Pros: On-line reports and disputes, concise and easy to read mailed reports
Cons: Printed on-line reports are incomplete, many FCRA violations
THIS Equifax review will leave many readers new to credit reporting with their heads spinning.
I apologize, but I can't simplify the many extremely complex aspects of credit reporting and credit scoring. That's for Congress and the FTC to do, and unfortunately they couldn't care less.
Throughout this review I am using these abbreviations:
FCRA = Fair Credit Reporting Act (I call it the Federal CRA Protection Act)
FTC = Federal Trade Commission - in charge of enforcing the FCRA and doing an awful job
CRA = Credit Reporting Agency - Equifax, Experian (fka TRW) and Trans Union
Your credit files contain your
1) personal data such as your birth date, aliases, current and previous addresses and employment
2) public records such as judgments, tax liens, notices of default and bankruptcies
3) credit data - your account details including payment history
4) inquiries (companies who got your credit report) for the previous 12 to 24 months
The credit bureaus ONLY report what's reported to them
1) by creditors and collection agencies who have accounts with the CRAs
2) by data services supplying public record data
3) by you if you successfully dispute reported data
A mortgage held by a private party (seller) can NOT be added to your credit file.
The snail mailed Equifax report
Equifax uses a much better format than Experian and Trans Union: concise and easy to read.
The on-line report PRINTED version is MISSING important data
It's nice to be able to order the $8.50 report on-line, review it for 30 days and dispute on-line. However, the report is incomplete.
The Equifax SAMPLE report looks like the printed report, loads fast and you can see what you get and what's MISSING at
https://www.econsumer.equifax.com/webapp/ConsumerProducts/ PageFrameServlet?payloadName=pgScorePowerCPSample.jsp (Remove the space after "Products/" - the URL was too long for Epinions.)
Americredit Financial Services 40404XXXX
JOINT ACCOUNT 03/1999 03/2000 Installment REPOSSESION $16933 $430 $9077 $128 2/2000
Prior Paying History
30 days past due 07 times; 60 days past due 05 times; 90+ days past due 03 times
INVOLUNTARY REPOSSESION AUTO
Problems with the PRINTED on-line Equifax report:
1) WHEN was that REPO?
2) WHEN were those lates?
3) Why is the Date of last Activity "03/2000" and the Date Reported is "02/2000?" How can you have activity AFTER the last reported date? A very typical example of bizarre credit reporting, right in their public sample report.
4) What TYPE of account is this? It could well be a FINANCE COMPANY account, lowering your credit scores. But it could also be reported as an auto loan. THAT information is not found on ANY report by any CRA, in violation of the FCRA.
5) Experian credit reports contain the 24 months account usage and limit history for each account. Does Equifax NOT provide this information to the companies that obtain your credit? I have no idea. According to the FCRA the consumer credit disclosure (your credit report) must be complete and contain ALL data.
WHY is the PRINTABLE version missing so much data?
Are they trying to minimize disputes?
You can't dispute what you don't know. The detailed account info is listed on a separate page for EACH account. You have to FIND it, LOAD it, PRINT it, FILE it .... try finding it again when you have to finally sue the creditor or Equifax a year or two later!
The Equifax Beacon Credit Score
You, your landlord, your employer, and possibly your mortgage underwriter or a credit consultant are just about the only people who look at your credit reports anymore.
Most creditors and many auto and home insurers determine your rates and fees according to your Fair Isaac credit scores.
The scores are BASED on the data in your credit file at the time the score is obtained. There are 53 "Risk Factor Reason Codes" for the Classic Fair Isaac scores (Beacon)such as "Lack of recent bank revolving information" and "Time since delinquency is too recent or unknown" and "Proportion of balances to credit limits is too high on bank revolving or other revolving accounts."
When someone tells you to close accounts you don't use ...
Do NOT follow that advice unless ALL THREE of your credit reports have been reviewed by someone with extensive credit scoring experience who concluded that you really have too many accounts.
