When I check credit as part of the mortgage application process I always review the report with the client. I do this because I have found credit reports to be notoriously inaccurate. I know Congress passed a bill a few years ago to address this issue. However, I’m still not convinced the system is accurate enough.
I pull anywhere between 150 and 250 credit reports a year and from my experience I have found that the error rate is astonishingly high. I am currently dealing with a friend whose credit report still shows a tax lien he paid off in 1999. Now, the frustrating part is that when he did a purchase transaction back in 2002 or something the tax lien was not on the report (which it shouldn’t). However, now that he’s thinking about buying again the tax lien has magically re-appeared. He has since contacted the IRS and obtained proof that he has paid off the tax lien. He will be faxing it over to the credit bureaus to get this corrected.
Despite efforts by Congress, consumers need to put pressure on the creditors who do the reporting and the credit bureaus who collect the information. A California couple took it a step further and sued a creditor. After repeatedly asking Wells Fargo to correct its erroneous reporting, this couple finally had enough:
As a result of the violations, Reed and Mary Ann Fisher, of Oceanside, Calif. suffered from a two-year uncorrected series of false and inaccurate credit reporting that resulted in damaged credit scores and credit denials, according to their suit and a jury decision, said their attorney, Robert F. Brennan, of La Crescenta, Calif.
And this week, this couple was awarded a $1 million settlement:
Wells Fargo Home Mortgage, as a mortgage servicer, has been ordered by a California Superior Court judge to pay more than $1 million for violations of the federal Fair Credit Reporting Act and the California Consumer Credit Reporting Agencies Act.
I am happy for this couple, because errors on your credit report can end up costing you big. A 30-40 point difference can be worth thousands of dollars in extra interest payments. Sometimes just a few points could end up hurting you. So, it is absolutely imperative that you monitor your credit report on an annual basis. You are entitled to a free credit report every twelve months.
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on Nov 7th, 2009 at 11:20 am
3 months ago i got pre-approved on a VA loan and started looking for a house in Murrieta, Temecula and Lake Elsinore. after 2.5 months of looking, i offered on over 50 houses that are on short sale and foreclosures. I looked at properties most days of the week non-stop. I currently live in Orange County, if you can just imagine the time involved of finding an affordable home for my family. I am a Combat Instructor in the Marine Corps and trying to take advantage of the tax credit available to first time homeowners and it is financially a wise decision for me right now. I get turned down or outbid by most of my offers. Finally i got ashort sale acceptance on 09/30/09 and immediately opened escrow that supposed to close on 10/30/09. But low and behold, my lender called me and said that i can’t qualify anymore. My creditors recently put negative remarks against my credit