Kathleen G. Kane - Pennsylvania Office of Attorney General - Protecting Pennsylvanians

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Credit Report Scams

In addition to being concerned about identity theft and protecting your personal and financial information, it is also important for consumers to be wary of potential credit report scams. Scammers will often claim that they can remove outdated or inaccurate information in order to "fix" your bad credit reports. In some instances they will claim to be able to "erase" the information.

Should I pay someone to "fix" or "erase" my bad credit report?

  • Consumers may contact the credit bureau's themselves to correct mistakes or remove old information.
  • Consider why you should pay someone to "fix" something that you can fix yourself.
  • Check with the Attorney General's Office and the Better Business Bureau before paying anyone to work on your credit report.
  • Getting a new credit card to cover the debt on the current one is not going to make the situation any better. Keep in mind, a new card may have a "teaser" - a low initial interest rate, but an annual fee of $39 or more may apply. The card may provide a small authorized credit limit but a substantial amount of the available balance is appropriated by fees, leaving less than $100 to spend.

How long does information stay on my credit report? What can be removed?

  • Consumer debt information stays on credit reports for 7 years.
  • Bankruptcy information stays on credit reports for 10 years.
  • Accurate information cannot be removed from a report. Time is the only thing that will remove bad credit information.

What should consumers do to protect themselves?

  • Check your credit report regularly. Every year consumers can get free reports from all three major credit bureaus at www.annualcreditreport.com.
  • Look for outdated or inaccurate information.
  • Check for other problems, such as accounts that you never opened.  These may be a sign of identity theft.
  • Remember, if an offer seems "too good to be true," it probably is.
  • If you suspect you are a victim of a credit report scam file a complaint with the Attorney General's Bureau of Consumer Protection, 1-800-441-2555.

What are the three major credit bureaus that offer free credit reports?

Only by contacting these credit bureaus or www.annualcreditreport.com, the official site, can you obtain your free credit report. Other websites may claim to provide a free credit report or credit score, but be alert to the ploy requiring enrollment in a credit monitoring program. Remember, the Federal Trade Commission definesfree as without obligation. Be alert and read all of the terms and conditions.

Does viewing my credit report or credit score lower it?

According to www.myFICO.com, the Fair Isaac Corporation website, when a consumer obtains a credit report from an authorized credit report organization (Experian, Equifax, Trans Union, www.annualcreditreport.com, www.myFICO.com ) the consumer's credit score will not be affected.

Any permissible purpose inquiry by a business, or obtaining demographic "header" section information, or an inquiry by the consumer, does not affect the credit report. When a business updates the credit report with the on-time or delinquent credit history, that new information changes the report and can change the score to a higher or lower score to reflect the positive or negative status.

FICO, using internal codes, realizes when a consumer is shopping for credit, looking to purchase a car, or making inquiries on mortgage lender rates. If a consumer does this form of shopping with a 30 day window, the FICO model treats it as one inquiry rather than several requests for several mortgage loans, and subsequently it does not affect the credit for multiple taps.

What are the components that make up a credit score? 

The credit score called a FICO score stands for Fair Isaac and Company. The company calculates the proprietary score based on credit history and issues the credit score to potential creditors, employers, insurance companies, etc.

Each element is weighed on a 100% total. Payment history accounts for 35% of the score. Credit utilization, (or how much of the available credit has been used or are resources "maxed out?") is 30% of the total. The length of your credit history (years or months) is given 15%, and what type of recent credit you have obtained is given 10%. Finally, the mix of credit (mortgage, car loan, student loans, quantity of credit cards, or store cards) is weighed at 10%. FICO owns a proprietary scoring system using these percentages and ranking the results between 850 and less than 600.

A FICO score between 760 and 850 is considered Excellent; a score from 700 and 759 is Good; while Fair is 620 to 699, and Poor is less than 620. Other companies use a similar model but FICO is most common.

How can I improve my credit score?

The credit score is derived from the information contained in the credit report by Trans Union, Equifax, or Experian. Excessive inquiries to obtain additional credit cards or store cards can lower the score. Additionally, credit account delinquencies impede your profile. Delinquencies can turn into defaults which may be submitted to a collection agency or to a small claims court. These can lower your credit score.