I have seen many credit scores above 720 (very good) for clients with several hundred thousand dollars in available credit. Closing accounts will result in raising your balance/limit ratio and often drives already cash poor people straight into credit hell.
Fair Isaac is already working on the new NextGen scores (Pinnacle for Equifax) with even MORE codes such as "Too few accounts with balances." THAT code really says it all ...
As soon as ANY data in your file changes, such as a creditor updating your account with the new balance, your score changes too.
Even when NO data changes, your score can change 24 points from one day to the next.
Credit scores are calculated by SECRET formulas, so you can't calculate the score on your computer to see if their formula is working properly.
Credit scores are supposed to predict defaults based on statistics, but I am 100% sure that credit scores have CAUSED many defaults and are costing hard working Americans many millions of dollars in excessive interest and insurance payments.
The subsequent damages range from divorces to child abuse -- few people understand the devastating effect of financial problems on the mental health of working parents when they can't pay their bills unless they've been there.
It is extremely frustrating to have your interest rates and minimum payments double while you're working TWO jobs to ensure that ALL payments are ALWAYS made on time.
You can order a single Score Power package, your Equifax credit report with the Beacon Score, for $12.95. If you haven't seen your scores in a while and plan on a mortgage or auto loan soon, you should check your Beacon score.
1) Do NOT assume that your score will stay the same. I scanned and published the credit reports showing up to 24 point changes in just ONE day with NO changes on the reports.
2) Do NOT assume that your FICO (Experian) and Empirica (Trans Union) scores are similar to the Beacon score. I see 100 to 200 point differences routinely.
The data in the individual credit files varies greatly!
Unfortunately, those scores are NOT available to consumers. Both Experian and Trans Union are selling their own WORTHLESS credit scores.
The mortgage credit reports contain ONLY Fair Isaac's Beacon, Empirica and FICO scores.
The only way to get the Empirica and FICO scores is to apply for a mortgage with a broker/lender who will give you a copy of the report with the scores. And yes, that's perfectly legal. It WILL however result in additional INQUIRIES on your reports, most likely lowering your credit scores.
What to Dispute?
Most derogatory data such as late payments, repossessions, charge-offs, collections, paid tax liens and judgments can only be reported for 7 years.
Bankruptcies are reported for 10 years and UNPAID tax liens stay on forever.
NY: paid judgments are reported for 5 years from date filed and paid collections are reported for 5 years from the "Date of last Activity."
CA: tax liens are reported for 10 years from filing.
The Equifax FAQ has a lot of info at https://www.econsumer.equifax.com/webapp/ConsumerProducts/ PageFrameServlet?payloadName=pgFAQCredit.jsp#6, you can read that THERE. I'll write about what they do NOT tell you.
It is extremely important that you check the DATES for derogatory notations.
When there is NO date, the credit scoring software will probably substitute the last time the account was reported to Equifax.
A 30 day late payment last month can lower your score more than a charge-off 5 years ago.
I often see collection agencies like Inovision reporting OLD charge-offs as CURRENTLY open and delinquent accounts, in violation of the FCRA.
Just a few months ago I filed complaints about Inovision with the FTC and Equifax after my clients' unsuccessful dispute with Equifax. As usually, I got no response.
The Equifax phone reps insisted that Inovision was reporting correctly. My clients then paid that collection to get their mortgage (they didn't want to sue) and after a few more disputes it was removed - hopefully forever.
PAYING a collection or charge-off will NOT increase your BEACON credit score.
Just this week I saw Bank of America "redating" accounts. 1989 charge-offs that should have LONG been removed were reported as 1998 charge-offs AND verified by Bank of America after my client's dispute.
This is an attempt to effectively EXTORT payments after the statute of limitations expired and the debts became legally uncollectible. I sent my complaints to the NY and MS Attorneys General and to the FTC, but it's highly unlikely that anyone will care.
Also, don't miss the "account closed by creditor" notations, an often overlooked derogatory notation.
