Your credit reports are typically obtained by the company servicing your mortgage loan if you apply for a Home Affordability Modification Program ( HAMP ). The credit report is used under HAMP mortgage modifications during the application process to verify your eligibility for the HAMP modification. The credit report is used to verify the borrower’s principal residence, ensuring that the loan relates to a mortgage on your principal residence.
HAMP Supplemental Directive 09-07 contains the requirement that the loan is one “secured by a one-to-four property, one unit of which is the borrower’s principal residence.” Supplemental Directive 10-01 tells servicers of loans to use a credit report to confirm that the property securing the mortgage is the borrower’s principal residence.
Therefore, if you are preparing to apply for a HAMP modification to your home mortgage, you may be well served by obtaining your consumer reports from Experian, Equifax and Trans Union beforehand to ensure that each consumer reporting agency accurately reflects your home as your primary residence. If the reports are inaccurate, you can send the credit reporting agencies disputes to correct the information. You can also obtain these reports from www.annualcreditreport.com, which you are entitled to a free annual credit report every 12 months from each credit reporting agency. Otherwise, you may have to pay a small fee to get your current credit reports. This may save you some time, work and headaches in trying to explain any discrepancy that arises after you make the application.
The Wisconsin Department of Financial Institutions warns about credit repair scams:
“In this type of scam, a company requests an up-front fee for which the company promises to "repair" the customer’s credit report. However, there is little, if anything, such a business can do to "repair" a customer’s poor credit track record. And by law, anyone may request a copy of their own credit report for a nominal fee which is usually far less than what these firms charge. Further, if someone has actually been denied credit, they are entitled to a free copy of their personal credit report.”
Be wary of anyone saying that they can fix your credit score or credit report even where the negative information is accurate and not too old or obsolete for reporting purposes.
Experian, one of the three national consumer reporting agencies that sells credit reports on consumers, and Standard and Poors, a world provider of financial data analysis, announced that on May 18, 2010, they will be publishing Consumer Credit Default Indices to be published over the internet. The indices are suppose to provide insight into consumer and business credit behavior across all obligations, secured and unsecured credit, helping to forecast future payment patterns on prepayments, delinquencies, chare-offs or defaults for non-agency residential mortgage-backed securities and other asset-backed securities. They will publish these indices on the 3rd Tuesday of each month based on data collected from the prior month. The data will come from Experian’s consumer credit database. S&P Chairman says that the indices will allow them to get a pulse on the current default profile of consumers and possibly serve as a leading indicated or the U.S. economy. The indices will be availabe at http://www.standardandpoors.com/indices.
As of April 22, 2010, the Trans Union website provides the following address and other information for adding a consumer statement to your consumer report:
To add or remove a consumer statement on your credit report, send your consumer statement or removal request along with your name, address, and TransUnion File Identification Number (FIN) on your credit report to:
TransUnion Consumer Relations
P. O. Box 2000
Chester, PA 19022
If you would like assistance in writing your consumer statement, please call us toll-free at 1-800-916-8800, Monday through Friday, 8:00 a.m. – 8:00 p.m. ET, excluding major holidays. If you are a resident of Hawaii or Alaska, representatives are available to assist you Monday through Friday, 8:30 a.m. – 4:30 p.m. in your local time zone, excluding major holidays. If you already have a copy of your TransUnion credit report, be sure to have your TransUnion File Number available when you call.
You should add a consumer statement to your consumer file after you submit a dispute over an entry on your reports that remains inaccurate after the consumer reporting agency ( credit reporting agency ) completes its re-investigation of your dispute.
As of February 24, 2010, Equifax’s website tells consumers to send a Consumer Statement regarding an entry in a consumer report, also referred to as a credit report, to the following address:
Equifax Consumers Services
PO Box 740256
Atlanta, Georgia. 30374-0256
The statement is suppose to be brief, explaining the nature of your dispute. A consumer reporting agency such as Equifax may summarize your statement if it is more than 100 words.
Sixty percent of employers now conduct credit checks on job applicants. Credit checks in hiring put job seekers in a Catch-22, in which they can’t pay their bills because they lost their jobs, but now they can’t get a job because they can’t pay their bills. Congressmen Steve Cohen (D-TN) and Luis Gutierrez (D-IL) recently introduced HR 3149, the Equal Employment for All Act, to restrict the use of credit checks in employment and put job seekers back to work. The bill will soon be heard in the House Financial Services Committee and needs the support of your elected officials. You can visit www.creditcatch22.org to learn more about the bill, and you can click on “Contact Your Legislators” to talk to your representatives in government about stopping this discriminatory practice.
If the class action settlement agreement in the White Class Action filed in the U.S. District Court for the Central District of California is approved, it will forclose claims against Trans Union, Equifax and Experian for reporting debt as outstanding when it was in fact discharged in bankruptcy. However, claims against the furnishers of debt information are still viable claims. For example, if a bank told one of the credit reporting agencies that its tradeline entry on your credit reports should say “charge off”, “$1000 Balance”, ”Past Due” or some other entry to indicate that the debt is still outstanding rather than discharged in bankruptcy, and the bank did so in response to a dispute that you filed with the credit reporting agency telling the agency that the debt was discharged in bankruptcy, then the bank may be in violation of the Fair Credit Reporting Act and your claim against the bank can proceed.
You need to submit disputes to the credit reporting agencies. I have some guidelines on my website for doing so, www.attorneyleech.com. Essentially, you need to notify the agencies that the information is inaccurate, explain why it is inaccurate and provide any documentation to support your position. While you can dispute items online, by phone or by mail, I highly encourage people to dispute in writing. The written document is more likely to have written support attached and then the nature of what you disputed is clear from the document. This process is not really “credit repair.” Credit repair usually has the connotation that you are trying to remove negative information that is accurate. If you have inaccuracies on your reports, you must dispute these directly with the credit reporting agencies. Do not rely only on disputes with anyone that reported or is still reporting the inaccurate information. If the inaccuracy continues after the dispute process, you may have claims against the credit reporting agencies or the furnishers of the inaccurate information.
Attorney Gordon Leech
Background Reports or Background Checks that are inaccurate can cost you your job. These reports are often governed by the Fair Credit Reporting Act as a consumer report. An employer must disclose or tell you in writing that it will obtain such a report and it must get your permission in writing and in advance of obtaining such a report. Your permission must be requested in a single document, not combined with an application. If the employer takes some adverse action, like firing you from your job or not hiring you, based on information in the background report, then it must also inform you of this fact in advance of taking the action, give you a copy of the report and an opportunity to correct any inaccuracies. When an employer jumps the gun and fires or fails to hire without the advance notice and opportunity to correct, the employer is likely in violation of your rights under federal law. Such violations carry the right to recover damages.