Identity Fraud Reaches Record High Numbers

Identity fraud increased 16 percent in 2016 with a record 15.4 million Americans falling prey to one form of identity theft or another according to the new 2017 Identity Fraud Study from Javelin Strategy & Research. The total amount stolen in 2016 also increased to $16 billion dollars.

Card-not-present online fraud saw the biggest increase

The increases come mostly from online transactions also known as card-not-present fraud. In online card-not-present fraud there was 40 percent increase in thefts and out of pocket costs to the consumers were double the cost when compared to fraud involving point of sale transactions. Experts believe the spike in card-not-present online fraud is due largely to the new chip technologies which protect consumers more effectively during in-person purchases.

Account takeover fraud also increased

Account takeover fraud occurs when a thief hijacks an existing account. Account takeover frauds increased 61 percent in 2016 with victims paying an average of $263 which is five times higher than the average theft. The total amount lost in 2016 to account takeover fraud was approximately $2.3 billion dollars. There is no clear reason why account takeover fraud increased so dramatically but some experts believe the increase is the direct result of a lack of consumer oversight over their own accounts and the delays involved between purchases and billing statements being sent out which increases the amount of time before an account takeover theft can be detected. Unlike new account fraud, account takeover fraud cannot be detected by regularly reviewing your credit reports.

New account fraud

New account identity fraud also continues to plague American consumers and does not appear to be decreasing by any appreciable measure. In new account fraud identity thieves open new accounts in consumer’s names using information they either stole or purchased on the black market. Many of these new account theft cases go undiscovered for years until the consumer either learns of the theft through a review of their credit reports or when they are contacted by a debt collector seeking to collect the fraudulent debt.

Social networking fraud

The study also revealed that consumers who share their social life on digital platforms are at a much higher risk of account takeover fraud than consumers who are mostly offline or who are more private with their information. Social networks allow thieves access to contact information, information about friends and family, and updates on the daily lives of their victims. Some consumers even post travel plans online which allows identity thieves to add charges to an existing credit card or open a new account with less likelihood of being detected quickly.

The simple fact is that active social networkers are far more open about private information and are therefore more susceptible to fraud. The good news for social networking consumers is that, although they are more likely to be a victim of identity fraud, they are also likely to discover the theft more quickly than offline consumers.

Simplify identity fraud prevention

The average consumer does not need to hire a credit monitoring company or lock down their credit reports with credit freezes to prevent identity fraud. The most simple methods are often the most effective.

Start by using more discretion with providing information to strangers online. To be most effective, don’t share anything publicly. If you are going on vacation, just purchased a home, or have been shopping online recently, keep that information private. Identity thieves are masters of using information that seem harmless to access your accounts or open new accounts in your name. Don’t give them the chance.

Another proven method is to use a credit card for purchases rather than a debit card. That way, your losses are limited and theft can be detected more easily. Debit cards allow access to your entire account which can greatly increase any potential loss to identity fraud. If you insist on using a debit card rather that a credit card you can use multiple accounts to reduce your potential loss. Put a limited amount of money in the debit card account each week while keeping the bulk of your hard-earned money in a separate account. That way, the larger amount is protected and only the smaller account is at risk. Of course, nothing you do can prevent all forms of theft or identity fraud but diligent efforts will certainly reduce your risk and potential losses.

Utah Security Freeze Law

Utah credit report freeze law

Identity theft is an increasingly common occurrence in Utah. If you are a victim one important tool you have to protect you from future theft of your accounts is the security or credit freeze. The freeze can be quite effective in preventing the thief from opening new accounts in your name if you act quickly.

What is a credit or security freeze?

In Utah, a security freeze is a way to freeze access to your credit so it cannot be easily stolen. You place the freeze with the three credit reporting agencies; Experian, Equifax, and TransUnion. Once placed, it prevents creditors from opening new accounts in your name. Although the freeze enables consumers to prevent access to their credit files, it also allows the consumer to enable access to selected companies.

