The Five Sections of a Credit Report and the Types of Errors Found in Each

Your credit report has five main sections. Error can occur in each. The errors in each section are of different type and require different means and methods to correct. At Lawson at Law, PLLC we know how to identify and fix errors in all sections of your credit report.

I.     Personal Information

The personal information section often appears at the beginning of a credit report. The information in this section almost always contains some sort of error or incomplete information. Personal information includes names, name variations, addresses, and employers. Creditors use the information this section to hunt you down.

Credit reporting agencies gather and report this information directly. Errors in the personal-information section are usually these easiest to correct. But these errors seldom hurt your credit score or your ability to obtain credit. To correct this information, you need to directly dispute it with the credit reporting agencies.

II.     Accounts

The account section of your credit report contains your credit history. Both open and closed accounts appear in this section. Often this section is separated between positive and negative accounts. Account information is furnished by subscribers (creditors) that pay the credit reporting agencies to report this information. A variety of errors can occur here, including:

  • Incorrect payment histories.
  • Erroneous late payments.
  • Wrong number of days a payment has been late, usually appearing as 30, 60, 90, or 120 days or more late. Any payment history showing a late payment of 90 days late or more is counted a “severe delinquency,” which has a substantial negative effect on your credit score.
  • Incorrect bankruptcy information.
  • Incorrect drop-off dates, e. the date that a negative account will be removed from your credit report
  • Accounts that are not yours arising from identity theft or merged reports, e. information that belongs to someone else appearing on your credit report.

To correct errors in account section of your credit report, it is critical that you dispute the information with the consumer reporting agency reporting the information. This is the only way to trigger a furnisher’s liability under the Fair Credit Reporting Act (“FCRA”).

III.       Collections

Anything appearing in this section of your credit report is bad and will hurt your credit score. Information in this section is furnished by debt collectors. Medical debt appears in this section. If the information is false or if a debt collector fails to note that a debt has disputed, the debt collector may be liable for violations of the Fair Debt Collection Practices Act (“FDCPA”). The collection section of a credit report usually doesn’t contain a credit history. Rather, the information is limited to basics like the original amount of the debt, the current amount of the debt, the date the collection account was opened, and the last date that the debt collector furnished information about the account to the credit reporting agency. Often the information will include the name of the original or current creditor on the debt.

In order to correct errors in this section of the report, it is critical that you dispute the information with the consumer reporting agency reporting the information. This is the only way to trigger a furnisher’s liability under the FCRA.

IV.     Public Records

Like collections, anything appearing in this section of your credit report is very bad and will substantially hurt your credit score. The main items of information in public-record section of a credit report are judgments, tax liens, and bankruptcies. The main types of errors in public-record section of credit reports arise from (a) credit reporting agencies failure to update judgments to reflect that they have been satisfied or vacated or to timely remove the information, (b) credit reporting agencies failure to update tax lien information to reflect that it has been paid or to timely remove the information, and (c) inclusion of someone else’s bankruptcy information on your credit report.

Credit reporting agencies gather and report this information directly. These errors can devastate your credit score, lowering your score by up to forty (40) point. In order to correct this information, you need to directly dispute it with the credit reporting agencies.

V.     Inquiries

There are two types of credit inquiries: hard and soft. An inquiry occurs whenever a subscriber requests your credit report. As a general rule, hard-credit inquiries only occur when you apply for a loan or credit. Usually, you must authorize a hard-credit inquiry. (But be careful, the authorization is usually buried in the fine print.) Only hard credit inquiries are published to others who request your credit report. Hard inquiries could lower your credit score by a few points and may remain on your credit report for two years.

Soft inquiries occur when you pull your own credit report and when others pull report for almost reason other than a credit application.

You can dispute inquiries on your credit report directly with the entity that requested your credit report. (The inquirer’s address should appear in the inquiry section.) Or you can dispute inquiries with the credit reporting agencies. It is unlawful for someone to request your credit report without a permissible purpose. You can recover up to $1,000 in statutory damages for each impermissible request.

