In any case in which a consumer reporting agency includes a fraud alert in the file of a consumer pursuant to this subsection, the consumer reporting agency shall– (A) disclose to the consumer that the consumer may request a free copy of the file of the consumer pursuant to section 612(d); and (B) provide to the consumer all disclosures required to be made under section 609, without charge to the consumer, not later than 3 business days after any request described in subparagraph (A). (b) EXTENDED ALERTS- (1) IN GENERAL- Upon the direct request of a consumer, or an individual acting on behalf of or as a personal representative of a consumer, who submits an identity theft report to a consumer reporting agency described in section 603(p) that maintains a file on the consumer, if the agency has received appropriate proof of the identity of the requester, the agency shall– (A) include a fraud alert in the file of that consumer, and also provide that alert along with any credit score generated in using that file, during the 7-year period beginning on the date of such request, unless the consumer or such representative requests that such fraud alert be removed before the end of such period and the agency has received appropriate proof of the identity of the requester for such purpose; (B) during the 5-year period beginning on the date of such request, exclude the consumer from any list of consumers prepared by the consumer reporting agency and provided to any third party to offer credit or insurance to the consumer as part of a transaction that was not initiated by the consumer, unless the consumer or such representative requests that such exclusion be rescinded before the end of such period; and (C) refer the information regarding the extended fraud alert under this paragraph to each of the other consumer reporting agencies described in section 603(p), in accordance with procedures developed under section 621(f). (2) ACCESS TO FREE REPORTS- In any case in which a consumer reporting agency includes a fraud alert in the file of a consumer pursuant to this subsection, the consumer reporting agency shall– (A) disclose to the consumer that the consumer may request 2 free copies of the file of the consumer pursuant to section 612(d) during the 12-month period beginning on the date on which the fraud alert was included in the file; and (B) provide to the consumer all disclosures required to be made under section 609, without charge to the consumer, not later than 3 business days after any request described in subparagraph (A). (c) ACTIVE DUTY ALERTS- Upon the direct request of an active duty military consumer, or an individual acting on behalf of or as a personal representative of an active duty military consumer, a consumer reporting agency described in section 603(p) that maintains a file on the active duty military consumer and has received appropriate proof of the identity of the requester shall– (1) include an active duty alert in the file of that active duty military consumer, and also provide that alert along with any credit score generated in using that file, during a period of not less than 12 months, or such longer period as the Commission shall determine, by regulation, beginning on the date of the request, unless the active duty military consumer or such representative requests that such fraud alert be removed before the end of such period, and the agency has received appropriate proof of the identity of the requester for such purpose; (2) during the 2-year period beginning on the date of such request, exclude the active duty military consumer from any list of consumers prepared by the consumer reporting agency and provided to any third party to offer credit or insurance to the consumer as part of a transaction that was not initiated by the consumer, unless the consumer requests that such exclusion be rescinded before the end of such period; and (3) refer the information regarding the active duty alert to each of the other consumer reporting agencies described in section 603(p), in accordance with procedures developed under section 621(f). (d) PROCEDURES- Each consumer reporting agency described in section 603(p) shall establish policies and procedures to comply with this section, including procedures that inform consumers of the availability of initial, extended, and active duty alerts and procedures that allow consumers and active duty military consumers to request initial, extended, or active duty alerts (as applicable) in a simple and easy manner, including by telephone. (e) REFERRALS OF ALERTS- Each consumer reporting agency described in section 603(p) that receives a referral of a fraud alert or active duty alert from another consumer reporting agency pursuant to this section shall, as though the agency received the request from the consumer directly, follow the procedures required under– (1) paragraphs (1)(A) and (2) of subsection (a), in the case of a referral under subsection (a)(1)(B); (2) paragraphs (1)(A), (1)(B), and (2) of subsection (b), in the case of a referral under subsection (b)(1)(C); and (3) paragraphs (1) and (2) of subsection (c), in the case of a referral under subsection (c)(3). (f) DUTY OF RESELLER TO RECONVEY ALERT- A reseller shall include in its report any fraud alert or active duty alert placed in the file of a consumer pursuant to this section by another consumer reporting agency. (g) DUTY OF OTHER CONSUMER REPORTING AGENCIES TO PROVIDE CONTACT INFORMATION- If a consumer contacts any consumer reporting agency that is not described in section 603(p) to communicate a suspicion that the consumer has been or is about to become a victim of fraud or related crime, including identity theft, the agency shall provide information to the consumer on how to contact the Commission and the consumer reporting agencies described in section 603(p) to obtain more detailed information and request alerts under this section. (h) LIMITATIONS ON USE OF INFORMATION FOR CREDIT EXTENSIONS- (1) REQUIREMENTS FOR INITIAL AND ACTIVE DUTY ALERTS- (A) NOTIFICATION- Each initial fraud alert and active duty alert under this section shall include information that notifies all prospective users of a consumer report on the consumer to which the alert relates that the consumer does not authorize the establishment of any new credit plan or extension of credit, other than under an open-end credit plan (as defined in section 103(i)), in the name of the consumer, or issuance of an additional card on an existing credit account requested by a consumer, or any increase in credit limit on an existing credit account requested by a consumer, except in accordance with subparagraph (B). (B) LIMITATION ON USERS- (i) IN GENERAL- No prospective user of a consumer report that includes an initial fraud alert or an active duty alert in accordance with this section may establish a new credit plan or extension of credit, other than under an open-end credit plan (as defined in section 103(i)), in the name of the consumer, or issue an additional card on an existing credit account requested by a consumer, or grant any increase in credit limit on an existing credit account requested by a consumer, unless the user utilizes reasonable policies and procedures to form a reasonable belief that the user knows the identity of the person making the request. (ii) VERIFICATION- If a consumer requesting the alert has specified a telephone number to be used for identity verification purposes, before authorizing any new credit plan or extension described in clause (i) in the name of such consumer, a user of such consumer report shall contact the consumer using that telephone number or take reasonable steps to verify the consumer’s identity and confirm that the application for a new credit plan is not the result of identity theft. (2) REQUIREMENTS FOR EXTENDED ALERTS- (A) NOTIFICATION- Each extended alert under this section shall include information that provides all prospective users of a consumer report relating to a consumer with– (i) notification that the consumer does not authorize the establishment of any new credit plan or extension of credit described in clause (i), other than under an open-end credit plan (as defined in section 103(i)), in the name of the consumer, or issuance of an additional card on an existing credit account requested by a consumer, or any increase in credit limit on an existing credit account requested by a consumer, except in accordance with subparagraph (B); and (ii) a telephone number or other reasonable contact method designated by the consumer. (B) LIMITATION ON USERS- No prospective user of a consumer report or of a credit score generated using the information in the file of a consumer that includes an extended fraud alert in accordance with this section may establish a new credit plan or extension of credit, other than under an open-end credit plan (as defined in section 103(i)), in the name of the consumer, or issue an additional card on an existing credit account requested by a consumer, or any increase in credit limit on an existing credit account requested by a consumer, unless the user contacts the consumer in person or using the contact method described in subparagraph (A)(ii) to confirm that the application for a new credit plan or increase in credit limit, or request for an additional card is not the result of identity theft.’. (b) RULEMAKING- The Commission shall prescribe regulations to define what constitutes appropriate proof of identity for purposes of sections 605A, 605B, and 609(a)(1) of the Fair Credit Reporting Act, as amended by this Act.