Security Freeze Fees

Credit reporting agencies generally charge a fee for placing, lifting, or removing a security freeze on your reports but if you include a copy of the police report or provide the police docket number that documents the identity fraud the fee will be waived. If you are not a victim of identity theft, the fees for placing, lifting, or removing a credit freeze average between $3 and $10 per bureau though in some states the fees are even higher.

Credit Scores

If you are worried about how a credit freeze affects your credit score, fear not. A credit freeze has no effect on your credit score because it is intended only to prevent identity thieves from establishing new credit in your name. For the same reason, a credit freeze will not prevent identity thieves from accessing your existing credit accounts either.

Prescreened Offers of Credit

A credit freeze also won’t stop prescreened offers for credit. If you wish to stop prescreened credit offers, you may do so online, by mail, or by telephone by calling 888-5OPTOUT (888-567-8688). Opting out of prescreened credit offers can be for either five years or can be done permanently at your discretion. Not all companies send offers based on prescreening so opting out will not stop all junk mail; though it will stop most.

Free Annual Credit Reports

A credit security freeze also doesn’t prevent you from ordering your free annual credit reports or keep you from opening a new account, applying for a job, renting an apartment, or buying an insurance policy. You might need to temporarily lift the freeze for these types of credit but doing so is easy and fast in most cases. It is best to plan ahead when applying for these kinds of credit however so there won’t be needless delays or unwarranted rejections.

How to place a security freeze

Requesting a security freeze must be done in writing either online or by certified mail and you must include proof of your identity with the request.

Once requested, the credit reporting agencies must place the security freeze within five business days. They must then send you written confirmation of the freeze within ten business days of placing the request. The confirmation must include a unique personal identification number or password you can use to release your credit information to selected companies. If you issue authorization to a company to access your reports, authorization is limited to a specific party for a specific amount of time.

The security freeze contact information for the three major credit bureaus is as follows:


Equifax Security Freeze

P.O. Box 105788 Atlanta, GA 30348 Telephone: 888-298-0045 [/callout] [callout]

Experian Security Freeze

P.O. Box 9554 Allen, TX 75013 Telephone: 888-397-3742 [/callout] [callout]

Trans Union Security Freeze

P.O. Box 6790 Fullerton, CA 92834-6790 Telephone: 888-909-8872 [/callout]

How to temporarily unlock a security freeze

If you need to temporary unlock the freeze, no problem. Just call or write to the credit bureaus. The freeze must be temporarily removed within three business days if requested by mail or within 15 minutes during regular business hours if requested by telephone or electronically. You may request a temporary lift for a specific credit grantor or for a specific period of time ranging anywhere from one day to one full year.

Differences between a security freeze and fraud alerts

A security freeze completely locks down or “freezes” your credit. Once in place, creditors may not access your credit to extend new credit. Credit freezes are also specific to individual credit bureaus so you can freeze one and leave another totally open.

Fraud alerts, on the other hand, are merely a cautionary flag to alert lenders they should take special precautions before extending credit in your name. Typically, that involves calling you to verify that you are the actual person requesting the credit. When you set the fraud alert, you give the credit bureaus your telephone number so they know they are calling you rather than an imposter. Finally, when you set a fraud alert with one credit agency it is required by law to contact the other two so a fraud alert spans all three agencies rather than staying with one specific bureau.

The time frames are also different in some circumstances. For example, an initial fraud alert lasts for only 90 days while a security freeze stays in place for seven years. You can place an extended fraud alert however, which will also last for seven years so the time differences are not significant.

Another difference is that anyone can request a freeze of their credit while fraud alerts are only available to consumers who are, or reasonably believe they may become, victims of identity theft.

