In today’s environment, a credit report and the indicated credit score is an important document used to determine a borrower’s credit eligibility, interest rate, and equity requirements. The lower the score, the less likely financing may be obtained. If financing is offered, a low credit score will result in a higher interest rate, larger down payments on home and cars, and higher net worth requirements for businesses. Bank card approvals will be limited to low credit limits with high interest rates or secured cards requiring dollar to dollar collateral. Small business owners in need of a working capital line of credit will find the net worth requirements, interest rates, and collateral requirements much higher and credit lines more difficult to secure.
Business reasons for obtaining credit reports are also ways for employers to mitigate risk. The credit score reflected on an individual’s report is a key indicator an employer uses in determining employment risk. An individual with a low credit score is considered to have poor personal financial management skills, represents a higher risk of mishandling the company’s finances, or make poor credit decisions in exchange for personal favors.
Your credit score effects extends into other areas as well, such as housing, cell phone plans, insurance, and internet access. A rejection based on a poor score can have consequences. Your cost of living may dramatically increase because companies using your credit report are less likely to take a risk on you if they suspect you will not be able to pay them.
To remedy problems that occur with the credit reporting agencies, Congress passed the Fair Credit Reporting Act (FCRA). This law provides procedures in remedying improper credit reports and was enacted to prevent future errors.
Under FCRA, if a company fails to remove inaccurate information after being notified of the error, then they can be subject to penalties. You should monitor your credit by obtaining a full credit report at least once a year. Although you are entitled once per year to obtain your full credit report from the reporting agencies, we actually recommend you order a credit report that shows reported debt by all three agencies side-by-side. This is often referred to as a “Tri-Merge” credit report. You should consider consulting with an attorney if you notice
- Inaccurate or incomplete information.
- Another person’s debt being reported as your own.
- More than one entry per account for each credit reporting agency.
- Unfamiliar credit entries, or entries you cannot identify.
- Inaccurate public records, such as judgments or liens.
Our office offers assistance for individuals who believe their credit report is inaccurate or fraud has occurred. Contact us today and our staff will be happy to review your credit report to determine if we can help.
TILA (Truth in Lending Act) Violations
The Truth in Lending Act is a Federal Regulation that requires disclosures at the time a consumer takes out a loan. The purpose of the act is to ensure that the costs associated with borrowing are accurately calculated and that consumers are aware of these costs. TILA requires the lender to have a standardized form so that you, the consumer, can compare loan rates and take ownership of the choice to borrow.
RESPA (The Real Estate Settlement and Procedures Act) Violations
The Real Estate Settlement and Procedures Act is a Federal Regulation that prohibits fees (The Act does many other things as well) incident to settlement if that amount has not been earned. Anyone connected to the business of settlement services may not receive unearned funds or things of value, including services. You should consider consulting an attorney if you notice:
- A referral fee on your mortgage transaction.
- A reduction in the transaction costs to pay for referral fees.
- Compensation above and beyond earned fees for services rendered.
- Fees for accepting an application.
Identity theft is quickly growing as the internet opens new doors for those looking to steal information. Any person can be the victim of identity theft through stolen social security numbers, credit card information, and other personal data. If you notice that your bank account has unauthorized transactions or that your credit report displays information of misuse and debts you did not incur, you may be a victim of identity theft.
Unfair Trade Practices Act Violations
The UTPA and the SCUTPA (state-wide statute) protects consumers from “unfair or deceptive acts or practices.” Specifically, it allows the consumer to collect treble damages for violations including:
- Unfair or deficient methods for accepting and reviewing modification
- Misreporting fees or assessments to the borrower
- Accepting fees while simultaneously participating in an action for foreclosure against that borrower