Multiple credit inquiries often arise from online loan applications and financing applications with car dealers. You can protect yourself from multiple inquiries, but you must be vigilant.

 

 

 

Student-Loan FDCPA Collection Case

A Colorado District Court recently denied a debt collector’s motion to dismiss the complaint in Fair Debt Collection Practices Act (“FDCPA”) case concerning the collection of student loans. Breckinridge v. Vargo & Johnson, P.C., 16-CV-1176-WJM-MEH, (D. Colo. Dec. 7, 2016).

Even though the Higher Education Act does not create a private cause of action for consumer-borrowers, the court ruled:

Third-party debt collectors acting on behalf of guaranty agencies to collect federal student loans must comply with the FDCPA.

Id. at *4

The plaintiff in Breckinridge alleged that the debt collector added collection fees to the amount of past-due student loans that were not allowed under the terms of the applicable Perkins loan program. The Breckinridge Court ruled that complaint stated a valid claim for relief under the FDCPA.

The Breckinridge Court turned to the Student Financial Aid Handbook published by the Department of Education (“DOE”) to address the question of whether the defendant debt collector had collected or attempted to collect collection costs that it was not entitled to.

The Breckinridge case is important. Increasingly, the DOE is turning more student loans over to private collection firms. Indeed, the DOE recently referred hundreds of millions of dollars of delinquent student loans to private collection firms. With the increase in debt and debt referred to debt collectors, there is bound to be a rise in abuse and overreach.

Stay vigilant.

 

LVNV Funding Garnishing your Pay or Bank Account?

Has LVNV Funding, LLC garnished your wages or bank account? If so, chances are very good that LVNV has taken money from you that it has no legal right to recover from you. We can help you get that money back in addition to up to $1,000.00 in statutory damages.

LVNV Funding, LLC is a third-party debt collector. LVNV buys old debt, often charged-off credit card debt, for pennies on the dollar. LVNV often collects debt through its collection servicer Resurgent Capital Services LP. LVNV and Resurgent are both subsidiaries of Sherman Financial Group. In turn, Sherman Financial is at the center of a web of related financial entities, including Credit One Bank, N.A. Credit One is in the business of issuing credit cards to consumers with bad credit ratings. The cards are loaded with fees and interest rate traps that often lead the consumers to default. After charge off, these debts are “sold” to LVNV, which often places them with Resurgent for collection.

LVNV is subject to the Fair Debt Collection Practices Act (“FDCPA”). It is an express violation of the FDCPA for a debt collector to collect more on a debt than is legally owed on the debt. If LVNV violated the FDCPA by garnishing your wages or bank account, we can sue LVNV under the FDCPA on your behalf at no cost to you. We can represent you for no cost because under the FDCPA, LVNV has to pay our fees and costs if we win or settle with LVNV. We are so confident of our ability to get a judgment or settlement against LVNV and at least $1,000.00 for you, that we are happy to take this risk.

Please call or email us today to see if we can help you recover what LVNV took from you illegally.

Turning the Tables on Debt Buyers—Using Arbitration as a Defense to a Collection Lawsuit

Turning the Tables on Debt Buyers—

Using Arbitration as a Defense to a Collection Lawsuit

Arbitration clauses in consumer contracts are the result of legal evil geniuses’ perversion of the law to defeat consumer rights, to avoid litigation, and to prevent culpable companies from being held liable for damages on a class-wide basis. Courts unfortunately have sanctified this perversion making consumers all across worse off and more vulnerable to harm from corporations, big finance, and big business. This article suggests how an individual consumer like you can use this legal perversion to her advantage as a defense to a lawsuit filed by a debt buyer.[1]

Most debt-buyer[2] lawsuits are attempts to collect charged-off credit card debts. In turn, most of the underlying credit card agreements in these lawsuits contain mandatory arbitration clauses. These are the agreements that you can use against the debt buyers to compel the debt buyer to arbitrate its claim against you. But before getting to the mechanics of compelling arbitration, you may ask why arbitrate?

