Keeping a Watchful Eye on Your Credit Report - Schillberg Law
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Keeping a Watchful Eye on Your Credit Report

02 May Keeping a Watchful Eye on Your Credit Report

In response to the rapidly increasing growth of identity theft, the three major credit bureaus (Equifax, Experian and TransUnion) have recently allowed consumers the right to cut off all access to their credit files.  In theory, once your credit report has been “frozen” with each of the three credit reporting bureaus, it will be virtually impossible for anyone – including YOU — to get access to your credit report and use that as a basis for obtaining credit fraudulently.  That certainly appears to be an excellent idea for most consumers, but is this right for you?  There are certain considerations you must take into account before taking this step to further protect your credit.

Generally speaking, all that is required is for you to send a written request, with proof of ID, to each of the three credit reporting bureaus in order for a “freeze” to be fully effective.  When one considers that the bureaus can charge up to $10 each to place a freeze in effect and that the freeze will stay in place permanently, that may be a cost-effective way to protect your credit, even less expensive than a monthly credit reporting service.  However, be aware that once your account is frozen, you, too, are unable to get credit approval, thereby requiring you to contact each of the bureaus to temporarily “unfreeze” your files when you want or need credit, which may take time and, moreover, may cost you another $10 to unfreeze each of your accounts.

There are other ways, however, to protect your credit report without having to take the drastic step of freezing your file.  You can arrange for a credit reporting service to contact you by e-mail to advise if there is any inquiry or negative activity on your file.  Alternatively, you can contact the credit bureaus and place a 90 day fraud alert on your file, which will tell lenders that they should take extra steps to verify the identification of the person seeking credit.  Unfortunately, these alerts only last 90 days and must be renewed every three months.  One should at least take the basic steps of reviewing your credit report regularly to check for any unauthorized activity.  Since federal law allows you to a request a free credit report from each of the three bureaus every year, you can stagger your request for a free credit report from one of the three credit bureaus every four months.

If, while reviewing your credit report, you do note a discrepancy or other error, you must write to each of the bureaus to request that they correct the error immediately.  Under the Fair Credit Reporting Act, credit bureaus are required to correct inaccurate information once you make them aware of the error.  In order to request a correction or to dispute an error, send a letter to the credit reporting bureaus, which will trigger an investigation and the bureau will initiate an inquiry with the creditor.  If the creditor cannot confirm the disputed information as being correct, the credit bureau is required to remove the information.

Since recent studies have shown that up to 25% of credit reports have such mistakes that are serious enough to cause a denial of credit, it is important for you to vigilantly confirm the accuracy of your credit bureau report on a regular basis.

Robert Schillberg

ROBERT F. SCHILLBERG, JR., is an attorney licensed in New Jersey and New York, with an office in Red Bank, New Jersey, practicing primarily in the areas of business and corporate law, civil litigation, municipal court, and residential/commercial real estate.

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