Correcting and protecting your credit record

Consumer Action’s newsletter releases credit reporting updates, tips for consumers

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With frequent news of massive data breaches, consumers often are plagued with a sense of data insecurity, not knowing when the next hack will hit or how to effectively protect their sensitive personal information.



In its latest issue of Consumer Action News (bit.ly/credit_reports_issue), Consumer Action explains the only way to prevent new account fraud, and updates consumers on improvements in reporting medical debt and resolving credit report errors.



Identity theft victims and those affected by a data breach often turn to costly credit monitoring services for protection, but Consumer Action cautions that the only way to prevent new accounts from being opened in your name is to place a security freeze on your credit file. After the Experian breach of 15 million T-Mobile customers’ data this fall, consumer groups, including Consumer Action, called on Experian to provide free security freezes to all affected. (See “A call for accountability for data breaches”.)

A security freeze puts a lock on your credit report, preventing access without your permission. Depending on what state you live in, security freezes may cost money to place, lift or remove. (For tips on freezing your credit files, see “Steps to set up a security freeze”.)



“With widespread data breaches being reported regularly, Consumer Action believes that all consumers should be able to place a security freeze on their credit files at no charge,” said Linda Sherry, Consumer Action’s director of national priorities.
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While a freeze is a consumer’s best tool to stop an identity thief, the process is not foolproof, nor is it always simple. Consumer Action recounts the story of one consumer whose journey to place a “free” security freeze on her credit report left her feeling mishandled one more time.  (See “Frozen out”.)



Steps toward correcting errors
If your credit file is damaged by theft or errors, you could pay a hefty price in the form of denied loans, credit, insurance or employment, or higher rates for the credit you do receive. Consumers have long complained about “sticky” credit report errors that remain unresolved. The Consumer Financial Protection Bureau (CFPB) now requires credit bureaus to forward consumers’ evidence of errors on to creditors to help settle disputes. Credit bureaus must also regularly report to the CFPB which companies have the most disputed errors and the dispute outcomes. (See “Correcting credit report errors just got easier”.)



Damaging medical debts will no longer appear on a consumer’s credit record before 180 days has passed to allow time for insurance claims to be processed and errors resolved. (See “Healthier policies for medical debt reporting”.)



Free credit scores are now widely available to credit cardholders via their billing statements, and to others who are willing to trade some personal information for access. (See “More consumers eligible for free credit scores”.)

“While Consumer Action applauds those companies that are providing free credit scores to customers, free scores should be available for all consumers, just as free credit reports are today,” said Sherry.



For information on your rights related to the use of credit reports when applying for a job or when you are delinquent on a debt, see the Winter 2015 issue of Consumer Action News, the organization's newsletter.

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Consumer Action has been a champion of underrepresented consumers nationwide since 1971. A non-profit 501(c)(3) organization, Consumer Action focuses on consumer education that empowers low- and moderate-income and limited-English-speaking consumers to financially prosper. It also advocates for consumers in the media and before lawmakers to advance consumer rights and promote industry-wide change.



By providing consumer education materials in multiple languages, a free national hotline, a comprehensive website (www.consumer-action.org) and annual surveys of financial and consumer services, Consumer Action helps consumers assert their rights in the marketplace and make financially savvy choices. Nearly 7,500 community and grassroots organizations benefit annually from its extensive outreach programs, training materials and support.

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