and it totally negatively impacted my credit score. A jewelry store, i was in good standing since i opened my account and paid them several days prior to my due date and Paid them off in july. instead of them reporting “CURRENT/PAID”, they reported…”DELINQUENT/CHARGE-OFF”! HOW REDICULOUS! ANOTHER CREDIT CARD COMPANY WHICH I ALSO WAS IN GOOD STANDING PAID IT OFF IN SEPTEMBER, ALSO REPORTED “DELINQUENT”. LASTLY, I CANCELLED MY COX CABLE ON 04/13/09, RECEIVED MY FINAL BILL DATED 05/03/09 AND FINAL BILL DUE DATE IS 05/18/09, INSTEAD OF ME PAYING THEM ON THE DUE DATE, I GOT A LETTER FROM CREDIT CONTROL CORP DEMANDING OF COLLECTION PAYMENT! THIS MEANS… COX MUST HAVE SENT THE COLLECTION WAY PRIOR TO MY DUE DATE. I CALLED COLLECTION AGENCY THAT IT IS A MISTAKE.. THEY SAID THEY CAN ONLY COLLECT PAYMENT THAT I HAVE TO DISPUTE IT WITH COX AND EVEN IF IT IS PAID IT WILL STILL BE REPORTED TO THE 3 CREDIT BUREAUS BECAUSE IT IS ALREADY IN COLLECTION, WHICH THEY DID REPORT! I ASKED COX AS TO WHY THEY SENT MY ACCOUNT TO COLLECTION PRIOR TO DUE DATE AND IT’S NOT EVEN LATE YET FROM THE DUE DATE, THEY SAID WHEN YOU CANCEL YOUR SERVICE, PAYMENT IS DUE AFTER 7 DAYS. HOW THE HECK WILL I POSSIBLY KNOW THEIR RULE AND POLICY? THIS IS THE SECOND TIME COX SENT MY BILL TO COLLECTION. wHEN I GOT TRANSFERRED LAST YEAR, I ASK THEM TO CANCEL MY SERVICE AND TO OPEN A NEW SERVICE TO MY NEW ADDRESSI. WHEN I PULLED MY CREDIT REPORT SEVERAL MONTHS AGO, I FOUND OUT THAT I HAVE UNPAID DEBT WITH COX AND SENT TO CREDIT CONTROL COPR AS WELL. I IMMEDIATELY PAID IT OFFF. I ASSUMED THAT THEY WOULD’VE SENT MY BILL TO MY NEW ADDRESS BUT THEY DIDN’T. THEY SAID I DIDN’T HAVE A FORWARDIG ADDRESS BUT I SAID.. I ASK ONE OF YOUR REPS TO OPEN A NEW SERVICE TO MY NEW ADDRESS, HOW CAN YOU NOT HAVE MY NEW ADDRESS IF YOU OPENED A NEW SERVICE?(ANYHOW, NO MATTER HOW I ARGUED WITH THEM, THE DAMAGED IS DONE AND I CAN’T REVERSE THAT REMARK THEY PUT AGAINST ME). I AM IN THE MILITARY, I GET TRANSFERRED EVERYTIME, IS THIS MEAN I AM SCREWED? THIS IS UNFAIR. A LOT OF TIMES WE GET MOMENTS NOTICE TO TRANSFER NEW UNIT OR DUTY STATION AND I ABSOLUTELY HAVE NO CONTROL OF IT! CAN SOMEONE HELP ME FIGHT THIS ABUSIVE CREDITORS? I’M SOOO FURIOUS!! I ASK FOR AN EXTENSION TO CLOSE ESCROW TIL 11/30/09 TO FIX THE TERRIBLE MISTAKES OF MY CREDITORS BUT I AM AFRAID IT WILL NOT GET FIXED IN TIME AND I AM IN JEOPARDY OF LOSING THE HOUSE I’M BUYING THAT I WORKED SO HARD FOR! I HAVE SPENT MONIES IN INSPECTIONS AND MORE THAN LIKELY FINANCIALLY OF SOME SORT WITH ESCROW IF THE DEAL FALLS THRU THE CRACKS. I’M FRUSTRATED… I NEED HELP. MY VA LOAN WILL NOT GO THRU IF THIS MESS DOESN’T GET FIX IMMEDIATEKT. MY LENDER ASKED IF I HAVE 7K FOR A DOWN PAYMENT ON AN FHA LOAN BUT I DON’T.
I CERTAINLY DON’T HAVE THE MEANS TO HIRE AN ATTORNEY TO HELP MY SITUATION, IF I COULD I WOULD! ANY SENSE OR TWO I CAN GET I’D APPRECIATE IT!
GOD BLESS…JMI USMC
on Nov 7th, 2009 at 11:29 am
CONT…
MY GROSS INCOME IS $4700 AND I DON’T OWE A LOT MY MONTHLY BILL IS $250.00 THE REST IS FOR HOUSING AND NECESSITIES. MY CREDIT SCORE PRIOR TO THESE MESS WAS 636 AND IT WENT DOWN TO 565.UNBELIEEEEEEVABLE???????????
IF ANYONE CAN ASSIST ME WITH MY PROBLEM, I WILL PROVIDE MY PHONE OR EMAIL ME AT k.kelly1024@yahoo.com
thank you everyone