I.     Why Arbitrate?

There are several very good reasons to want to take your debt-collection to arbitration:

  1. Arbitration greatly increases the cost of collection for debt buyers.
  2. Arbitration is informal process, allowing you to more easily represent yourself.
  3. Debt buyer counsel is not familiar to the arbitrators.
  4. An arbitration award does not appear in the public-record section of your credit report.   
  1.      Increasing Cost of Collection

Bringing a debt-collection lawsuit in Kentucky is cheap and ridiculously effective. Typically, the costs for filing a collection lawsuit in a Kentucky District Court is $125.00 or less and filing a collection lawsuit in a Kentucky Circuit Court is $150.00 or less.[3] In something like 95% of these cases, the defendant never appears and the debt collector is able to get a default judgment against the consumer with no additional court costs. But not so in arbitration.

An arbitration is carried out by a private arbitrator. Under most credit card arbitration agreements, the debt buyer has to pay all of the arbitration fees, which can run from $2,000.00 to $4,000.00. Moreover, unlike in a court case, the debt buyer cannot recover its court costs in the arbitration award. So in an arbitration, the debt buyer has to pay much more and cannot shift these costs to the consumer. Many times, the debt buyer will do the math and elect not to pursue the arbitration based on a simple cost-benefit analysis.

Additionally, the increased costs of arbitration gives you the consumer a great deal of leverage should you wish to settle the debt.[4] That is, the debt buyer, or debt-buyer’s counsel, will be much more open to reasonable settlement offers. If you do settle, there are two things you must make conditions of the settlement: do not sign an agreed judgment and require the debt buyer to delete the trade line from your credit report.

  1.      Informal Process

Taking a collection action out of the court system is HUGE advantage for most collection defendants.

First of all, the arbitration process is not subject to court rules of procedure or evidence. Debt collectors use the legal system to their utmost advantage by using their knowledge of court rules to intimidate and roll over consumers who have no knowledge or experience with these rules. In particular, debt collectors use discovery to trap defendants into inadvertently admitting liability and summary procedures to deny the defendant his day in court. The debt buyer loses all those advantages in an arbitration. Instead of rules and procedures, each side gets to make his or her case to the arbitrator in an informal proceeding, usually a telephonic conference.

  1.      No Familiarity with Arbitrators

 Counsel for debt collectors appear in the court system in front of the same judges day after day. Judges and debt collection counsel know each other and often friendly. This is not meant to impugn the integrity of judges, but familiarity does breed bias in the debt-buyer’s counsel’s favor, especially in the absence of a defense or against unknown, unrepresented consumer. Debt buyers lose this advantage in an arbitration. The arbitrators are randomly selected. Further, because debt buyers arbitrate so few cases the opportunity for such familiarity simply does not arise.

  1.      No Public Record

In an arbitration, the debt buyer loses the ability to turn its junk debt into a super debt. Debt buyers bring suit for purposes of obtaining a default judgment against the consumer. Judgments are super debts, subject to a long statute of limitations, and which allow the debt buyer to use the force of government to seize your assets.

The statute of limitations for a judgment is ten years under Kentucky law. But the debt collector can easily reset the limitation period by making any attempt to execute on the judgment. So for intents and purposes there is no statute of limitations on judgments in Kentucky.

And armed with a judgment, a debt buyer can garnish 25% of your wages and wipe out your bank accounts. A debt buyer can also file a judgment lien that attaches to any real property you own. This makes selling or buying any property problematic.

Finally, a judgment appears on the public-record section of your credit report. This can result in a reduction in your credit score of 40-60 points. But an arbitration award against you does not appear on your credit report. One word of caution, a successful claimant in an arbitration case can reduce the award to a judgment. Of course, you have the right to pay or settle an arbitration award before it is reduced to judgment.

II.     Compelling Arbitration

Moving to compel arbitration occurs inside the debt-collection lawsuit. So you it requires the use of court rules of procedure and evidence. I am very familiar with this process and have been successful in moving to compel arbitration in several cases. I can represent you and bring the motion on your behalf for a very reasonable fee. I can also draft the motion for you to file and argue yourself for even less.

