How to Protect Your Credit Reputation and Keep Your Good Credit Scores

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Who can forget the discolored and damaged looking teeth of Austin Powers (played by Mike Myers) in the series of comedic movies: “International Man of Mystery,” “The Spy Who Shagged Me,” and “Goldmember”?  It was part of the self-deprecating humor that oral hygiene has come a long way, which has vastly improved our smiles.

Because we like having a bright smile and being free of mouth pain, many people routinely brush their teeth, floss, and visit their dentist twice a year for a cleaning and a check up, in case the brushing and flossing did not catch all things that can harm our teeth and gums.

As much as Americans like being free of mouth pain and having white teeth and healthy gums, many of us also enjoy having high credit scores and being able to apply for and obtain credit as needed. What if our great credit scores nose-dived overnight and our credit applications were all denied?  Each day, this humiliation happens to hardworking American citizens.

This posting will review several ways to detect and prevent this from happening. However, as regular brushing and flossing does not mean you can go a few years without visiting the dentist for a cleaning and checkup, some people should promptly arrange a visit with a consumer lawyer with experience handling violations of the Fair Credit Reporting Act, if credit reporting disputes have been ignored.

NACA member Justin Baxter’s client, Julie Miller, had stellar credit and great credit scores.  This changed almost overnight, when her credit application was denied, though all her bills were paid on time. This was not identity theft. This was not false reporting by any financial institution. It was Julie Miller’s credit report being mixed with the credit history of another Julie Miller. A jury awarded Ms. Miller a total of $18.6 Million for actual and punitive damages in July, 2013.

There are several steps a consumer could take to root out errors and possible violations by a credit reporting agency (CRA) of the federal Fair Credit Reporting Act (FCRA). Every year, the consumer should order his or her personal credit report from www.annualcreditreport.com. This website was established by the big three CRAs (Experian, Equifax and Trans Union) to comply with the FCRA’s requirement to allow every consumer to obtain their credit report for free each 12 months, without any subscription fee, unlike many of the highly advertised credit reporting services.

If the consumer’s online request is denied, then send a letter or call the annual credit report program which information is on the Federal Trade Commission’s website. If the requests by phone and letter are also rejected, that is a sign that the consumer’s credit report may be compromised, either by identity theft or a mixed file. Further action should be taken immediately.

Errors on any credit report should, of course, be disputed in writing and by phone, as a follow up. There is no need to hire a credit repair company, as the dispute process can be done with a simple letter, which I always recommend be sent by U.S. Certified Mail, with a return receipt, and that a photocopy be kept of the exact letter mailed and all supporting documentation. I often find that the consumer can do a better job for him or herself, than the form letters used by credit repair organizations.  The letters and responses from each CRA should be tracked and an experienced consumer lawyer consulted, if the disputes are not resolved satisfactorily and accurately.

False accounts and incorrect payment history must be disputed, of course.  False addresses and incorrect personal information, such as Social Security Numbers or Date of Birth, must also be disputed, as this may indicate that the CRA consumer file has been corrupted or identity theft has occurred.  Finally, in the inquiries section of the report, the consumer must review to ensure no companies have viewed their credit report without permission, such as an ongoing credit relationship or a credit application at the time of the credit inquiry.

Consumers who have a common name, share a name with someone else, or have been rejected for credit possibly based on someone else’s bad credit history, face a problem that was faced by Julie Miller.  It is possible that the consumer is unable to stop this and a consumer lawyer must be consulted about possible litigation.

If the consumer puts a security freeze on their personal credit reports with each CRA, then at least the consumer knows that his or her credit report is not accessible to the creditors of the other consumer. A security freeze requires the CRA call the consumer on a specific phone number before releasing any of the consumer’s credit information to a credit issuer on an application.

Other situations in which the consumer should pay for a security freeze include having a relative with the same or a similar name or where others people share a mailing address.  In particular, a parent or a child with the same name, except for Jr., Sr. or other minor variant.  A security freeze should be obtained when a consumer moves, especially if the old address will be occupied by someone with the same last name.  A security freeze is important following separation from a spouse or where others have access to the consumer’s mail, such as bank statements and credit offers.

To reduce opportunities for unauthorized access, the consumer should opt out of credit offers.  There are two ways to opt out of credit solicitations through the CRAs, both of which can be started at www.optoutprescreen.com. There is the five-year opt out and the permanent opt out.  I recommend the permanent opt out, because a consumer can always apply for credit and compare offers from approved creditors.  A problem that a few of my clients have experienced are credit offers received by regular U.S. Mail, which is stolen from their mailbox by a stranger or taken by someone living at that address.  Of course, if bank and credit statements are sent to an unsecured mail box, this must be corrected, because that always poses a risk for fraudulent transactions by thieves.

Written by Robert Stempler, California Consumer Attorney and President of Consumer Law Office of Robert Stempler, APC. The firm has published several short videos, articles, and a blog for consumers on debt collection lawsuits at www.stopcollectionlawsuits.com .