Security freeze considerations

A security freeze is an excellent tool in the fight against identity theft but in some cases you may want to remain cautious before placing a security freeze. For some consumers, the burdens of locking and unlocking the freeze can grow tiresome over time. For example, you may want to open a store credit card at the point of purchase and with a credit freeze in place might be stopped from doing so. The same is true for other types of credit such as requesting cell phone service or even applying for a job.

Another consideration is the burden of figuring out which credit bureau to unlock for any given situation. In some cases, the credit grantor can tell you in advance which credit bureau to unfreeze but there could be a situation where you would have to unfreeze all three agencies to be sure you the credit grantor gets the access they need to assess your creditworthiness.

Ultimately, the decision will be yours to make but if you want to prevent identity thieves from opening new lines of credit in your name, a credit or security freeze is one of many tool at your disposal.

FICO Credit Score Guide: Understanding Your Rating Profile

Understanding your credit rating is critical to sound financial management. Your credit score is a direct reflection of how well you manage debt. It impacts interest rates, lending decisions, employment possibilities, and even whether or not you can obtain an insurance policy.

Five components used to calculate your FICO Score

FICO Scores are based on main five categories; payment history, amounts owed, length of credit history, types of credit in use, and new credit. The relative importance of each category may differ for consumers who have shorter credit histories but are generally weighted as follows:

Pie chart of factors that impact FICO credit scores

Payment History (35%)

Your payment history is the most important factor in calculating your credit score. Late payments, charge offs, foreclosures, repossessions, liens, wage attachments, and bankruptcies will all negatively impact your score at varying amounts depending on the severity of the issue. The score also considers how late a payment was, how much was owed, how recently the negative payment history occurred, and how many accounts are listed with a negative payment history. For example, a 60-day late payment two months ago will hurt your score more than a 90-day late payment from two years ago.

Amounts Owed (30%)

The amounts you owe is also a heavily-weighted factor in calculating your credit score. The score considers how much you owe on individual accounts and how much you owe in the aggregate compared to how much credit you have available. This factor is also known as the utilization ratio. As a rule of thumb, you should strive to keep the amounts you owe on credit cards and other revolving debt below 10% of the total amount available.

Length of Credit History (15%)

Typically, a longer credit history will increase your FICO Scores. However, even consumers who haven’t been using credit for very long may have high FICO Scores depending on their other credit score factors. Generally, your FICO Score considers the age of your oldest and newest accounts and the average age of all your accounts. Older is better. The score also considers how long it has been since you used certain accounts so it may lower your score to have unused accounts in your credit history.

Types of Credit in Use (10%)

Your mix of credit use is also considered in your score. A good mix would include credit cards, retail accounts, installment loans, finance accounts, and mortgage loans.

New Credit (10%)

The amount of newly opened credit accounts also figures into your score. Too many new accounts in too short a time period will generally lower your score. Especially if your history is relatively short.

Factors that are not used to calculate your FICO Score

FICO scores consider a broad range of information on your credit report but the following factors are not considered as part of your score:

  • Your race, color, religion, national origin, sex, or marital status
  • Your age (though other scoring methods do consider your age)
  • Your income, salary, occupation, title, employer, or employment history
  • Where you live
  • The interest rates being charged on your accounts
  • Child or family support obligations
  • Rental agreements
  • Whether or not you are participating in credit counseling
  • Soft inquiries such as consumer-initiated inquiries, promotional inquiries, and administrative inquiries
  • Employment and insurance inquiries
  • Any information not in your credit report

How long is bad credit report information reported?

How long is negative information reported?

Although the most typical reporting time period is seven years, different types of negative information can report for longer. Here are the reporting time periods in more detail:

Seven Years

  • Late payments
  • Charge-offs
  • Collections
  • Foreclosures
  • Judgments
  • Settlements
  • Repossessions
  • Delinquent child support obligations


Technically, under the Fair Credit Reporting Act, if your report is being accessed for a loan or life insurance policy of $150,000 or more or for employment purposes for a job paying more than $75,000, the typical reporting periods do not apply. For those purposes the information can report forever. Fortunately, the credit bureaus generally adhere to the typical seven to ten year guidelines even for those purposes.


