Fix Your Credit with These FCRA Loopholes
We’ve discussed collection laws, but how creditors treat your credit report is also regulated by federal law, specifically the Fair Credit Reporting Act. There are three important sections of the FCRA that can help you clean up your credit: Sections 604, 609, and 623. Therefore use credit repair loopholes to fix your credit score.
Credit repair loopholes, here’s what you need to know to master these explosive secrets
Section 604 – Permissible purposes of consumer reports:
When a financial institution, landlord, or employer checks your credit report, it’s called a hard inquiry. These hard inquiries could lower your credit score and cause you to be denied credit. Especially when you made multiple hard inquiries in a short time span.
Section 604 provides guidelines for what constitutes a permissible hard inquiry, including a signed contract from you. What most people don’t know is these hard inquiries aren’t typically tracked by the credit agencies themselves. Instead, they use a third-party company called SageStream to track this data. This gives you a chance to help your credit score.
Contact SageStream on their website to request a security freeze on your information. This will stop them from reporting hard inquiries to the credit agencies. Subsequently, it may help to raise your credit score by a few points.
Section 609 – Disclosures to consumers:
On top of the FDCPA letters you send to collectors, you should also send an FCRA 609 letter to credit agencies. This piles the work onto the creditors and makes their lives more difficult. They now must respond to both your request and the credit agency’s request.
If the collector or credit agency doesn’t respond within 30 days, you now have a paper trail of them not working with you. You can send a non-response letter to have the items removed from your credit report. If it’s not removed, report them to the Better Business Bureau, FTC, CFPB, and consider civil action in court.
Section 623 – Responsibilities of furnishers of information to consumer reporting agencies:
You would think creditors would keep accurate records of all information and accounts, but this isn’t the case. They often lose information, and this is the most solid defense used in foreclosure cases. Most of the time the mortgage company can’t provide the original paperwork and the court dismissed the case.
After you’ve disputed the negative credit items with the credit agency using Section 609 letters, Section 623 letters force the creditor to prove the debt is valid. If they can’t, you have legal grounds to pursue civil action in court and following these three sections in order give you a solid defense to not only have your credit report corrected, but also receive financial compensation for damages caused. You may continue reading to know more others credit repair loopholes, you may skip if you already know.
Section 605 – derogatory information verification:
If the accurate derogatory information in the consumer’s file cannot verify, the reporting agency is required to remove it. Not just for the original company, this law required all the company that reports negative credit events needs to produce verifiable proof of the negative event. It cross-checks the accountability of credit reporting agencies for the negative information they pass on.
Due to this loophole, the reporting agencies need to investigate and remove any disputed, negative item from your credit report within 30 days if it cannot verify.
Only one way to find out Mr.Mclnnis challenging the credit bureaus to verify the negative credit events in the credit reports of his clients by producing a copy of the original creditor’s documentation.
He did not challenge the correctness of these events. He just used a legal strategy to challenge the credit bureau’s ability to verify its correctness. They have no right to continue to maintain it on their credit reports if they cannot verify it. In addition, credit bureaus began to comply. They remove the negative events from the credit records.
Here are a few tips that can help you to take the benefits of these Credit Repair Loopholes:-
1. When disputing, start with closed accounts. If the account is open, there is a good chance that the creditor ill verifies it.
2. So when disputing, Start with the oldest closed accounts first. Many times, older accounts sold or transferred multiple times. and the current debt collector does not have verification of the debt. Additionally, the equal credit opportunity Act only requires creditors to maintain written documentation for twenty-five months (see chapter 15).
3. Look for duplicates accounts, Many times, the original creditor will report the account is derogatory and sell it to a collection agency, who will also list it as derogatory. Many times, the same single negative account can be on your report as many as two or three times. This is illegal. Simply dispute the accounts with the credit bureaus and inform them that they are duplicate accounts.
4. Scrutinize your credit report for the accounts that are past the statute of limitations (seven years). The seven-year period now starts 180 days after the account first delinquent. However, it used to be from the date of the last activity. Congress has changed this so that debt collectors cannot continue to re-age old accounts.
I can’t stress enough that you need to keep documentation of every and all contact with your creditors to be successful in court. That one trick will change your entire life.
Of course, what credit you choose to accept can impact your life too. So that’s what we’ll talk about next.