Ask Stacy: Help…My Credit History Disappeared!

While some people might prefer their credit history to disappear, those with a good history want to harness it when they’re ready to borrow. Check out this recent email…

Hi Stacy,

Thank you so much for taking time to read this email. I hope you may be able to provide me with some guidance on how to handle this situation.

Here is what occurred: My husband and I went to apply for a mortgage a month ago, only to find that my husband’s credit had merged with another man’s credit. While we were in the process of disputing all 25 debts, we found out that the man (who was merged with my husband) had received my husband’s credit report in the mail AND disputed my husband’s debt. Now, my husband’s real credit has been removed from Transunion! We are concerned that Transunion will report this to the other credit agencies as well.

Obviously, we are very upset about this- we have worked hard for many years to repair my husband’s credit and now this has happened. Any advice would be greatly appreciated!

Thank you,
Katherine

When I got this email I responded to Katherine and asked what, if any, response she’d gotten from TransUnion. Here’s what she wrote back…

Yes, we have been in almost constant phone contact with Transunion since we were made aware of the mixed file. We have kept good documentation of these conversations. We were told that since my husband’s credit has been deleted from the account there is nothing they can do about it– that we must contact each creditor ourselves in hopes that the current and past debt will get re-reported to their agency. I spoke with a Transunion supervisor today who assured me they would not report the deleted accounts to the other credit agencies.

As far as Equifax and Experian, we pulled my husband’s reports when we were made aware of the mixed file. Both Equifax and Experian did not have the mixed file information. They were reporting accurate information, thankfully. We have not checked recently to see if any of his credit has been removed.

Reading these emails enrages me. I’m sure Transunion would have a different take, but here’s mine.

TransUnion and the other credit reporting agencies, Experian and Equifax, run for-profit databanks that collect, store, and sell something that doesn’t really belong to them: our credit histories. They make hundreds of millions of dollars doing this, some of which they use to fund clever and deceptive commercials to try to rake in even more.

Fine. This is America, and we’re all entitled to make a living. But if your credit history is incorrectly collected, stored, disseminated, or in Katherine’s case, deleted, the potential cost in terms of higher interest, higher insurance bills, and lost job opportunities could be measured in the hundreds of thousands of dollars. Your credit history is precious, and should be handled accordingly. Your information should be totally accurate and handled with extreme care. If mistakes are made, they should be corrected immediately. If they’re not, the agency screwing up should be held liable for any damages that result.

But credit reporting agencies historically have apparently been much more interested in creating clever commercials than properly maintaining their records. One of many examples: In 2004, the Public Interest Research Group conducted a study that concluded that as many as 25 percent of credit reports “contained serious errors that could result in the denial of credit, such as false delinquencies or accounts that did not belong to the consumer.” The Federal Reserve later disputed that finding on page 6 of this report [PDF]. However, on page 26 of the same report, the Fed admits “we have investigated only some potential sources of error…we can say nothing about the consequences of mistakenly including account records that do not belong to an individual in the individual’s file.” This is exactly what happened to Katherine’s husband.

What should Katherine do?

Fortunately there’s a law on the books that should help Katherine – and you, should you find yourself in similar straits. It’s called The Fair Credit Reporting Act. Section 611 (it starts on page 46 of the law [PDF]) is called Procedure in case of disputed accuracy. Here’s the relevant language:

…if the completeness or accuracy of any item of information contained in a consumer’s file at a consumer reporting agency is disputed by the consumer and the consumer notifies the agency directly, or indirectly through a reseller, of such dispute, the agency shall, free of charge, conduct a reasonable reinvestigation to determine whether the disputed information is inaccurate and record the current status of the disputed information….before the end of the 30-day period beginning on the date on which the agency receives the notice of the dispute from the consumer…

Katherine’s husband found incorrect items (somebody else’s debts) in his credit report. He notified TransUnion that these were erroneous items, and they removed them. Unfortunately, however, they removed his entire credit history in the process – something that was almost certainly their error and thus should be corrected by them. How? By either reinstating the erroneously deleted information, or doing what they suggested Katherine do: going to each creditor they deleted and asking them to resubmit their historical information.

In short, rather than asking Katherine to do their work for them, the party that blew it should fix it. They should also apologize for the stress, time, and trouble they’ve caused Katherine and her husband.

Fortunately, since the other two primary reporting agencies haven’t made the same mistake, and other proof of her husband’s good credit thus exists elsewhere, the impact of TransUnion’s screw-up should be minimal. Still, Katherine should write a letter to TransUnion demanding satisfaction under Section 611 of the Fair Credit Reporting Act. She should send it certified with return receipt and it should include copies of any documentation that supports her assertion. If she doesn’t receive a timely response, she should proceed to the nearest consumer lawyer, since the Act also includes legal remedies for noncompliance, including punitive damages and reimbursement of attorney’s fees.

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