  • Chapter 7 bankruptcy can report for up to ten years from the date the bankruptcy was filed.
  • A Chapter 13 bankruptcy can report for up to seven years from the date of discharge or up to ten years from the date the bankruptcy was filed.

Defaulted Student Loans

Defaulted student loans can report for up to seven years from the date they are paid, the date they were first reported, or the date on which the loan re-defaults. These time periods are governed by the Higher Education Act. Under the FCRA there is no limitation as to the time periods student loans can report on your credit.

Tax Liens

Unpaid tax liens can remain in your reports indefinitely. Released tax liens must be deleted after seven years from the date released.

Credit inquiries can lower FICO Scores

Credit Inquiries

Credit inquiries occur when someone pulls your credit report. Inquiries are maintained in your credit reports for between six months up to two years depending on the type of the inquiry. Some types of credit inquiries will lower your credit scores and others will not.

Hard Inquiries

With a few exceptions noted below, hard inquiries that occurred in the last twelve months are calculated as part of your score. Any hard inquiries older than twelve months can remain on your reports for up to another year but are not calculated as part of your credit score.

Generally, hard inquiries are those that occur as a result of your attempts to obtain new credit. Hard inquiries can also occur as a result of skip-tracing efforts by collection agencies. Types of hard inquiries include:

  • Credit card applications
  • Auto loan applications
  • Mortgage applications
  • Personal loan applications
  • Student loan applications
  • Collection agency skip-tracing

Soft Inquiries

Soft inquiries are not calculated as part of your credit score. Types of soft inquiries include:

  • Consumer-initiated inquiries of their own reports
  • Inquries for promotional or “pre-approved” offers
  • Administrative inquiries from lenders with whom you have an existing relationship

30 Day Safe Harbor Period

Inquiries for mortgages, auto loans, and student loans are not calculated as part of your credit score if they are less than 30 days old.

45 Day Rate Shopping Allowance

Mortgages, auto loans, and student loans also benefit from a 45 day rate shopping allowance period in which multiple inquiries for the same loan type are calculated as part of your credit score but are only counted as one inquiry.

This allowance encourages rate shopping by consumers by not penalizing them for multiple related inquiries. Revolving credit applications do not benefit from this rate shopping allowance.

Employment, Insurance, and Utility Inquiries

Inquiries for employment purposes, insurance purposes, or to obtain utility services are not calculated as part of your credit score.

Credit Score Calculation: Minimum Requirements

To calculate your FICO credit score, your credit report must contain enough information on which to calculate the score. At least some of that information must be recently reported for a calculation to occur.

Minimum requirements needed to calculate your FICO credit score:

  • At least one undisputed credit account that is at least six months old
  • At least one undisputed credit account that has been reported or updated in your credit report within the past six months
  • No indication on the credit report that you are deceased

Simple steps to increase FICO credit scores

Increasing your FICO credit score

Most consumers can increase their credit score by taking these simple steps:

  • Pay installment loans, mortgages, and revolving credit on time
  • Keep credit card balances low—preferably below 10% of the available credit
  • Avoid applying for new credit
  • Keep older credit accounts open and current with low balances
  • Review reports periodically and repair any errors

How to Dispute Errors in Your Credit Report

Woman writing a credit dispute letter

Credit report errors are far too common. Indeed, studies suggest that as many as 25 percent of credit reports could contain serious errors. The most common errors are identity errors, incorrect account information, and fraudulent accounts. There are certainly many other kinds of errors but these are the most prevalent.

Identity Errors

Identity errors occur when the credit bureaus or creditors inadvertently report someone else’s payment history, names, addresses, or other information on your credit reports. Mostly this happens when your name, Social Security Number, or address is similar to someone else. These identity errors are common among family members with the same or similar names.

