The Law is on Your Side

Many consumers have the mistaken idea that credit bureaus are federally supported organizations backed by a vast array of laws meant to protect creditors. Nothing could be further from the truth. Aside from the government simply recognizing the need for credit reporting, credit bureaus have absolutely nothing to do with the government. Credit bureaus are simply huge bureaucratic companies which exist for the soul purpose of making money by selling information about you-information they never bothered to verify.

Because of the vast potential for error in the credit reporting system, the United States Congress has enacted laws to protect the consumer from being victimized by the credit bureaus. It is your right and responsibility to make use of these laws.

The Law versus Practical Reality

As the credit bureaus computerized their processes and greatly expanded their reach and influence in the late 1960s and early 1970s, consumer complaints began to mount at the FTC and state attorney general offices. The credit reporting agencies quickly became huge bureaucracies second only in size to the federal government. The credit bureaus expressly served only the needs of their clients, the credit grantors. Many consumers were negatively affected by the credit bureaus, but they had no way to correct or change their credit information.

The American consumer lay completely at the mercy of the credit bureaus. The United States Congress enacted the Fair Credit Reporting Act (FCRA) in 1971 to insure that the credit bureaus investigate the credit items disputed by consumers. This federal law set procedural guidelines, which gave the consumer the right to challenge the accuracy, validity, and verifiability of the credit listings appearing in their consumer credit report. It also required that the credit bureau delete any credit listing if it was inaccurate or could not be verified. Learn More.

In theory, the FCRA charges the credit bureaus with responsibility to the consumer as well as the credit grantor. In reality, the credit bureaus resist, resent, and reject consumer disputes. The credit bureaus would rather be left alone to make a profit. And, each time a consumer challenges his credit, profit is lost.

The credit bureaus first defend their profits by erecting walls of stall tactics, including requests for more information, further clarification, and additional identification. The vast majority of consumers give up before they even receive copies of their credit reports. If a consumer manages to get a credit report, decipher the codified information, write a coherent dispute, and mail it, the bureaus may still find some reason to disregard the challenge. The entire dispute system is designed to frustrate and discourage the consumer.

Many consumers have the idea that the credit bureaus must complete their investigation within thirty days or be forced to remove all disputed information. They threaten to sue the credit bureaus if they don't conclude their investigation in time. In practice, such thinking is delusional. Nobody forces the credit bureaus to do anything. However, if you manage to submit a valid dispute letter, and the credit bureau investigates your dispute, the chances of success are good.

If a credit bureau cannot verify an item before completing its investigation, that item will be removed. Many creditor grantors are simply reluctant to take the time to verify the data. While the credit bureaus are in the business of reporting credit histories, creditor grantors are not. Click Here.

Lexington Law is the trusted leader in credit repair. Having served over 200,000 clients since 1991, they have the experience necessary to make credit repair work for you. The lawyers of Lexington Law will fight to remove negative items from your credit reports, so you can improve your credit score, and start living life without limitations. more Along with outstanding 24/7 client support, their service includes unlimited disputes and deletions. Lexington will not rest until you are satisfied with your credit report results. more "My experience with the Lexington Law Firm has been wonderful from beginning to end and the results you achieved are remarkable. It is also noteworthy, that the fee I paid for such superior professional service must be one of the truly great bargains of all time. My warmest best wishes to you all." — R.S., Lexington client "Thank you for all the wonderful work your staff has done on my behalf. The creditors that I wanted removed are no longer there... I couldn't have done it without you, nor would I ever want to. You and your staff are truly professionals and I bow to you." — C.F., Lexington client

(CBS) When CBS News first met Mark Cowen seven years ago he was a victim of identity theft, fighting to get back his good name and good credit.

Today, as CBS News Correspondent Bill Whitaker reports, Cowen says the new law allowing consumers like him free access to their credit reports would have saved him a lot of time and money. "I wish it would have happened a few years ago, because I know there are hundreds of thousands, if not millions, of us that have been yelling about this," says Cowen. The program, starting Wednesday in 13 Western states and rolling out across the country over the next 10 months, requires the three big credit companies -- Equifax, Experian and TransUnion -- to give consumers their credit reports once a year at no charge.

It's designed to combat the growing identity theft crisis, now striking more than 10 million consumers a year. "Looking at your credit file is a very good hedge against identity theft, you can see if there is anything unusual, can detect entries that may look odd to you," says Don Girard of Experian, one of the big three companies.

Consumer advocates say it's about time - a good first step but no solution. "It will give you a heads up if something is wrong, but just knowing that the crime is happening won't stop it," says Douglas Heller of the Foundation for Taxpayer & Consumer Rights. "We have to clamp down on banks that are trading our private information like pork bellies."

As for Cowen, seven years later he's still trying to clear the mess off his credit reports. "Sadly a lot of the information that is fraudulent is still there and it takes a while for it to get swept off my report," says Cowen.

As the saying goes: There's no free lunch. And the same might be said of credit reports. Watch now for the big three credit companies to give free reports with one hand while pushing costly, new identity protection services with the other.