SEC. 113. TRUNCATION OF CREDIT CARD AND DEBIT CARD ACCOUNT NUMBERS.

Section 605 of the Fair Credit Reporting Act (15 U.S.C. 1681c) is amended by adding at the end the following: (g) TRUNCATION OF CREDIT CARD AND DEBIT CARD NUMBERS- (1) IN GENERAL- Except as otherwise provided in this subsection, no person that accepts credit cards or debit cards for the transaction of business shall print more than the last 5 digits of the card number or the expiration date upon any receipt provided to the cardholder at the point of the sale or transaction. (2) LIMITATION- This subsection shall apply only to receipts that are electronically printed, and shall not apply to transactions in which the sole means of recording a credit card or debit card account number is by handwriting or by an imprint or copy of the card. (3) EFFECTIVE DATE- This subsection shall become effective– (A) 3 years after the date of enactment of this subsection, with respect to any cash register or other machine or device that electronically prints receipts for credit card or debit card transactions that is in use before January 1, 2005; and (B) 1 year after the date of enactment of this subsection, with respect to any cash register or other machine or device that electronically prints receipts for credit card or debit card transactions that is first put into use on or after January 1, 2005.’.

SEC. 114. ESTABLISHMENT OF PROCEDURES FOR THE IDENTIFICATION OF POSSIBLE INSTANCES OF IDENTITY THEFT.

Section 615 of the Fair Credit Reporting Act (15 U.S.C. 1681m) is amended– (1) by striking `(e)’ at the end; and (2) by adding at the end the following: (e) RED FLAG GUIDELINES AND REGULATIONS REQUIRED- (1) GUIDELINES- The Federal banking agencies, the National Credit Union Administration, and the Commission shall jointly, with respect to the entities that are subject to their respective enforcement authority under section 621– (A) establish and maintain guidelines for use by each financial institution and each creditor regarding identity theft with respect to account holders at, or customers of, such entities, and update such guidelines as often as necessary; (B) prescribe regulations requiring each financial institution and each creditor to establish reasonable policies and procedures for implementing the guidelines established pursuant to subparagraph (A), to identify possible risks to account holders or customers or to the safety and soundness of the institution or customers; and (C) prescribe regulations applicable to card issuers to ensure that, if a card issuer receives notification of a change of address for an existing account, and within a short period of time (during at least the first 30 days after such notification is received) receives a request for an additional or replacement card for the same account, the card issuer may not issue the additional or replacement card, unless the card issuer, in accordance with reasonable policies and procedures– (i) notifies the cardholder of the request at the former address of the cardholder and provides to the cardholder a means of promptly reporting incorrect address changes; (ii) notifies the cardholder of the request by such other means of communication as the cardholder and the card issuer previously agreed to; or (iii) uses other means of assessing the validity of the change of address, in accordance with reasonable policies and procedures established by the card issuer in accordance with the regulations prescribed under subparagraph (B). (2) CRITERIA- (A) IN GENERAL- In developing the guidelines required by paragraph (1)(A), the agencies described in paragraph (1) shall identify patterns, practices, and specific forms of activity that indicate the possible existence of identity theft. (B) INACTIVE ACCOUNTS- In developing the guidelines required by paragraph (1)(A), the agencies described in paragraph (1) shall consider including reasonable guidelines providing that when a transaction occurs with respect to a credit or deposit account that has been inactive for more than 2 years, the creditor or financial institution shall follow reasonable policies and procedures that provide for notice to be given to a consumer in a manner reasonably designed to reduce the likelihood of identity theft with respect to such account. (3) CONSISTENCY WITH VERIFICATION REQUIREMENTS- Guidelines established pursuant to paragraph (1) shall not be inconsistent with the policies and procedures required under section 5318(l) of title 31, United States Code.’.

SEC. 115. AUTHORITY TO TRUNCATE SOCIAL SECURITY NUMBERS.

Section 609(a)(1) of the Fair Credit Reporting Act (15 U.S.C. 1681g(a)(1)) is amended by striking `except that nothing’ and inserting the following: `except that– (A) if the consumer to whom the file relates requests that the first 5 digits of the social security number (or similar identification number) of the consumer not be included in the disclosure and the consumer reporting agency has received appropriate proof of the identity of the requester, the consumer reporting agency shall so truncate such number in such disclosure; and (B) nothing’. Subtitle B–Protection and Restoration of Identity Theft Victim Credit History

SEC. 151. SUMMARY OF RIGHTS OF IDENTITY THEFT VICTIMS.