If you’ve been sued by a debt collector, please  call or email me today.

 

           

 

 

[1] Disclaimer: This article is not intended to provide legal advice. The information contained herein (legaleze so that you know I’m serious) is for informational purposes only.

[2] There are several active debt buyers in Kentucky that regularly file suit to collect debts, including: Midland Funding, LLC; Portfolio Recovery, LLC; Calvary SPV I, LLC; and LVNV Funding, LLC.

[3] These costs are so cheap because public tax dollars subsidize and fund the court system.

[4] The two main reasons you may want to settle the debt are to (1) pay your debts, and (2) clean up your credit report.

New News (to me anyway)

Here are some recent stories I found interesting that intersect with practice:

ID Theft is on the Rise

The FTC received 490,000 Identity Theft complaints in 2015. This represents a “47 percent increase over the prior year, and the Department of Justice estimates that 17.6 million Americans were victims of identity theft in 2014.”

idt-complainttrends_jan2016_150px


College Students and ID Theft

According to IDT911, here are three types of Identity Theft that College Students are particularly vulnerable to:

  • Criminal identity theft: College students are particularly susceptible to criminal identity theft, considering they live near so many strangers. If someone in your dorm or apartment building uses your identity at the time of arrest—simply because they know your name, apartment number or other minor details—you could be left facing charges for the unresolved issue. If this person happens to have borrowed or stolen your driver’s license, perhaps because you’re old enough to purchase alcohol and they’re not, then they may even be able to provide your complete identity to the police. You never find out about the incident, and therefore you never resolve it until a warrant is issued for your arrest.

  • Medical identity theft: Much like criminal identity theft, college students have to safeguard their identities against people who want to use them to secure medical care. It might be something that seems harmless on the surface. Maybe, a girl in your building needs a way to access birth control without alerting her parents. But it can also be something very serious, such as someone stealing your identity in order to get a prescription for controlled substances. Not only can your medical record permanently reflect care that you never received, but you could find yourself involved in a crime if those prescriptions are then used for illegal distribution.

  • Internet takeover: One of the scariest identity theft crimes for young people to envision just might be internet takeover. While the other forms of the crime are alarming, they can more easily be resolved. But when someone takes over your technology or gains access to your accounts, the fear of long-term damage is very real. They may just lock you out of your accounts for the fun of it, but it could lead to expulsion and lost job opportunities if a hacker takes over your university account and deletes your work, or accesses your Facebook account and uses it to post hate speech, embarrassing photos, or other potentially harmful content.


The Rich are more Worried about ID Theft than Terrorism or Illness

Nearly three-fourths of high net worth investors are worried about identity theft, ranking it higher than terrorism (65 percent) or a major illness (56 percent), according to a new Morgan Stanley Investor Pulse Poll.

Screen Shot 2016-08-31 at 1.07.07 PM

 

Has Unifund Garnished you? We can help you fight back.

Has Unifund CCR Partners or First Resolution Investment Corporation (“FRIC”)[1] garnished your wages or bank account? If so, chances are very good that Unifund has taken money from you that it has no legal right to recover from you. We can help you get that money back in addition to up to $1,000.00 in statutory damages.

Unifund is a third-party “debt buyer.” It does not lend money or originate credit like credit card companies and banks. It doesn’t make or produce anything. Instead, it buys defaulted accounts from original creditors like Bank of America, FIA card services, Capital One, Chase, Providian, Synchrony Bank and other creditors. Debt buyers are also considered debt collectors and have to comply with the federal Fair Debt Collection Practices Act (FDCPA). Unifund is very active in the Commonwealth of Kentucky. We have recently discovered that Unifund has a pattern and practice of adding fees and costs to garnishments that it has no legal right to recover. And Unifund still garnishes and enforces judgments with usurious interest of 24% or more. This is unlawful.

It is an express violation of the FDCPA for a debt collector to collect more on a debt than is legally owed on the debt. If Unifund violated the FDCPA by garnishing your wages or bank account, we can sue Unifund under the FDCPA on your behalf at no cost to you. We can represent you for no cost because under the FDCPA, Unifund has to pay our fees and costs if we win or settle with Unifund. We are so confident of our ability to get a judgment or settlement against Unifund and at least $1,000.00 for you, that we are happy to take this risk.

