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THE TRUTH IS IN THE TRANSPARENCY
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We Understand You Have Options
CMA Financial Corporation believes that anybody can make a well-informed decision
when provided with enough information to consider his or her options. You have made
it to our website and we understand in our industry there are cheaper credit repair
companies available to you. When judging the worthiness of a company to deliver
to you the services which are promised, it is important to be able to evaluate the
overall knowledge which a credit repair company truly has about the Fair Credit
Reporting Act (FCRA) formal consumer dispute process. Some credit repair companies
are nothing more than incorporated sales forces which deliver vague promises in
order to close a sale that is then outsourced to a third-party company for client
processing. CMA Financial Corporation is well versed in the credit dispute process.
We perform every aspect of your customized credit service in-house. This page is
designed to give you a truthful overview of the credit reporting industry so you
can properly set your expectations as to the results that are achievable with credit
repair and the methods which are required to get you there. We are so confident
in our knowledge of consumer credit protection laws that we welcome you to use this
page as a guide to interview other credit repair companies before you make your
final decision.
Credit Reporting Industry Overview
The consumer credit reporting industry is not only a highly profitable industry
but also a huge industry. Credit bureaus provide business marketing solutions to
organizations that have a permissible purpose to review your creditworthiness such
as a mortgage company and a car dealership. A credit bureau makes part of its profit
by charging a business like a mortgage company or car dealership each time a credit
report is prepared by the credit bureau for the business. Consumers with lower credit
scores generally must shop more in order to obtain the financing needed which results
in more credit reports being prepared and sold by a credit bureau to a business.
Since 1972, the annual sales within the credit reporting industry have increased
at twice the rate as the growth of the U.S. economy. [Robert M. Hunt, What’s in
the File? The Economics and Law of Consumer Credit Bureaus, Bus. Rev. Q2 17, 18
(2002)] The current value of the credit reporting industry is around $2.8 billion
in annual sales.
Fair Crdit Reporting Act Overview
The Fair Credit Reporting Act was drafted by Congress to “prevent consumers from
being unjustly damaged because of inaccurate or arbitrary information in the credit
report” [Equifax, Inc. v. Federal Trade Commission, 678 F.2d 1047, 1048 (11th Cir.
1982)]. The FCRA does not put any restrictions on the reporting of information on
a credit report that is not an adverse item of information. The FCRA does, however,
restrict the reporting of an outdated, inaccurate, unverifiable, and potentially
misleading adverse item of information. It is the term “adverse item of information”
which makes the FCRA an incredibly powerful legal consumer credit protection tool
when effectively used. The term “adverse item of information” is not specifically
defined under the FCRA but one interpretation provided by the Federal Trade Commission
has been to perceive an adverse item of information as any “information which may
have, or may reasonably be expected to have, an unfavorable bearing on a consumer’s
eligibility or qualifications for credit, insurance, employment, or other benefit,
including information which may result, or which may be reasonably expected to result,
in a denial of or increased cost for such benefits.” [In re Miller, 335 B.R. 335
(Bankr. E.D. Pa. 2005)(quoting Equifax, Inc. v. Federal Trade Commission, 678 F.2d
1047, 1050 (11th Cir. 1982), which in turn cited the FTC’s Final Order to Cease
and Desist issued Dec. 15, 1980)]
Fair Crdit Reporting Act Credit Bureau Liability
The FCRA does not impose a general specific liability on a credit bureau for simply
reporting inaccurate information. The FCRA does, however, define two distinct accuracy
requirements which impose liability on a credit bureau under certain situations
which involve the reporting of an inaccurate adverse item of information. A consumer
like you who attempts to repair his or her own credit by any means other than the
specific two credit bureau liability channels may end up with a response from the
credit bureau stating the dispute is being disregarded as either frivolous or irrelevant
[15 U.S.C. § 1681i(a)(3)]. The reason for this is because unless the specific FCRA
dispute channels are adhered to, the credit bureau has no FCRA liability for not
reinvestigating your dispute and, as such, does not reinvestigate your dispute.
Duty to Prepare Credit Report Only With Permissable
Purpose
The first FCRA credit bureau liability requirement is that a credit bureau prepares
a credit report only to a person who has permissible purpose to get the credit report.
Permissible purpose includes a creditor who has a signed credit application, an
insurance company, an apartment application, etc.
Duty to Prepare an Accurate Credit Report
The first FCRA credit bureau liability requirement is that a credit bureau use reasonable
procedures each time it prepares a credit report to ensure maximum possible accuracy
of the information concerning the individual about whom the credit report relates.