Subtitle B–Protection and Restoration of Identity Theft Victim Credit History (a) IN GENERAL- (1) SUMMARY- Section 609 of the Fair Credit Reporting Act (15 U.S.C. 1681g) is amended by adding at the end the following: (d) SUMMARY OF RIGHTS OF IDENTITY THEFT VICTIMS- (1) IN GENERAL- The Commission, in consultation with the Federal banking agencies and the National Credit Union Administration, shall prepare a model summary of the rights of consumers under this title with respect to the procedures for remedying the effects of fraud or identity theft involving credit, an electronic fund transfer, or an account or transaction at or with a financial institution or other creditor. (2) SUMMARY OF RIGHTS AND CONTACT INFORMATION- Beginning 60 days after the date on which the model summary of rights is prescribed in final form by the Commission pursuant to paragraph (1), if any consumer contacts a consumer reporting agency and expresses a belief that the consumer is a victim of fraud or identity theft involving credit, an electronic fund transfer, or an account or transaction at or with a financial institution or other creditor, the consumer reporting agency shall, in addition to any other action that the agency may take, provide the consumer with a summary of rights that contains all of the information required by the Commission under paragraph (1), and information on how to contact the Commission to obtain more detailed information. (e) INFORMATION AVAILABLE TO VICTIMS- (1) IN GENERAL- For the purpose of documenting fraudulent transactions resulting from identity theft, not later than 30 days after the date of receipt of a request from a victim in accordance with paragraph (3), and subject to verification of the identity of the victim and the claim of identity theft in accordance with paragraph (2), a business entity that has provided credit to, provided for consideration products, goods, or services to, accepted payment from, or otherwise entered into a commercial transaction for consideration with, a person who has allegedly made unauthorized use of the means of identification of the victim, shall provide a copy of application and business transaction records in the control of the business entity, whether maintained by the business entity or by another person on behalf of the business entity, evidencing any transaction alleged to be a result of identity theft to– (A) the victim; (B) any Federal, State, or local government law enforcement agency or officer specified by the victim in such a request; or (C) any law enforcement agency investigating the identity theft and authorized by the victim to take receipt of records provided under this subsection. (2) VERIFICATION OF IDENTITY AND CLAIM- Before a business entity provides any information under paragraph (1), unless the business entity, at its discretion, otherwise has a high degree of confidence that it knows the identity of the victim making a request under paragraph (1), the victim shall provide to the business entity– (A) as proof of positive identification of the victim, at the election of the business entity– (i) the presentation of a government-issued identification card; (ii) personally identifying information of the same type as was provided to the business entity by the unauthorized person; or (iii) personally identifying information that the business entity typically requests from new applicants or for new transactions, at the time of the victim’s request for information, including any documentation described in clauses (i) and (ii); and (B) as proof of a claim of identity theft, at the election of the business entity– (i) a copy of a police report evidencing the claim of the victim of identity theft; and (ii) a properly completed– (I) copy of a standardized affidavit of identity theft developed and made available by the Commission; or (II) an affidavit of fact that is acceptable to the business entity for that purpose. (3) PROCEDURES- The request of a victim under paragraph (1) shall– (A) be in writing; (B) be mailed to an address specified by the business entity, if any; and (C) if asked by the business entity, include relevant information about any transaction alleged to be a result of identity theft to facilitate compliance with this section including– (i) if known by the victim (or if readily obtainable by the victim), the date of the application or transaction; and (ii) if known by the victim (or if readily obtainable by the victim), any other identifying information such as an account or transaction number. (4) NO CHARGE TO VICTIM- Information required to be provided under paragraph (1) shall be so provided without charge. (5) AUTHORITY TO DECLINE TO PROVIDE INFORMATION- A business entity may decline to provide information under paragraph (1) if, in the exercise of good faith, the business entity determines that– (A) this subsection does not require disclosure of the information; (B) after reviewing the information provided pursuant to paragraph (2), the business entity does not have a high degree of confidence in knowing the true identity of the individual requesting the information; (C) the request for the information is based on a misrepresentation of fact by the individual requesting the information relevant to the request for information; or (D) the information requested is Internet navigational data or similar information about a person’s visit to a website or online service. (6) LIMITATION ON LIABILITY- Except as provided in section 621, sections 616 and 617 do not apply to any violation of this subsection. (7) LIMITATION ON CIVIL LIABILITY- No business entity may be held civilly liable under any provision of Federal, State, or other law for disclosure, made in good faith pursuant to this subsection. (8) NO NEW RECORDKEEPING OBLIGATION- Nothing in this subsection creates an obligation on the part of a business entity to obtain, retain, or maintain information or records that are not otherwise required to be obtained, retained, or maintained in the ordinary course of its business or under other applicable law. (9) RULE OF CONSTRUCTION- (A) IN GENERAL- No provision of subtitle A of title V of Public Law 106-102, prohibiting the disclosure of financial information by a business entity to third parties shall be used to deny disclosure of information to the victim under this subsection. (B) LIMITATION- Except as provided in subparagraph (A), nothing in this subsection permits a business entity to disclose information, including information to law enforcement under subparagraphs (B) and (C) of paragraph (1), that the business entity is otherwise prohibited from disclosing under any other applicable provision of Federal or State law. (10) AFFIRMATIVE DEFENSE- In any civil action brought to enforce this subsection, it is an affirmative defense (which the defendant must establish by a preponderance of the evidence) for a business entity to file an affidavit or answer stating that– (A) the business entity has made a reasonably diligent search of its available business records; and (B) the records requested under this subsection do not exist or are not reasonably available. (11) DEFINITION OF VICTIM- For purposes of this subsection, the term `victim’ means a consumer whose means of identification or financial information has been used or transferred (or has been alleged to have been used or transferred) without the authority of that consumer, with the intent to commit, or to aid or abet, an identity theft or a similar crime. (12) EFFECTIVE DATE- This subsection shall become effective 180 days after the date of enactment of this subsection. (13) EFFECTIVENESS STUDY- Not later than 18 months after the date of enactment of this subsection, the Comptroller General of the United States shall submit a report to Congress assessing the effectiveness of this provision.’. (2) RELATION TO STATE LAWS- Section 625(b)(1) of the Fair Credit Reporting Act (15 U.S.C. 1681t(b)(1), as so redesignated) is amended by adding at the end the following new subparagraph: (G) section 609(e), relating to information available to victims under section 609(e);’. (b) PUBLIC CAMPAIGN TO PREVENT IDENTITY THEFT- Not later than 2 years after the date of enactment of this Act, the Commission shall establish and implement a media and distribution campaign to teach the public how to prevent identity theft. Such campaign shall include existing Commission education materials, as well as radio, television, and print public service announcements, video cassettes, interactive digital video discs (DVD’s) or compact audio discs (CD’s), and Internet resources.