Please  call or email us today to see if we can help you recover what Unifund or FRIC took from you illegally plus $1,000.00 in statutory damages.

 

[1] Unifund purchased all of FRIC’s assets in 2015.


ABC Breaking News | Latest News Videos

Are Judgments or Tax Liens Hurting your Credit Score?

Judgments and tax liens on your credit report are some of the worst negative items on your credit report. “It’s estimated that each judgment and collection account entry can reduce a FICO score from 15 to 40 points. The severest detrimental effects come from entries that involve public records, such as judgments, and information from an original creditor, such as tradeline information.”[1] “[A]dverse public records, which include [judgments] are considered by the FICO score. Your score can be affected by the mere presence of an adverse public record, whether paid or not.”[2] As for tax liens, these “are considered very negative and can remain on your credit report longer than any other item. Unpaid tax liens remain part of your credit report for 10 years, and paid tax liens remain for seven years, so it definitely is important that you get it removed if it does not belong to you.”[3] While paying off a judgment or tax lien will only have a small incremental increase in your credit score, many creditors will not extend your credit as long as a judgment or tax liens remains unpaid regardless of the judgment’s or tax lien’s effect on your credit score.[4]

Despite the severe consequences of unpaid judgments and tax liens on credit reports and the ill effects on a consumer’s ability to obtain credit, the Credit Reporting Agencies have a demonstrated pattern and practice of failing to update consumer credit reports to reflect that judgements and tax liens have been satisfied and paid. This is a particular problem for Equifax and Trans Union. In fact, both Equifax and Trans Union recently resolved class actions against them in Virginia over this very issue. Equifax paid three million dollars[5] to settle and Trans Union paid over 1.4 million dollars to settle.[6]

False information as to the status of judgments on your credit report could be hurting your credit score and your ability to get credit. If you suspect that this might be happening to you, please call or email  us today for a free credit report analysis and review.

 

 

[1] http://www.bestcredit.com/credit-ratings-advanced-strategies-for-fico-scoring/

[2] http://www.myfico.com/crediteducation/questions/public-records.aspx

[3] http://www.experian.com/blogs/ask-experian/tax-liens-and-credit-scores/

[4]http://www.answers.com/Q/How_many_points_on_your_credit_score_is_paying_off_a_judgment_worth

[5]https://topclassactions.com/lawsuit-settlements/lawsuit-news/256019-equifax-reaches-settlement-in-fcra-class-action-lawsuit/ (“Equifax agreed to a $3 million class action settlement that would resolve claims that the company violated the Fair Credit Reporting Act. As part of the settlement, Equifax will remove any judgments from Virginia state court from its consumer database.”)

[6] https://topclassactions.com/lawsuit-settlements/lawsuit-news/10036-trans-union-reaches-class-action-settlement-inaccurate-credit-reports/ (“Trans Union, LLC has agreed to pay up to $1.4 million to consumers who obtained a credit report with incorrect information that may have impacted their financial options as part of a class action lawsuit settlement.”)

PRA Garnishing your pay or your bank account?

Has Portfolio Recovery Associates, LLC (“PRA”) garnished your wages or bank account? If so, chances are very good that PRA has taken money from you that it has no legal right to recover from you. We can help you get that money back in addition to up to $1,000.00 in statutory damages.

PRA is the second biggest, publicly-traded third-party “debt buyer” and debt collector. PRA does not lend money or originate credit like some credit card companies. Instead, it buys defaulted accounts from original creditors like Citibank, Synchrony Bank, Bank of America, FIA, Capital One, Chase, or other creditors. Debt buyers are also considered debt collectors and have to comply with the federal Fair Debt Collection Practices Act (FDCPA). PRA is very active in the Commonwealth of Kentucky, bringing thousands of lawsuits a year.

