People take for granted the ability to apply for credit. It is not until the ability to obtain credit has been compromised that people realize how important maintaining good credit can be. The reasons for having a poor credit score or history can be the result of the consumer’s spending habits, or in some circumstances the consumer has maintained a healthy credit history but is the victim of identity theft.
Identity theft can prove devastating to a consumer. The identity thief can rack up credit card debt, fail to pay off the debt, and now the consumer is on the hook for a debt that they never authorized or used. Furthermore, this unauthorized use will still show up on a consumer’s credit report affecting the consumer’s score as well as his/her ability to apply for credit.
The Federal legislature has recognized the damage that an Identity thief could render to a consumer’s credit report. As such, there are laws enacted that allow a consumer to challenge and potentially remove information from a credit report that the consumer believes are the result of identity theft. The Fair Credit Reporting Act (‘FCRA”) requires that a credit reporting agency block any information that a consumer believes are the result of Identity Theft. In order to initiate a block with a consumer reporting agency a consumer must provide the agency with:
1) Proof of the consumer’s identity (such as a valid drivers license);
2) Copy of an Identity theft report (such as a police report);
3) Identification of the fraudulent accounts or information; and
4) A statement by the consumer explaining that the disputed accounts or information does not relate to any transaction performed by the consumer.
Once the credit reporting agency has received the dispute they must block the fraudulent information from the consumer’s report within four business days. It is important to note that there are circumstances in which a credit agency is justified in not blocking the information; if they have a reasonable basis for suspecting that the consumer’s dispute is in error, a lie, or that the consumer received goods or services as a result of the blocked transaction, then they can deny the block.
If you believe you are the victim of identity theft, you should draft a letter to the credit reporting agencies informing them that you believe that you are the victim of identity theft. You can take steps to correct your inaccurate credit report thanks to the FCRA.