SEC. 152. BLOCKING OF INFORMATION RESULTING FROM IDENTITY THEFT.

(a) IN GENERAL- The Fair Credit Reporting Act (15 U.S.C. 1681 et seq.) is amended by inserting after section 605A, as added by this Act, the following: Sec. 605B. Block of information resulting from identity theft (a) BLOCK- Except as otherwise provided in this section, a consumer reporting agency shall block the reporting of any information in the file of a consumer that the consumer identifies as information that resulted from an alleged identity theft, not later than 4 business days after the date of receipt by such agency of– (1) appropriate proof of the identity of the consumer; (2) a copy of an identity theft report; (3) the identification of such information by the consumer; and (4) a statement by the consumer that the information is not information relating to any transaction by the consumer. (b) NOTIFICATION- A consumer reporting agency shall promptly notify the furnisher of information identified by the consumer under subsection (a)– (1) that the information may be a result of identity theft; (2) that an identity theft report has been filed; (3) that a block has been requested under this section; and (4) of the effective dates of the block. (c) AUTHORITY TO DECLINE OR RESCIND- (1) IN GENERAL- A consumer reporting agency may decline to block, or may rescind any block, of information relating to a consumer under this section, if the consumer reporting agency reasonably determines that– (A) the information was blocked in error or a block was requested by the consumer in error; (B) the information was blocked, or a block was requested by the consumer, on the basis of a material misrepresentation of fact by the consumer relevant to the request to block; or (C) the consumer obtained possession of goods, services, or money as a result of the blocked transaction or transactions. (2) NOTIFICATION TO CONSUMER- If a block of information is declined or rescinded under this subsection, the affected consumer shall be notified promptly, in the same manner as consumers are notified of the reinsertion of information under section 611(a)(5)(B). (3) SIGNIFICANCE OF BLOCK- For purposes of this subsection, if a consumer reporting agency rescinds a block, the presence of information in the file of a consumer prior to the blocking of such information is not evidence of whether the consumer knew or should have known that the consumer obtained possession of any goods, services, or money as a result of the block. (d) EXCEPTION FOR RESELLERS- (1) NO RESELLER FILE- This section shall not apply to a consumer reporting agency, if the consumer reporting agency– (A) is a reseller; (B) is not, at the time of the request of the consumer under subsection (a), otherwise furnishing or reselling a consumer report concerning the information identified by the consumer; and (C) informs the consumer, by any means, that the consumer may report the identity theft to the Commission to obtain consumer information regarding identity theft. (2) RESELLER WITH FILE- The sole obligation of the consumer reporting agency under this section, with regard to any request of a consumer under this section, shall be to block the consumer report maintained by the consumer reporting agency from any subsequent use, if– (A) the consumer, in accordance with the provisions of subsection (a), identifies, to a consumer reporting agency, information in the file of the consumer that resulted from identity theft; and (B) the consumer reporting agency is a reseller of the identified information. (3) NOTICE- In carrying out its obligation under paragraph (2), the reseller shall promptly provide a notice to the consumer of the decision to block the file. Such notice shall contain the name, address, and telephone number of each consumer reporting agency from which the consumer information was obtained for resale. (e) EXCEPTION FOR VERIFICATION COMPANIES- The provisions of this section do not apply to a check services company, acting as such, which issues authorizations for the purpose of approving or processing negotiable instruments, electronic fund transfers, or similar methods of payments, except that, beginning 4 business days after receipt of information described in paragraphs (1) through (3) of subsection (a), a check services company shall not report to a national consumer reporting agency described in section 603(p), any information identified in the subject identity theft report as resulting from identity theft. (f) ACCESS TO BLOCKED INFORMATION BY LAW ENFORCEMENT AGENCIES- No provision of this section shall be construed as requiring a consumer reporting agency to prevent a Federal, State, or local law enforcement agency from accessing blocked information in a consumer file to which the agency could otherwise obtain access under this title.’. (b) CLERICAL AMENDMENT- The table of sections for the Fair Credit Reporting Act (15 U.S.C. 1681 et seq.) is amended by inserting after the item relating to section 605 the following new items: 605A. Identity theft prevention; fraud alerts and active duty alerts. 605B. Block of information resulting from identity theft.’.

SEC. 153. COORDINATION OF IDENTITY THEFT COMPLAINT INVESTIGATIONS.