[15 U.S.C. § 1681e(b)]
Duty to Conduct a Proper Dispute Reinvestigation
The second FCRA credit bureau liability requirement is that each time a consumer
formally disputes the completeness or accuracy of an adverse item of information
with the credit bureau, it must either immediately delete the disputed information
within the first three days of receiving a dispute [15 U.S.C. § 1681i(a)(8)] or
properly conduct a reinvestigation of the disputed information directly with the
furnisher. [15 U.S.C. § 1681i(a)(1)]
FCRA Prohibition on Reporting Beyond 7 Years
In addition to the FCRA’s liability requirements on a credit bureau for reporting
an inaccurate, unverifiable, and potentially misleading adverse item of information,
the FCRA also prohibits the reporting of almost all obsolete or outdated adverse
items of information which are older than seven years. [15 U.S.C. § 1681c(a)] However,
the FCRA provides for an additional 180-day extension for the reporting of any delinquent
account which is placed for collection, charged to profit and loss, or subjected
to any similar action, upon the expiration of a specific 180-day period. This 180-day
period begins on the date of first delinquency which immediately preceded the collection
activity, charge to profit and loss, or similar action. What this means is that
immediately upon the date of first delinquency, a furnisher has 180 days to charge
off or move from profit to loss the adverse item of information. The 7 year retention
clock starts not from the date of first delinquency, but rather from the date of
charge off or move from profit to loss which enables an “adverse item of information”
to legally be reported for 7.5 years.
Credit Bureau Reinvestigation and Furnisher Investigation
A credit bureau has a formal requirement to reinvestigate its records and forward
the disputed adverse item of information to the furnisher [15 U.S.C. § 1681i(a)(2)]
which automatically triggers the furnisher’s requirement to investigate its internal
records of the adverse item of information [15 U.S.C. § 1681s-2(b)]. The formal
FCRA dispute process is known as a reinvestigation when referring to the credit
bureau because it is assumed that the information was thoroughly investigated by
the credit bureau before it was originally placed on the credit report. The formal
FCRA dispute process is known as an investigation when referring to the furnisher.
Fair Credit Reporting Act Furnisher Liability
Any furnisher of information to a credit bureau which provides a public address
which a consumer can use to directly dispute information is under no FCRA liability
to initially provide accurate information to a credit bureau. A furnisher is only
liable under two distinct formal FCRA requirements.
Duty to Update Inaccurate Information
The first FCRA furnisher liability lies in the furnisher’s duty to update and correct
any incomplete or inaccurate adverse item of information. This liability is initiated
only once a credit bureau forwards to the furnisher all relevant information pertaining
to the dispute. [15 U.S.C. § 1681s-2(a)(2)] The furnisher is then obligated to investigate
the subject of the dispute and by reviewing all relevant information. [15 U.S.C.
§ 1681s-2(b)] Upon a furnisher’s completion of its investigation, if the furnisher
determines that the adverse item of information in question is not complete or accurate,
the furnisher must promptly notify the credit bureau of that determination and provide
to the credit bureau any corrections to that information, or any additional information,
that is necessary to make the information provided by the furnisher to the credit
bureau complete and accurate. The furnisher also must no longer furnish to the credit
bureau any of the information that remains not complete or accurate. The credit
bureau has little or no FCRA obligation to question the accuracy of the furnisher’s
investigation results as long as the credit bureau originally forwarded all relevant
information contained in the dispute to the furnisher for review. Upon completion
of the investigation, a furnisher which verifies the accuracy of the adverse item
of information to the credit bureau has the effect of then placing the burden of
proof onto the customer to prove that the furnisher’s verification was erroneous
and inaccurate. Having proof that the furnisher’s verification was erroneous and
inaccurate will trigger the second FCRA furnisher liability.
Prohibition on Reporting Erroneous Information
The second FCRA furnisher liability is a prohibition on reporting information to
a credit bureau after notice and confirmation of an error. The furnisher is strictly
prohibited from furnishing information to any credit bureau if not only the furnisher
has been notified by the consumer that specific information is inaccurate but also
the information is, in fact, inaccurate. [15 U.S.C. § 1681s-2(a)(1)(B)] The consumer
must use consumer protection laws to invalidate certain aspects of the underlying
adverse item of information in order to successfully perform this step. The resulting
credit report should be the most legally accurate credit report possible.
Your Responsibility to Settle Your Debts
Once you have achieved the most legally accurate credit report possible, there is
still one final step in order to achieve the cleanest credit report possible – paying
down any remaining negative item of information which includes any accounts reporting
as a charge off or moved from profit to loss to a $0 balance each. Creditors are
generally required to charge a debt off after 180 days of non-payment; however,
they have until the expiration of your state’s statute-of-limitations to try and
collect the debt. This gives you the opportunity to have a payoff settlement negotiated
with the creditor which can legally satisfy the debt and improve your credit. Since
the age of a charged off or moved from profit to loss account is determined is determined
by the date of first account delinquency [15 U.S.C. § 1681c(a) and (c)], any subsequent
settlement or repayment plans are not legally supposed to re-age the account. The
FCRA Compliance Date/Date of Last Activity date is not literally the date of last
activity on the account. The Credit Reporting Resource Guide states that the date
of the first delinquency of the debt that is being collected sets this date. This
is true regardless of whether the debt was sold to subsequent entities. When a buyer
of a bad debt purchases an account, the original owner should zero out the “current
balance” field and inform the purchaser of the debt the date the account first became
delinquent. The date is also unaffected by subsequent repayment arrangements. [Associated
Credit Bureau, Credit Reporting Resources Guide 10-4 (2000) (Metro Manual.)]
The “CMA Difference”
We understand that investing in something that you don’t fully understand is a strong
move. This is why we want you to understand the overview of credit industry. It
is crucial that our business relationship a partnership between both parties. We
can’t ask you to pay for a service if we do not perform it, and likewise, you can’t
help us perform a service if you don’t understand what you have hired us to do.