Keeping Credit Card Companies in Check

Nearly 80% of Americans carry credit cards and about 44% of those individuals with credit cards carry credit balances.  On an annual basis, credit card companies have earned $15 billion in penalties for late fees alone!  (A New Era for Credit Cards)

President Obama attributes the practices of credit card companies to contributing to the down market economy.  While Obama expects American consumers to be responsible in paying their debt, he also expects credit card companies not to saddle already debt laden consumers with retroactive interest rate increases and other unfair credit practices.  Some of Obama’s sweeping legislation requires credit card companies: 1) to post their credit agreements online, 2) to provide 45-days advance notice if the credit card company plans to change its terms and conditions, 3) to standardize payment due dates rather than to shift payment dates to different dates each month, and 4) to apply excess payments to the highest interest rate balance first.  (White House Fact Sheet)

But, to keep the credit card companies in check, U.S. consumers will still need to proactively review their credit card records for accuracy and to (politely) challenge the credit card companies if there is a reporting error or a violation of the new White House reforms.

Americans are entitled, by law, to one free credit report per year from each of the three major credit reporting agencies: Equifax, TransUnion and Experion.  (Credit Reporting Rights)  After reviewing these reports, if there are inaccuracies, consumers have the legal right under the Fair Credit Reporting Act to dispute this information and to have it corrected, usually within 30-days. (A Summary of Your Credit Reporting Rights) Keeping your credit record accurate is important not just to obtain a mortgage or a short-term loan, but employers are also increasingly checking consumer records as part of their background screening process.  (Employers and Consumer Reports)

Even though U.S. consumers have these rights, some credit reporting agencies may be less than compliant. Always put your request for correcting reporting inaccuracies in writing, specifically identify the inaccuracy and provide verification of the reporting inaccuracy in your request for a reporting correction.  As a first step, write a demand letter.  Examples of demand letters can be found through Nolo press or through other on-line resources. (Credit Repair) When mailing a demand letter, send the letter by certified mail and keep a record of the delivery receipt so that there can be no denying that you’ve made an attempt to notify the credit reporting agency.  (7 Steps to Fixing Your Credit Report)

If these measures are ineffective, LegalMatch can help. Sometimes it is only with an attorney as your advocate that credit reporting inaccuracies can be more quickly resolved.  During the past five years, we’ve assisted nearly 2,000 consumers who have required the assistance of an attorney to correct inaccuracies in the credit reports and another 2,100 who have requested an attorney to assist them with other credit reporting issues.  It is obvious not just to our President, but to LegalMatch, that credit card companies and their reporting agencies need to be kept in check.