Section 621 of the Fair Credit Reporting Act (15 U.S.C. 1681s) is amended by adding at the end the following: (f) COORDINATION OF CONSUMER COMPLAINT INVESTIGATIONS- (1) IN GENERAL- Each consumer reporting agency described in section 603(p) shall develop and maintain procedures for the referral to each other such agency of any consumer complaint received by the agency alleging identity theft, or requesting a fraud alert under section 605A or a block under section 605B. (2) MODEL FORM AND PROCEDURE FOR REPORTING IDENTITY THEFT- The Commission, in consultation with the Federal banking agencies and the National Credit Union Administration, shall develop a model form and model procedures to be used by consumers who are victims of identity theft for contacting and informing creditors and consumer reporting agencies of the fraud. (3) ANNUAL SUMMARY REPORTS- Each consumer reporting agency described in section 603(p) shall submit an annual summary report to the Commission on consumer complaints received by the agency on identity theft or fraud alerts.’.

SEC. 154. PREVENTION OF REPOLLUTION OF CONSUMER REPORTS.

(a) PREVENTION OF REINSERTION OF ERRONEOUS INFORMATION- Section 623(a) of the Fair Credit Reporting Act (15 U.S.C. 1681s-2(a)) is amended by adding at the end the following: (6) DUTIES OF FURNISHERS UPON NOTICE OF IDENTITY THEFT-RELATED INFORMATION- (A) REASONABLE PROCEDURES- A person that furnishes information to any consumer reporting agency shall have in place reasonable procedures to respond to any notification that it receives from a consumer reporting agency under section 605B relating to information resulting from identity theft, to prevent that person from refurnishing such blocked information. (B) INFORMATION ALLEGED TO RESULT FROM IDENTITY THEFT- If a consumer submits an identity theft report to a person who furnishes information to a consumer reporting agency at the address specified by that person for receiving such reports stating that information maintained by such person that purports to relate to the consumer resulted from identity theft, the person may not furnish such information that purports to relate to the consumer to any consumer reporting agency, unless the person subsequently knows or is informed by the consumer that the information is correct.’. (b) PROHIBITION ON SALE OR TRANSFER OF DEBT CAUSED BY IDENTITY THEFT- Section 615 of the Fair Credit Reporting Act (15 U.S.C. 1681m), as amended by this Act, is amended by adding at the end the following: (f) PROHIBITION ON SALE OR TRANSFER OF DEBT CAUSED BY IDENTITY THEFT- (1) IN GENERAL- No person shall sell, transfer for consideration, or place for collection a debt that such person has been notified under section 605B has resulted from identity theft. (2) APPLICABILITY- The prohibitions of this subsection shall apply to all persons collecting a debt described in paragraph (1) after the date of a notification under paragraph (1). (3) RULE OF CONSTRUCTION- Nothing in this subsection shall be construed to prohibit– (A) the repurchase of a debt in any case in which the assignee of the debt requires such repurchase because the debt has resulted from identity theft; (B) the securitization of a debt or the pledging of a portfolio of debt as collateral in connection with a borrowing; or (C) the transfer of debt as a result of a merger, acquisition, purchase and assumption transaction, or transfer of substantially all of the assets of an entity.’.

SEC. 155. NOTICE BY DEBT COLLECTORS WITH RESPECT TO FRAUDULENT INFORMATION.

Section 615 of the Fair Credit Reporting Act (15 U.S.C. 1681m), as amended by this Act, is amended by adding at the end the following: (g) DEBT COLLECTOR COMMUNICATIONS CONCERNING IDENTITY THEFT- If a person acting as a debt collector (as that term is defined in title VIII) on behalf of a third party that is a creditor or other user of a consumer report is notified that any information relating to a debt that the person is attempting to collect may be fraudulent or may be the result of identity theft, that person shall– (1) notify the third party that the information may be fraudulent or may be the result of identity theft; and (2) upon request of the consumer to whom the debt purportedly relates, provide to the consumer all information to which the consumer would otherwise be entitled if the consumer were not a victim of identity theft, but wished to dispute the debt under provisions of law applicable to that person.’.

SEC. 156. STATUTE OF LIMITATIONS.

Section 618 of the Fair Credit Reporting Act (15 U.S.C. 1681p) is amended to read as follows: Sec. 618. Jurisdiction of courts; limitation of actions An action to enforce any liability created under this title may be brought in any appropriate United States district court, without regard to the amount in controversy, or in any other court of competent jurisdiction, not later than the earlier of– (1) 2 years after the date of discovery by the plaintiff of the violation that is the basis for such liability; or (2) 5 years after the date on which the violation that is the basis for such liability occurs.’.

SEC. 157. STUDY ON THE USE OF TECHNOLOGY TO COMBAT IDENTITY THEFT.

(a) STUDY REQUIRED- The Secretary of the Treasury shall conduct a study of the use of biometrics and other similar technologies to reduce the incidence and costs to society of identity theft by providing convincing evidence of who actually performed a given financial transaction. (b) CONSULTATION- The Secretary of the Treasury shall consult with Federal banking agencies, the Commission, and representatives of financial institutions, consumer reporting agencies, Federal, State, and local government agencies that issue official forms or means of identification, State prosecutors, law enforcement agencies, the biometric industry, and the general public in formulating and conducting the study required by subsection (a). (c) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated to the Secretary of the Treasury for fiscal year 2004, such sums as may be necessary to carry out the provisions of this section. (d) REPORT REQUIRED- Before the end of the 180-day period beginning on the date of enactment of this Act, the Secretary shall submit a report to Congress containing the findings and conclusions of the study required under subsection (a), together with such recommendations for legislative or administrative actions as may be appropriate.

TITLE II–IMPROVEMENTS IN USE OF AND CONSUMER ACCESS TO CREDIT INFORMATION

Sec. 211. Free consumer reports. Sec. 212. Disclosure of credit scores. Sec. 213. Enhanced disclosure of the means available to opt out of prescreened lists. Sec. 214. Affiliate sharing. Sec. 215. Study of effects of credit scores and credit-based insurance scores on availability and affordability of financial products. Sec. 216. Disposal of consumer report information and records. Sec. 217. Requirement to disclose communications to a consumer reporting agency.

