Since October 31, 2019, active duty military service members serving away from their usual duty station, as well as members of the National Guard regardless of where they are serving, are eligible for free credit monitoring from Experian, TransUnion and Equifax. Here’s why:
Upon sign up, a covered consumer gets two years of free credit monitoring. After two years, the national credit reporting agencies (NCRA) may require the consumer to recertify covered status. The NCRA is required to notify covered consumers of “material additions or modifications” to the credit report, such as a notice of bankruptcy, foreclosure, or payment over 30 days late. The NCRA is also required to notify the covered consumer of new accounts opened in the consumer’s name. The credit monitoring service can help in the timely identification of problems, including identity theft. The NCRAs post instructions for signing up on their web sites.
If the adverse information is accurate, the Credit Reporting Agency (CRA) can report it for seven years, or ten years for bankruptcies. Essentially, the only thing that heals this wound is the passage of time. Sometimes, that medicine doesn’t work either, because these time deadlines don’t apply to certain transactions, such as a credit purchase of $150,000 or more, employment at an annual salary of $75,000 or more or the purchase of life insurance policy valued at $150,000 or more.
Despite certain misleading advertisements, the fact of the matter is, no one can force a CRA to remove accurate, non-obsolete information. And if the information is inaccurate, you can dispute it yourself, without paying someone else to do it for you. Further, depending on your state law, it may be illegal to charge any fee prior to completing the service that the credit doctor has agreed to perform. For example, NC Gen Stat 66-223 & 224 prohibits up-front fees, mandates a three date right to cancel and requires the credit doctor to make certain disclosures in its contracts.
There are many sources of errors in credit reports, and such errors are common. People make mistakes, including those who make the hundreds of thousands of entries in credit reports and the people who report said information to them. One important source of error is identity theft; in which a criminal harms your credit by (a) making unauthorized purchases using your existing credit, such as a credit card or ATM card, or (b) fraudulently taking out additional loans in your name. If you suspect identity theft, follow the steps in the Federal Trade Commission online identity theft checklist.
The Federal Fair Credit Reporting Act (FCRA) requires CRAs to remove erroneous entries from your credit report. According to the FCRA, when consumers dispute the accuracy of information in the credit report, the CRA must conduct a reasonable investigation to determine whether the information is accurate and within thirty days delete information that is inaccurate or cannot be verified. The deadline increases to 45 days if the consumer provides information relevant to the investigation. The law says that the CRA must investigate and prove that the information is accurate or else remove it, but don’t count on that. It is often up to the consumer to prove to the CRA that the information is false.
If the CRA claims that it has investigated the matter and has determined that the disputed information is accurate, the consumer can demand that the credit report reflect that the matter is disputed. Additionally the consumer can demand that the CRA post the consumer’s stated reasons for the dispute.
Consumers who find that the CRA is failing to remove inaccurate or stale information, or is otherwise violating the law can sue the CRA. The willful, knowing, or negligent noncompliance with the FCRA exposes the credit reporting agency to liability for compensatory damages up to $1,000, plus punitive damages and attorney’s fees.
Consumers can also make an online complaint to the Consumer Finance Protection Bureau (CFPB). In many cases, the complaint may resolve the problem or, the CFPB may decide to sue the CRA, particularly if the CRA has harmed many consumers. Last July, the CFPB settled a case with Equifax, requiring the defendant to pay $700 million in restitution and penalties and take actions to protect consumers. The case arose from a result of a massive data breach involving about 147 million files.