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Miami Debt Defense: What’s Allowed on Your Credit Report?


Credit reports have a huge influence on so many aspects of our lives – from our mortgage rate to our ability to secure a loan to various job prospects. So it’s important to understand how ratings are formulated, how to improve scores and how to correct mistakes (which are more common than you would think and can cost more than you might realize).

Details of what is allowable (and what isn’t) is found in 15 U.S. Code Section 1681c. The law states consumer reporting agencies can’t make a report that includes:

  • Cases that fall under the Bankruptcy Act or title 11 that date back more than 10 years.
  • Records of arrest or civil lawsuits or civil judgments that go back more than 7 years or beyond the governing statute of limitations expiration (whichever is longer).
  • Tax liens that have been paid and which date back more than seven years.
  • Accounts that have been placed for collection or charged to profit-and-loss that date back more than seven years.
  • Any other adverse information (other than a criminal conviction) that goes back more than seven years.
  • Name, phone number or address of any medical provider that has filed notification with the agency (with a few exceptions, including credit holder’s engaging in the business of insurance).

These rules are only applicable for someone who is seeking a loan or insurance in the amount of less than $150,000 or for a job that can reasonably be expected to pay less than $75,000.

The itemized list of things that have to be reported is much less detailed. It includes:

  • Making sure to note the type of bankruptcy (if bankruptcy is listed), and indicating whether consumer voluntarily withdrew the case prior to judgment;
  • Identify the key factor that negatively affected the score;
  • Note the voluntarily closure of an account by consumer;
  • Properly indicate any disputes raised by credit holder about information contained therein.

Most borrowers recognize that late payments are going to hurt their credit scores.

What many people don’t understand is how greatly their wallets may be impacted by erroneous reports on their credit. According to, someone with a stellar 780 FICO score prior to a mistake could see it slashed down to as low as 665 after negotiating a debt settlement on that error. A car loan that was once granted for a rate of 6.99 percent will suddenly be 9.69 percent. That would make the monthly car payment shoot up from $395 to $422 a month. Similarly, the mortgage rate would go from 4.875 percent to 5.575 percent – a difference between a mortgage of $1,058 a month and $1,167 a month.

When credit reports are wrong, our Miami debt defense attorneys know it’s usually because the report is incomplete or it contains information about someone else. It could be – and often is – as simple as a clerical error. A 2013 Federal Trade Commission report indicated 1 in 5 consumers have errors on their reports. And for 1 of every 20 consumers, the report indicated, those errors could result in the credit holder having to pay higher interest rates for things like insurance and car loans.

If you’re battling debt collection in Miami or the surrounding areas contact Jacobs Legal for a confidential appointment to discuss your rights. Call (305) 358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday at 5 p.m. on “Debt Warriors with Bruce Jacobs and Court Keeley,” discussing foreclosure topics that matter to YOU.

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