SEC. 211. FREE CONSUMER REPORTS.

(a) IN GENERAL- Section 612 of the Fair Credit Reporting Act (15 U.S.C. 1681j) is amended– (1) by redesignating subsection (a) as subsection (f), and transferring it to the end of the section; (2) by inserting before subsection (b) the following: (a) FREE ANNUAL DISCLOSURE- (1) NATIONWIDE CONSUMER REPORTING AGENCIES- (A) IN GENERAL- All consumer reporting agencies described in subsections (p) and (w) of section 603 shall make all disclosures pursuant to section 609 once during any 12-month period upon request of the consumer and without charge to the consumer. (B) CENTRALIZED SOURCE- Subparagraph (A) shall apply with respect to a consumer reporting agency described in section 603(p) only if the request from the consumer is made using the centralized source established for such purpose in accordance with section 211(c) of the Fair and Accurate Credit Transactions Act of 2003. (C) NATIONWIDE SPECIALTY CONSUMER REPORTING AGENCY- (i) IN GENERAL- The Commission shall prescribe regulations applicable to each consumer reporting agency described in section 603(w) to require the establishment of a streamlined process for consumers to request consumer reports under subparagraph (A), which shall include, at a minimum, the establishment by each such agency of a toll-free telephone number for such requests. (ii) CONSIDERATIONS- In prescribing regulations under clause (i), the Commission shall consider– (I) the significant demands that may be placed on consumer reporting agencies in providing such consumer reports; (II) appropriate means to ensure that consumer reporting agencies can satisfactorily meet those demands, including the efficacy of a system of staggering the availability to consumers of such consumer reports; and (III) the ease by which consumers should be able to contact consumer reporting agencies with respect to access to such consumer reports. (iii) DATE OF ISSUANCE- The Commission shall issue the regulations required by this subparagraph in final form not later than 6 months after the date of enactment of the Fair and Accurate Credit Transactions Act of 2003. (iv) CONSIDERATION OF ABILITY TO COMPLY- The regulations of the Commission under this subparagraph shall establish an effective date by which each nationwide specialty consumer reporting agency (as defined in section 603(w)) shall be required to comply with subsection (a), which effective date– (I) shall be established after consideration of the ability of each nationwide specialty consumer reporting agency to comply with subsection (a); and (II) shall be not later than 6 months after the date on which such regulations are issued in final form (or such additional period not to exceed 3 months, as the Commission determines appropriate). (2) TIMING- A consumer reporting agency shall provide a consumer report under paragraph (1) not later than 15 days after the date on which the request is received under paragraph (1). (3) REINVESTIGATIONS- Notwithstanding the time periods specified in section 611(a)(1), a reinvestigation under that section by a consumer reporting agency upon a request of a consumer that is made after receiving a consumer report under this subsection shall be completed not later than 45 days after the date on which the request is received. (4) EXCEPTION FOR FIRST 12 MONTHS OF OPERATION- This subsection shall not apply to a consumer reporting agency that has not been furnishing consumer reports to third parties on a continuing basis during the 12-month period preceding a request under paragraph (1), with respect to consumers residing nationwide.’; (3) by redesignating subsection (d) as subsection (e); (4) by inserting before subsection (e), as redesignated, the following: (d) FREE DISCLOSURES IN CONNECTION WITH FRAUD ALERTS- Upon the request of a consumer, a consumer reporting agency described in section 603(p) shall make all disclosures pursuant to section 609 without charge to the consumer, as provided in subsections (a)(2) and (b)(2) of section 605A, as applicable.’; (5) in subsection (e), as redesignated, by striking `subsection (a)’ and inserting `subsection (f)’; and (6) in subsection (f), as redesignated, by striking `Except as provided in subsections (b), (c), and (d), a’ and inserting `In the case of a request from a consumer other than a request that is covered by any of subsections (a) through (d), a’. (b) CIRCUMVENTION PROHIBITED- The Fair Credit Reporting Act (15 U.S.C. 1681 et seq.) is amended by adding after section 628, as added by section 216 of this Act, the following new section: Sec. 629. Corporate and technological circumvention prohibited The Commission shall prescribe regulations, to become effective not later than 90 days after the date of enactment of this section, to prevent a consumer reporting agency from circumventing or evading treatment as a consumer reporting agency described in section 603(p) for purposes of this title, including– (1) by means of a corporate reorganization or restructuring, including a merger, acquisition, dissolution, divestiture, or asset sale of a consumer reporting agency; or (2) by maintaining or merging public record and credit account information in a manner that is substantially equivalent to that described in paragraphs (1) and (2) of section 603(p), in the manner described in section 603(p).’. (c) SUMMARY OF RIGHTS TO OBTAIN AND DISPUTE INFORMATION IN CONSUMER REPORTS AND TO OBTAIN CREDIT SCORES- Section 609(c) of the Fair Credit Reporting Act (15 U.S.C. 1681g) is amended to read as follows: (c) SUMMARY OF RIGHTS TO OBTAIN AND DISPUTE INFORMATION IN CONSUMER REPORTS AND TO OBTAIN CREDIT SCORES- (1) COMMISSION SUMMARY OF RIGHTS REQUIRED- (A) IN GENERAL- The Commission shall prepare a model summary of the rights of consumers under this title. (B) CONTENT OF SUMMARY- The summary of rights prepared under subparagraph (A) shall include a description of– (i) the right of a consumer to obtain a copy of a consumer report under subsection (a) from each consumer reporting agency; (ii) the frequency and circumstances under which a consumer is entitled to receive a consumer report without charge under section 612; (iii) the right of a consumer to dispute information in the file of the consumer under section 611; (iv) the right of a consumer to obtain a credit score from a consumer reporting agency, and a description of how to obtain a credit score; (v) the method by which a consumer can contact, and obtain a consumer report from, a consumer reporting agency without charge, as provided in the regulations of the Commission prescribed under section 211(c) of the Fair and Accurate Credit Transactions Act of 2003; and (vi) the method by which a consumer can contact, and obtain a consumer report from, a consumer reporting agency described in section 603(w), as provided in the regulations of the Co