Consumer credit counseling and debt negotiating firms
I'm currently working with someone who made the mistake of PAYING his debts through consumer credit counseling instead of discharging the debts through bankruptcy. The "consumer credit counseling" notations are all over his Equifax report and are rated similar to bankruptcy.
The CCCS and most of the other "non profit" credit counseling organizations are funded by the credit industry to reduce bankruptcy filings.
My letters requesting assistance with clearing my clients' credit reports after they successfully completed the payment plans were never answered by any of the CCCS offices.
I also reviewed some of the debt negotiating firms' contracts. The fees were excessive. The small print was extensive and disclosed that the credit rating would probably be damaged.
"Settled" and similar notations are rated like charge-offs. It does NOT pay to pay.
Citibank and Capital One are among the creditors who often do NOT report your credit limit. One of the main factors for your credit scores is the "balance/limit ratio."
Because Fair Isaac hasn't released much info on how scores are calculated, I'm not sure how those accounts count and which figures are included in the scores. If you need to increase your scores, have your limit added to the report by sending a copy of your statement with the credit limit to Equifax IF your balance is usually below 25% of the limit. If you carry a higher balance, whether to have the limit added depends on the limits and balances reported on all three of your reports.
Accounts that are NOT yours.
Don't dispute those accounts if they increase your credit scores. If you have only a short credit history and/or few open accounts, I would NOT dispute your mom's account with many years of excellent payment history.
You might also find a current balance HIGHER than the "High credit," the most you ever owed.
I routinely see PAST DUE amounts for accounts with ZERO balances.
Equifax has absolutely NO error checking -- they report EVERYTHING as reported by the creditor, no matter how ridiculous.
It would NOT take much effort at all to FLAG inconsistencies and missing data.
We should NEVER see late payments or any derogatory payment history without a date.
There are MANY ways to DISPUTE inaccurate data.
The on-line disputes are very fast and work for many situations, but not all. It's especially nice that all you have to do is click on the appropriate check box, eliminating the need to compose disputes.
Snail mail disputes:
No special form or format is required. I always send a copy of the report with the disputed account HIGHLIGHTED and a brief notation with a blue or red MARKER such as "no lates" or "not my account" or "included in bankruptcy." In the case of an incorrect date, I highlight and/or circle the date and write the correct date next to it, same as with incorrect balances, etc. If there is NO date, I write "Add date or remove" next to the derogatory data.
I also NUMBER the disputed accounts if there's more than one. And for my clients I include a cover letter, with the numbered list and brief description such as:
"1) American Credit: no lates."
The cover letter is really NOT necessary, but it's nice to have a record of all disputes on one piece of paper.
Keep a copy of EVERYTHING you mail as well as every credit report and dispute result FOREVER.
I see a lot of people waste way too much time on composing dispute letters.
The Equifax employees couldn't care less about your spelling or grammar, nor do they want to read the reasons for your late payments or collections. According to Websters, ?repossesion? on Equifax?s sample report is spelled ?repossession.? So really, don?t sweat it, Equifax doesn?t care.
Keep disputes short and simple!
Common PROBLEMS with Disputes
Even with the marking, highlighting and numbering, the bureaus routinely just do NOT investigate some accounts.
The bureaus have 30 days to complete their investigation. If the creditor does NOT verify the disputed data, it has to be deleted. If it IS verified, they can refuse to reinvestigate subsequent "frivolous" disputes.
You can demand that Equifax provide you with details on the verification. I now include this phrase with my initial dispute letters:
"Should creditors VERIFY disputed data, please provide by WHO, WHEN and HOW the account was verified."
Many times creditors verify INCORRECT data.
You can then contact the creditor directly and demand account verification, or you can provide documentation proving YOUR version of events to Equifax.
People with legitimate unresolved disputes can also sue in Small Claims Court, going to "real" court is extremely expensive and takes years. I have read about excellent results through Small Claims, including removal of ALL correctly reported derogatory accounts as part of the settlement.
There are many different methods to correct credit data - including the letter to the LEGAL DEPARTMENT of the creditor - but that's well beyond the scope of this Equifax review.