The Consumer Financial Protection Bureau found that PRA

attempted to collect debts that they knew, or should have known, were inaccurate or could not legally be enforced based on contractual disclaimers, past practices of debt sellers, or consumer disputes. The companies also filed lawsuits against consumers without having the intent to prove many of the debts, winning the vast majority of the lawsuits by default when consumers failed to defend themselves. These practices violated the Fair Debt Collection Practices Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act.

We at Lawson at Law, PLLC have recently discovered that PRA has a pattern and practice of adding fees and costs to garnishments that it has no legal right to recover.

It is an express violation of theFDCPA  for a debt collector to collect more on a debt than is legally owed on the debt. If PRA violated the FDCPA by garnishing your wages or bank account, we can sue PRA under the FDCPA on your behalf at no cost to you. We can represent you for no cost because under the FDCPA, Midland has to pay our fees and costs if we win or settle with PRA. We are so confident of our ability to get a judgment or settlement against LVNV Funding and at least $1,000.00 for you, that we are happy to take this risk.

Please call or email us today to see if we can help you recover what Portfolio Recovery Associates, LLC took from you illegally plus $1,000.00 in statutory damages.

LVNV Funding, LLC Garnishing your pay or your bank account?

Has LVNV Funding, LLC garnished your wages or bank account? If so, chances are very good that LVNV Funding has taken money from you that it has no legal right to recover from you. We can help you get that money back in addition to up to $1,000.00 in statutory damages.

LVNV Funding is a third-party “debt buyer.” It does not lend money or originate credit like some credit card companies. Instead, it buys defaulted accounts from original creditors like Bank of America, FIA, Capital One, Chase, or other creditors. Debt buyers are also considered debt collectors and have to comply with the federal Fair Debt Collection Practices Act (FDCPA). LVNV Funding is very active in the Commonwealth of Kentucky, bringing thousands of lawsuits a year. We have recently discovered that LVNV has a pattern and practice of adding fees and costs to garnishments that it has no legal right to recover.

It is an express violation of the FDCPA for a debt collector to collect more on a debt than is legally owed on the debt. If LVNV Funding violated the FDCPA by garnishing your wages or bank account, we can sue LVNV Funding under the FDCPA on your behalf at no cost to you. We can represent you for no cost because under the FDCPA, LVNV Funding has to pay our fees and costs if we win or settle with LVNV Funding. We are so confident of our ability to get a judgment or settlement against LVNV Funding and at least $1,000.00 for you, that we are happy to take this risk.

Please call or email us today to see if we can help you recover what LVNV Funding, LLC took from you illegally plus $1,000.00 in statutory damages.

Midland Funding Garnishing your Pay or Bank Account?

Has Midland Funding, LLC garnished your wages or bank account? If so, chances are very good that Midland has taken money from you that it has no legal right to recover from you. We can help you get that money back in addition to up to $1,000.00 in statutory damages.

Midland Funding, LLC is a third-party debt collector. Midland buys old debt, often charged-off credit card debt, for pennies on the dollar. Midland Funding is part of the Encore Capital Group, Inc., which is a publically-traded company and one of the largest debt collectors and debt buyers in the world. According to a recent Consent Order that Encore Capital reached with the Consumer Financial Protection Bureau, Encore receives and “an average of 30,000 written disputes and complaints and 10,000 oral disputes and complaints directly from Consumers in a typical month relating to Encore’s Debt collection and credit reporting,” and another “100,000 Consumer disputes” made with consumer reporting agencies.

As a debt collector, Midland is subject to the Fair Debt Collection Practices Act (“FDCPA”). It is an express violation of the FDCPA for a debt collector to collect more on a debt than is legally owed on the debt. If Midland violated the FDCPA by garnishing your wages or bank account, we can sue Midland under the FDCPA on your behalf at no cost to you. We can represent you for no cost because under the FDCPA, Midland has to pay our fees and costs if we win or settle with Midland. We are so confident of our ability to get a judgment or settlement against Midland and at least $1,000.00 for you, that we are happy to take this risk.

Please call or email us today to see if we can help you recover what Midland took from you illegally.