TITLE III–ENHANCING THE ACCURACY OF CONSUMER REPORT INFORMATION

Sec. 311. Risk-based pricing notice. Sec. 312. Procedures to enhance the accuracy and integrity of information furnished to consumer reporting agencies. Sec. 313. FTC and consumer reporting agency action concerning complaints. Sec. 314. Improved disclosure of the results of reinvestigation. Sec. 315. Reconciling addresses. Sec. 316. Notice of dispute through reseller. Sec. 317. Reasonable reinvestigation required. Sec. 318. FTC study of issues relating to the Fair Credit Reporting Act. Sec. 319. FTC study of the accuracy of consumer reports.

TITLE IV–LIMITING THE USE AND SHARING OF MEDICAL INFORMATION IN THE FINANCIAL SYSTEM

Sec. 411. Protection of medical information in the financial system. Sec. 412. Confidentiality of medical contact information in consumer reports.

TITLE V–FINANCIAL LITERACY AND EDUCATION IMPROVEMENT

Sec. 511. Short title. Sec. 512. Definitions. Sec. 513. Establishment of Financial Literacy and Education Commission. Sec. 514. Duties of the Commission. Sec. 515. Powers of the Commission. Sec. 516. Commission personnel matters. Sec. 517. Studies by the Comptroller General. Sec. 518. The national public service multimedia campaign to enhance the state of financial literacy. Sec. 519. Authorization of appropriations.

TITLE VI–PROTECTING EMPLOYEE MISCONDUCT INVESTIGATIONS

Sec. 611. Certain employee investigation communications excluded from definition of consumer report.

TITLE VII–RELATION TO STATE LAWS

Sec. 711. Relation to State laws.

TITLE VIII–MISCELLANEOUS

Sec. 811. Clerical amendments. SEC. 2. DEFINITIONS. As used in this Act– (1) the term `Board’ means the Board of Governors of the Federal Reserve System; (2) the term `Commission’, other than as used in title V, means the Federal Trade Commission; (3) the terms `consumer’, `consumer report’, `consumer reporting agency’, `creditor’, `Federal banking agencies’, and `financial institution’ have the same meanings as in section 603 of the Fair Credit Reporting Act, as amended by this Act; and (4) the term `affiliates’ means persons that are related by common ownership or affiliated by corporate control. SEC. 3. EFFECTIVE DATES. Except as otherwise specifically provided in this Act and the amendments made by this Act– (1) before the end of the 2-month period beginning on the date of enactment of this Act, the Board and the Commission shall jointly prescribe regulations in final form establishing effective dates for each provision of this Act; and (2) the regulations prescribed under paragraph (1) shall establish effective dates that are as early as possible, while allowing a reasonable time for the implementation of the provisions of this Act, but in no case shall any such effective date be later than 10 months after the date of issuance of such regulations in final form.

How Credit Reports Works

How Credit Reports Works

Build My Scores utilizes a multiple phase audit process to have the inaccurate items removed from your credit reports. There are Federal and State laws in place to protect the consumer from inaccurate and unverifiable credit reporting. We assist you in enforcing these laws by implementing our strategy.

Credit Repair Services

1. Thorough research and investigation of credit and collection agencies information, inquires, public records, and source of information.


2. Carefully audit the Credit bureaus; Equifax, Experian, and TransUnion


3. Reinvestigate the credit bureaus and ask for method of their investigation.


4. Validation of Debt Audits, demanding creditors/collection companies produce original documentation.


5. Revised Validation of Debt to the collection agencies as needed.


6. Offer of Performance Audits to the collection agencies.


7. Omission by Silence packets back to Bureaus supplying all audits to the collection agencies/ creditors and failure to comply.


8. Estoppel letters and FTC complaints to those who do not comply with audits.


9. We utilize Delivery Confirmation mail when auditing the creditors and collection agencies to create a paper trail of documented proof.

We don’t just write letters or dispute online with the credit bureaus. We do validations of debt and audit the creditors directly. We professionally audit the creditors and collection agencies using over 400 different custom letters. We continue to create new custom letters. We don’t use form letters like most credit repair companies. We tailor it to your needs. Our intense audit demands validation and verification of derogatory information using the:

1. Fair Debt Collection Practices Act


2. Fair Credit Reporting Act


3. Fair and Accurate Credit Transaction Act


4. Health Insurance Portability and Accountability Act

These four Federal laws have been established to protect consumers’ credit reports. Creditors and credit bureaus are legally obligated to produce documented evidence within a reasonable amount of time, generally 30 days, to prove the information they are reporting. If they cannot validate their claims, they must promptly remove any undocumented information from the consumer’s credit report.

Source

Contact Us Today To Fix Your Credit Score!

Self Credit Repair

Self Credit Repair

Do you check your credit reports regularly? Credit reports are your credit references, as reported by your lenders. And, unfortunately, some lenders may accidentally report inaccurate information about your payment history. This is why it’s important for everyone to monitor their credit reports regularly and to dispute any information that is inaccurate. Today we wanted to show you a complete guide to do-it-yourself credit repair.

If you ever need to fix your credit report, here are the steps to take (and online apps you need) to get your credit report updated quickly – without paying hundreds or thousands of dollars to “credit repair” clinics.

Step 1: Request your free credit report from each credit bureau

The Fair and Accurate Credit Transactions Act (FACTA) entitles you to one free credit report each year from Experian, Equifax, and TransUnion and you can get this through AnnualCreditReport.com or by calling 1-877-322-8228.