Do NOT bother with that 100 word consumer dispute statement often recommended by "credit experts."
As per the FCRA you can have this statement added to your credit file. But, not only is it a complete and total waste of your time (credit scoring software doesn't read those statements) BUT it could actually hurt you. I've seen those statements on reports AFTER the derogatory data had dropped off.
What's a mortgage underwriter going to think about your explanation of a collection that isn't there? Talk about shooting yourself in the foot!
Most inquiries stay on your reports for two years. However, only inquiries during the previous 12 months lower your credit scores, unless deduped in Fair Isaac's credit scoring software or designated as by Equifax as:
"PRM - This is a promotional inquiry in which only your name and address were given to a credit grantor so you could be solicited you with an offer such as a credit card. (PRM inquiries remain on file for 12 months.)
AM or AR - These inquiries indicate a periodic review of your credit history by one of your creditors (AM and AR inquiries remain on file for 12 months.)
EQUIFAX, ACIS or UPDATE - These inquiries indicate Equifax's activity in response to your contact with us for either a copy of your credit file or a request for research.
PRM, AM, AR, INQ, EQUIFAX, ACIS and UPDATE inquiries do not show on credit files that businesses receive, only on copies provided to you."
WHY aren't they identifying the inquiries that DO count against you in a special section?
Why aren't they disclosing how inquiries are coded for credit scoring?
Under Fair Isaac's inquiry deduping system, all auto inquiries within a 14 day period are supposed to be counted as ONE inquiry. However, I believe that many auto inquiries aren't coded as such. Of course there's no way of knowing for sure, since that's another piece of credit data withheld from us by ALL CRAs.
At this time Equifax does not have an on-line option to dispute inquiries.
As per an FTC opinion letter, you can sue for $1,000 or your actual damages, whichever is greater, for inquiries without a permissible purpose.
The "Consent and Compliance" page you encounter prior to ordering the on-line report states:
... I certify that I am 18 years of age or older. I understand that it is illegal to obtain the Score Power service and the Other Services offered on a consumer other than myself. If I do so, I may be fined up to $5,000.00 or imprisoned up to two years, or both.
I can appoint YOU to sell my house, to withdraw cash from my bank account, to pay my bills ... but I can NOT authorize you to order my credit report. At the same time, the credit bureaus freely give out my credit report to any company that has an account with them -- WITHOUT my permission.
Why can I NOT hire someone to order my credit report?
I have been in Small Claims Court enough to know that Judge John Taylor won't give me a penny for MY time. He wants my cancelled checks or credit card statements as proof of expenses.
I'd be VERY happy to pay someone to handle my ongoing credit disputes and monitor my reports for accuracy. I'm VERY tired of working free of charge for Equifax and creditors, because THEY are violating the law.
Most people cannot identify ALL derogatory data and know nothing about credit scores. Credit scores determine your interest and insurance rates, cell phone and pager deposits, and even long distance phone service providers run your credit.
The times of "pay your bills on time and you'll have good credit" are long gone!
Kenneth Harney wrote in his Washington Post article how FICO scores jumped 200 points in 5 days with professional help: http://www.washingtonpost.com/wp-dyn/business/columns/realestate/ harneykennethr/A58924-2001Jul13.html (remove the space after "realestate/", the URL was too long for Epinions.)
Of course my clients often send me their Equifax login and password, but the CRAs are making it difficult for people without internet access to get their reports. The CRAs are NOT listed under ?c? for credit bureau in my Yellow Pages.
Equifax does a TERRIBLE job maintaining accurate credit files.
I have the documents to prove it too. The FTC does next to nothing to enforce the FCRA and they couldn't care less how many complaints I fax. An FTC supervisor told me that they will NOT release the number of complaints they receive about credit bureaus, not even if requested under the Freedom of Information Act.
The number of Equifax FTC complaints is classified data?????
I find that hard to believe, but I can?t recall ever having seen any specific numbers for CRA complaints. I?d greatly appreciate any info you might have.