Incorrect Account Details

Sometimes the lenders, creditors, and debt collectors provide incorrect information about your accounts to the credit bureaus. Other times, the credit bureaus incorrectly process the information provided. These errors could be seriously reducing your credit scores in some cases. For example, an incorrect credit limit or balance could impact your credit utilization ratio. Similarly, if a credit card or other account is showing the opening date incorrectly, the age of that account could lower your score unfairly. In more extreme cases, you could have a fully paid account showing as delinquent which would lower your score.

Fraudulent Accounts

Fraudulent accounts can be one of the most serious errors in your credit reports. These accounts can drastically impact your credit utilization ratio, average age of your accounts, and can trigger abusive or unfair debt collection actions against you. The emotional impact of identity theft also cannot be overstated. Victims of identity theft often suffer from serious emotional distress due to the invasion of privacy identity theft causes.

Steps to Dispute Credit Report Errors

Step 1. Order Your Free Credit Reports

The first step in disputing credit report errors is to obtain your credit reports. You can get your reports for free once every twelve months from each of the three major bureaus, Equifax, Experian and TransUnion. Be sure to check all three. Each bureau is independent and reports information differently. You cannot assume that an error in one report is also reporting inaccurately in the other two. Check each one to be sure.

You are also entitled to a free report if a company takes adverse action against you based on information in your report. For example, denying your application for credit, insurance, or employment would give you the right to a free report as long as you request this free report within 60 days of receiving notice of the action. The adverse action notice will give you the name, address, and phone number of the credit reporting company so you know which credit bureau reported the information.

If you are unemployed and plan to look for a job within 60 days, on welfare, or if your report is inaccurate because of fraud, including identity theft, you are also entitled to a free report.

Step 2. Dispute Credit Report Errors

The next step is to tell the credit bureaus, in writing, what information is reporting inaccurately, why you dispute the information, and what you want the credit bureau to do with the incorrect listing. Do not use a form letter from the Internet. Write your own letter or hire an experienced credit repair attorney to help you. Sample letters from the Internet are helpful to get you started but copying one directly could get your dispute rejected.

If you have documentation to show why the information is reporting inaccurately, include copies with your dispute. This would include copies of your identity theft affidavit, police reports, proof of your identity, proof of your residency, or an entire identity theft report if applicable to your situation. You may also want to include a copy of your report with the incorrect information highlighted to simplify the dispute process.

Be sure to send your dispute letter by certified mail with a “return receipt requested,” so you can document what the credit reporting company received and when they received it. Keep a detailed file including copies of your dispute letters, their enclosures, and any responses you get back from the credit bureaus.

Once the credit bureau receives your dispute, it must conduct an investigation within 30 days, called a “reinvestigation,” unless it deems your dispute to be frivolous. Then it can reject your dispute. Normally, the reinvestigation consists of the bureau contacting the provider of the information and either verifying, deleting, or updating the information as it deems appropriate. The credit bureau will then report the results of the reinvestigation back to you.

Generally, the credit reporting company will give you results in writing and include a free copy of your report if the dispute results in a change. This free report does not count as your annual free report. If an item is changed or deleted, the credit reporting company cannot put the disputed information back in your file unless the information provider verifies that it is accurate and complete. The credit reporting company also must send you written notice that includes the name, address, and phone number of the information provider.

If you ask, the credit reporting company must send notices of any corrections to anyone who received your report in the past six months. You can also have a corrected copy of your report sent to anyone who received a copy during the past two years for employment purposes.

If an investigation doesn’t resolve your dispute with the credit reporting company, you can ask that a short statement of the dispute be included in your file and in future reports. You also can ask the credit reporting company to provide your statement to anyone who received a copy of your report in the recent past but you can expect to pay a fee for this service.

Step 3. Dispute Errors Directly with the Information Provider

If the credit bureaus do not respond appropriately to your dispute, you should send a letter directly to the information provider. As before, do so in writing and send the letter certified mail with a return receipt requested. You should also include copies of important documentation to assist their investigation.

