Articles Posted in Credit Reporting

A couple of months ago, the United States Supreme Court issued what will no doubt become a landmark opinion in the FCRA litigation arena. That case, Safeco Insurance Co. of America v. Burr, clarified for all the courts in the land, including the Seventh Circuit (that had wrongly imposed a higher standard), that punitive damages may be awarded under the FCRA for the reckless disregard of a statutorily-imposed standard of conduct. Many courts had previously said that only intentional or knowing conduct would suffice.

What does this mean? Well, it’s HUGE! Quite simply, it means that punitive damages will be much, much easier for consumers to obtain under the FCRA. It means that FCRA defendants will have a much more difficult time obtaining summary judgment on punitive damages claims. It means the value of many FCRA lawsuits just went up astronomically, because now consumers can get these claims before a jury. And when that happens, look out! I think we’ll see a slew of large punitive damage verdicts in the next year.

Hopefully, this will make both the furnishers and credit reporting agencies care a little bit more about maintaining standards designed to ensure accurate credit reporting.

By the way, I can’t believe it’s been a month since my last blog entry! That’s way too long. I have just been so incredibly busy that I simply haven’t had the time. I’m not sure there’s anyone out there who really cares, ha ha, but if there is, then I apologize!

The United States Court of Appeals for the Seventh Circuit decided the case of Heather Gillespie and Angela Cinson v. Equifax Information Services, L.L.C. on May 3, 2007. The case contains some language of which every FCRA/Consumer lawyer in the United States should be aware.

Plaintiffs in this case claimed that Equifax’s consumer disclosure was not clear and accurate as required by sec. 1681g(a)(1) of the FCRA because the disclosure does not allow a consumer to determine whether Equifax is properly calculating when a debt must be removed from a consumer’s credit report as required by sec. 1681c(a)(4) (seven years for most adverse accounts). The court agreed, finding that the disclosure was accurate but not clear:

We conclude that the consumer reporting agency must do more than simply make an accurate disclosure of the information in the consumer’s credit file. The disclosure must be made in a manner sufficient to allow the consumer to compare the disclosed information from the credit file against the consumer’s personal information in order to allow the consumer to determine the accuracy of the information set forth in her credit file. In writing sec. 1681g(a)(1), Congress requires disclosure that is both “clearly and accurately” made. An accurate disclosure of unclear information defeats the consumer’s ability to review the credit file, eliminating a consumer protection procedure established by Congress under the FCRA.

Now that’s good stuff! That is the kind of language that allows consumer lawyers to keep the credit reporting agencies honest, which in turn benefits all consumers.

Incoming Chairman of the House Financial Services Committee Rep. Barney Frank (D-Mass.) has announced his intent to hold hearings in 2007 aimed at the credit reporting industry. Frank believes that the 2003 Fact Act that provided consumers easier and cheaper access to their credit report may not have gone far enough. Providing access is a good start, but if consumers cannot correct the errors they find on their credit reports, then Frank believes further legislation may be warranted.

Frankly, (ha ha) this comes as no surprise to me. When a consumer disputes (click here to see a sample dispute letter) an item on their credit report with one of the big three credit reporting agencies, Trans Union, Experian and Equifax, the dispute is transmitted electronically to the creditor. In some cases, the creditor then verifies, or confirms as correct, incorrect information. The credit reporting agency then reports back to the consumer that the disputed information is correct and will not be removed from the consumer’s credit report. At this point, the credit reporting agency feels it has done all it can, and directs the consumer to contact the creditor directly to address potentially incorrect information. The problem is, sometimes the consumers doesn’t know how to contact the creditor or the creditor is unresponsive.
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Most people these days are at least somewhat aware of the recent law passed by Congress (Fair and Accurate Credit Transactions Act of 2003, also called FACTA or the FACT Act) that allows each consumer to obtain one free credit report once a year from each of the big three credit reporting agencies, Experian, Equifax and Trans Union. Perhaps most people, however, don’t exactly know where to obtain those reports.

The website to obtain your free credit report from each of the three credit reporting agencies is I did it recently, and checked all three of my reports. The site didn’t work flawlessly, but it wasn’t a major hassle either. I got my reports for free. If you want your credit scores, you have to pay a fee (approx. $6-10) for them or join a service offered by the credit reporting agency (and you then have the option to cancel within 30 days for no charge).

Some choose to obtain one free credit report every four months or so. This makes sense if you are willing to take the time to do that.

But I digress. Taking advantage of the American public’s vague knowledge of entitlement to a free credit report,, a subsidiary of Experian, has been doing a lot of television advertising lately. If you watch much tv, you’ve probably seen their commercial. Their commercial gives the impression that you can obtain your free credit report through their site.

Not exactly.

Technically you can, but you’d have to purchase their credit monitoring service and then cancel it within the 30 day trial period. The point of the website is to get you to purchase this credit monitoring service, called Triple Advantage, for $12.95 a month. Now, credit monitoring services can be a good thing for those who want the peace of mind and can afford to pay for it, don’t get me wrong. It’s just wrong to trick people into purchasing it when all they want is the credit report guaranteed to them by Federal law.

To be fair, the site does explain how to obtain your truly free report from But, not surprisingly, it’s sort of fine print. Be warned.

Ever wonder what it would take to have a PERFECT credit score? Actually, Fair Isaac Corporation, creator of the FICO credit scoring system (maximum score = 850), is on record stating that a perfect score is impossible. Apparently the best you can reasonably hope for is 820 to 840. Approximately 1% of the population is in the 840 range. Who are these people and what does their credit look like? Here’s what their credit history generally looks like:

* a very long history of credit use (something like 30 years!)

* a few accounts with about 20 years of positive credit use
* at least one installment loan (mortgage or auto loan) in good standing
* between four and six revolving accounts (credit cards) in good standing, with balances less than a third of the credit limit
* no late payments (more than 30 days past due) in the last seven years

* nothing derogatory, like a bankruptcy, a collection account or the purchase of a Chia Pet (just kidding on that last one!)

* and very few credit inquiries, less than three in any six month period.

The bottom line is, you don’t really need a perfect credit score. In my experience, any score in the high 700’s or the 800’s will get you the best rates on any credit you might need.