At http://www.ftc.gov/opa/1995/9508/equifax2.htm you'll find the 1995 FTC consent agreement with Equifax Credit Information Services, Inc., "settling charges that it violated the Fair Credit Reporting Act (FCRA) by failing to assure the maximum possible accuracy of the consumer credit information."
"Specifically, when a consumer provides Equifax with documentation confirming the consumer's version of a dispute, Equifax is required to accept that version unless it has reason to doubt the authenticity of the document."
"The order requires Equifax to implement procedures to assure that no derogatory information which has been deleted after being disputed by the consumer reappears on the consumer's credit report unless (1) the information has been reverified, and (2) Equifax advises the consumer in writing that the information has been reinserted in the credit file. "
"When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $10,000."
Today I faxed my request for info about subsequent violations and fines to the FTC.
Denise Richardson's credit nightmare and continuing legal battle with Equifax
You can read an interview with Denise at http://www.bankrate.com/brm/news/special/19990820.asp
Denise already settled with Trans Union, Experian and Fleet. In a couple of weeks Denise will have her day in court with Equifax. Unfortunately, most of her claims against Equifax were recently dismissed, but we'll see what happens with the one remaining claim that Equifax breached its duties to maintain reasonable procedures and to reinvestigate under the FCRA.
From http://www.opensecrets.org/lobbyists/client.asp?id=7712&year=1999: Equifax Inc - Total Lobbying Expenditures 1999: $120,000
From the August 2, 2001 Equifax press release: "The company ranked in the top five in return on equity among Business Week's Best Performers for 2001. Equifax employs 6,600 in 13 countries and has $1.1 billion in revenue."
It's YOUR data they're selling and that makes it possible.
This lobbying expenditure is not much at all compared to their revenue, and of course does NOT include campaign contributions.
Denise and I can't change the FCRA alone. Legislators don't care what Denise and I think, they want the votes of the masses. That's YOU.
PLEASE go to http://www.congress.org and fax/e-mail this opinion or your own complaints to YOUR representatives.
General notes on ORDERING credit reports as of 8/2001:
You can order your credit reports on-line from all 3 bureaus, but Trans Union will only snail mail.
Credit reports are free if
- you live in Colorado, Georgia, Maryland, Massachusetts, New Jersey or Vermont: you are eligible for a free report once a year
- you were denied credit, insurance or other services based on THAT bureau's report
- you were charged higher rates and fees or deposits based on THAT bureau's report
- you certify in writing that you are unemployed and plan to seek employment in the next 60 days
- you certify in writing that you are a welfare recipient
- you certify in writing that you have been a victim of fraud
If you don't qualify for the free reports, the cost for bureau reports is $8.50 except:
California residents $8.00
Connecticut residents $5.00
Maine residents $2.00
Minnesota residents $3.00
Virgin Island residents $1.00
The credit bureaus often want you to provide them with your current employer, phone number and all kinds of info for resale and collectors. You do NOT have to provide this information. Send your name, social security number and current address, and payment if you're not qualified for the free report.
I have read numerous reports of credit report "resellers" (such as Qspace) selling outdated and incomplete reports, so I recommend ordering directly from the Equifax.
I do NOT recommend Equifax in this review and give it the lowest rating, just because I don't want anyone to get the idea that I LIKE Equifax's service. It's odd to have to decide whether to recommend a company like Equifax.
It's not a CHOICE to deal with Equifax, you have no options!
You HAVE to review ALL 3 of your credit reports and dispute inaccurate and incomplete data periodically IF you want credit and low cost insurance.
You need to check what EQUIFAX reports about you. If you don't qualify for free or discounted reports, it's well worth the $8.50 -- BUT the law should be changed to mandate FREE consumer disclosures.
I'm sorry this got so long, and there is so much more to say about credit reports, disputes, inquiries and of course credit scores.
Since URLs, products, prices, laws and credit reporting practices constantly change and because I don't know everything, I'll greatly appreciate your constructive comments so that I can update and edit this review to keep it current.
"The Truth is out there ... just follow the money"