Credit Bureaus or Credit Reporting Agencies collect consumers’ credit information and prepare a credit report which it summarizes the credit history of the consumer. They receive your data from your creditors called furnishers and sell the credit report to businesses including lenders, credit card companies, banks, insurance companies, landlords, and even your employers. The three major credit bureaus are Transunion, Experian, and Equifax.

They are authorized & registered under the New York Department of Financial Services (NYDFS).

These are the ways used by them to collect your data,

· When you apply for an account

· When an account is opened

· The amount loaned or the credit limit

· The account balance

· The status of your payments

· If your account is in collection

· Credit reporting companies also purchase public records like liens, bankruptcy filings, and court judgments from public records providers

The Federal law, Fair Credit Reporting Act governs the process of credit reporting in the The United States. It requires the fair and accurate transfer and storage of information by the furnishers and credit bureaus. It protects the information of the consumer and gives them other rights including disputing inaccurate data and receiving notices when an adverse action is taken against them. The law put the responsibility on the credit bureaus and the furnishers for providing fair, accurate, and timely information in credit reports.

Credit reports show your credit history and how you manage your debts. It lists down the following information to help determine your creditworthiness:

i. Personal Information: On the very top, the report contains your personal information which includes your full name, address, phone number, date of birth, and social security number.

ii. Credit Accounts: your credit and loan history with the banks and other lenders are shown in this section with detailed information about the accounts including the company name, the balance remaining if the account is closed, open, paid off or has missed payments, etc.

iii. Public Records: In the third section, it shows your public records including bankruptcies, tax liens, or court judgments. The report does not contain any criminal record of yours.

iv. Credit Inquiries: This section shows all the companies who have requested your credit report for inquiry. Every inquiry affects your credit score negatively.

Under the FCRA, the credit bureaus can only give your credit report to entities that have a valid reason under the Act to obtain the credit report. Creditors, insurance companies, banks, and landlords are allowed to have access to your credit report. Employers also can review your report before any decision however he has to seek your permission first.

Experian, TransUnion, and Equifax are the three major credit reporting agencies in the The United States collects your credit information and provides a credit report. Though they reveal similar information, sometimes there can be minor differences because not all the creditors report to all three credit bureaus.

The Fair Debt Collection Practices Act (FDCPA) is the federal law regulating debt collection practices by agencies. Under this law, the debt collecting agencies are refrained from adopting inappropriate tactics to retrieve the debts from the consumers. Illegal practices include harassing and abusing the debtor; calling repeatedly and at odd timings; contacting family and friends of the consumer; pretending to be a government agency; false or misleading representation; threatening to get the consumer arrested or any other unfair practice to intimidate the consumer into paying the debt. The Act put the civil liability on the entity that violates the law and requires debt collector agencies to adopt fair methods in collecting debts.

The FCRA provides a limit for how long a credit bureau can keep showing adverse information on your credit report. Your debts, late payments, and delinquencies stay on the report for no longer than seven years. after this period, your debts are to be automatically removed from the report by the credit bureaus. However, the bankruptcy continues to appear on the report for 10 years.

Credit reporting agencies under the law are required to provide you with a free copy of your credit report every year otherwise you can always request a copy of your report from any of the three credit bureaus – TransUnion, Experian, and Equifax. You can get a copy from each credit bureaus website or you can visit AnnualCreditReport.com and request a copy.

Debt settlement is one way to get out from under the burden of debts. If you are facing a financial downfall and can’t afford to pay the whole amount owed, then you would want to consider debt settlement. It is the act of negotiating with the creditor and offering him to pay the money owed in a lump sum in exchange for the unsecured debt being reduced or forgiven. Debt settlement works only for unsecured debts, which are not backed by any collateral, that includes credit cards, medical bills, etc.

Statutes of limitation are the laws that provide a certain time period during which the debtor can be legally sued by the lenders or the debt collection companies for non-payment of the debt. The time period varies according to different state law. Generally, the limit is 3 to 7 years or 10 years in some states. The statute of limitation in New York is three years. If a debt collector or lender sues you after the limit has expired, you have a defense that the debt is time-barred.

After seven years, when the debt has been removed from your credit report, you pay the partial amount of debt or acknowledge the debt to the creditor then it restarts the time period where you can be sued and the debt is no longer time-barred. It also starts to appear on your credit report and can be harmful to the credit history of the borrower.

Yes, you still owe a debt to the collector. Although, they cannot sue you however they can attempt to retrieve their debt in accordance with the law.

Your credit score is based on your credit history. Whether you pay your loan on time, what amount you owe, what kind of debt you owe, whether you have filed for bankruptcy, and how often you take loans are the pieces of information that affect your credit score either positively or negatively. When you are not regular with your loan payments and have high credit card bills, delinquencies, missed payments, foreclosures, too many inquiries, etc., your credit score goes down. And this can have a bad impact on your daily life.

Lenders and companies check your credit score to decide whether to allow you a loan, sell you a house, give you a job, etc. Some businesses also decide the interest rate based on your credit score. Therefore, you have to keep your credit score up and pay your debts on time.