In addition, you may request a free report directly from the credit reporting companies in certain circumstances. “Under the Fair Credit Reporting Act, consumers who receive public assistance, are unemployed (and seeking employment), or believe their credit report contains fraudulent data, are also entitled to a free report,” says Maxine Sweet, Vice President of Public Education at Experian.

CREDIT TIP: You can keep a close eye on the credit activity that is being reported for you simply by requesting a free credit report every four months. For example, get your Experian Report in January, Equifax in May, and TransUnion in September.

Step 2: Audit your credit reports carefully

“Remember that credit report information comes from the companies who have accounts with you. The goal is not just to fix your credit report, but to make sure that your information is correct with the source so that it will be reported correctly to everyone who checks your credit references. Reviewing your credit report can help you discover and resolve those inaccuracies,” says Sweet.

Each credit report differs in how information is presented, but here’s a breakdown of what you’ll typically find:

• Personal  Identification (addresses, employment history, name, social security number)


• Types of Accounts (revolving, installment, loans, joint accounts, credit limits, debts)


• Collections (if any accounts went to collections)


• Public Records (about  financial obligations)


• Consumer Statement (such as a statement of dispute if you do not agree with your lender about the status of your account)


• Hard Credit Inquiries (showing you applied for new credit or services)


• Soft Credit Inquiries (showing requests made by lenders who sent you an offer or that you requested your own report — soft inquiries are shown only to you)

Here’s a sample credit report [pdf] from Experian explaining the different parts of your report:

As you audit your credit report, pay close attention to these areas:

Missed Payments
Your payment history makes up the biggest part of your credit scores, so any past-due amounts or late payments will damage your scores (especially missed mortgage payments). If you have any missed payments on your report that are incorrect, make sure to dispute the inaccuracy because it can make a big impact on your scores. You may need to talk to your lender to find out why your records do not agree about the payment.

Length of Time Using Credit (Depth of Credit)
Many people don’t realize that older credit accounts with good credit history actually help you. It shows you have managed credit well for a significant amount of time. Consider the pros of cons before you close any accounts (if they are tempting you to overspend).

The Variety of Accounts
Having a mix of different credit accounts can help you because it shows you know how to manage different types of credit. Managing a car loan with a fixed monthly payment is very different from managing a credit card where you control the amount you owe and pay each month.

Recent Credit Accounts
If you’ve recently taken out a loan or credit card, you’ll want to make sure it’s appearing on your credit report. New credit accounts can signal risk (and could lower your scores at first), but the added credit mix and consistent payment history will likely improve your scores over time.

Amount of Credit
It’s important to make sure you’re using less than 30% of your available credit on revolving credit accounts. For example, if you have a $10,000 credit limit on a credit card – you never want to carry a balance over $3,000 because it can hurt your credit scores. The lower, the better. 

So while auditing your credit report, make sure the credit limit assigned on your revolving accounts are accurate – and the amount owed is under 30% of your credit limit. If not, consider requesting a higher credit limit on that credit card to lower your utilization rate. Even better, pay down your balances so that you are only charging what you can pay in full each month.

CREDIT TIP: If you notice any fraud, you can set a fraud alert right away which cautions lenders to verify your identity before opening any new credit accounts. It’s simple to set-up fraud alerts by using  these  direct links to Experian, Equifax, and TransUnion. “You can also freeze your credit reports for a small fee to prevent new creditors from accessing your report. However, freezing your credit reports means you will have to temporarily unfreeze them when you need services, which can be inconvenient,” says Sweet.

Step 3: Dispute incorrect data

There is no cost to dispute any items on your credit report. And you can dispute incorrect information in a variety of ways. Always start with a current copy of your credit report. Then, you can call the phone number on your credit report or use one of the following online apps from one of the following credit bureaus:

Screenshot of the Experian Credit Dispute App

Screenshot of the Equifax Credit Dispute App

Screenshot of the TransUnion Credit Dispute App

“In most cases, you only need to ask one credit bureau to dispute an account on your behalf .. If your lender responds to a disputed item with a correction, they are required to report that corrected information to any credit reporting company to which they provide their data,” according to Sweet.

Some people think that disputing information on your credit report can hurt your credit scores, but that is not true. Disputes are not reported in your history and are not scored.  Disputing inaccurate information is exactly what you should do to help ensure your credit history is correct.  Another myth is that disputing information you believe is inaccurate will cause info to remain longer on your credit. Information is deleted based on the dates of missed payments or when the account was closed, for example.

CREDIT TIP: If you cannot resolve a disputed item with your lender, you may add a “Statement of Dispute” to your credit report explaining  why the information is incorrect. The statement you write must be under 100 words, and should address why the info the lender is reporting is incorrect. For example, “Never missed any payments with [Lender Name].”  This statement will remain on your report for two years and visible to anyone who has permission to review your report.

Step 4: Wait 30 days for removal or response from creditor

When you dispute an item on your report, the credit bureau will contact the creditor to respond to the dispute. If no response is received within 30-45 days, the credit bureau will remove the account or correct the negative information and notify you of the results.  “If you disagree with the results, you may need to contact the creditor directly and provide additional documentation if your records do not agree with theirs,” says Sweet.

CREDIT TIP: If you need additional help with debt or your credit, avoid going to a “credit repair clinic,” which could cost you hundreds (if not thousands) of dollars. Instead, seek out an accredited non-profit credit counseling agency. And, if you know of a great non-profit credit counseling agency, please share in the comments.

Step 5: Request a new credit report from each credit agency

After an item is corrected with one credit reporting company, wait three or four weeks before requesting a fresh credit report from the other credit bureaus. You want to give the creditor some time to report the corrected data. Getting a fresh report will ensure that the item has been removed or updated. You may also choose to purchase a  credit score to see if your risk level has improved.