If the provider continues to report the item you disputed to a credit reporting company, it must let the credit reporting company know about your dispute. And if the provider finds your information to be inaccurate or incomplete, it must notify the credit reporting agency to either update or delete the item.


If your reports show credit lines that are inaccurate or items are reporting in your name that you did not open you should act immediately. The credit reporting companies and information providers should be responsive to your disputes. Start by obtaining copies of your reports and reviewing them for errors. Next, send dispute letters to the credit reporting agencies and, if needed, to the information providers. Provide them with appropriate documentation to help their reinvestigation efforts and don’t give up if your initial letters are unsuccessful. It sometimes takes multiple dispute attempts to get results. If you are a victim of identity theft, start your dispute efforts by putting a fraud alert on your reports and fill out an identity theft affidavit. Next file a police report and let the credit bureaus and information providers know the account is the result of identity theft. If necessary, hire an experienced identity recovery attorney to assist you. Repairing your credit can be a time-consuming and difficult process. The results of credit reports free from errors, are well worth the effort however. Good credit saves you money. Review your reports for errors and take control of your credit health and financial future.

Identity Theft Debt Collection

Identity theft debt repair
Identity theft debt collection causes millions of Americans undue financial and emotional hardship every year. Debt collectors can be ruthless in their efforts to collect debt and are often skeptical and unsympathetic when a consumer claims to be a victim of identity theft. Restoring your credit after your identity is stolen can take time, money, and effort but is not impossible if you are diligent and persistent. If you are a victim of identity theft, here are a few basic but critical steps you can take to repair your stolen credit.

Set Initial Fraud Alerts

Contact at least one major credit bureau (Experian, Equifax, or TransUnion) and set an initial fraud alert. The initial fraud alert is only good for 90 days but can stop identity theft from continuing while you take the next steps. You actually only need to contact one credit bureau as the credit bureaus are required to report the initial fraud alert to the other bureaus, but to be sure the initial fraud alert is set you may want to contact more than one bureau. It is free to set initial fraud alerts.

Pull Your Credit Reports

Once you have set the initial fraud alert, pull a copy of your credit reports. Identity theft victims can get the credit reports for free and it doesn’t hurt your credit score to pull your own credit report so don’t hesitate to pull it. There might be other identity theft debts on your reports so you need to check each of them before moving on to the next steps.

File an Identity Theft Report with the Police

Be sure to also quickly report the identity theft to the police and file a police report. Provide law enforcement as much information as possible and maintain a copy of your identity theft law enforcement report. The report should also contain the name of the officer that took the report and a case number. You will be expected to sign the identity theft report under oath and penalty of perjury so be sure all the information you provide is accurate or you could be held criminally responsible.

Complete an Identity Theft Affidavit

The FTC has an identity theft affidavit that most creditors and debt collectors will honor. Some require their own forms but if those forms request information different from the FTC identity theft affidavit, check with a credit attorney to be sure you don’t waive any rights by using that form. In most cases, the FTC identity theft affidavit is the appropriate form to use. Be sure to have the FTC identity theft affidavit notarized. Most creditors and debt collectors require notarization before they will accept it.

Dispute the Identity Theft Debt

Your next step is to dispute the identity theft debt in writing. Don’t just call the debt collector or creditor. You need a paper trail to show that you informed them the debt was the result of identity theft. Include a copy of your police report and FTC identity theft affidavit with your dispute letter. Once the debt collector or creditor knows the debt is the result of identity theft they must stop collecting it. If they do not, they will be in violation of several state and federal debt collection and credit reporting laws.

Dispute the Credit Listing of the Identity Theft Debt

Many debt collectors and creditors will report the identity theft debt to the credit bureaus. If so, the debt will usually lower your credit score unfairly. Debt that results from identity theft should not count against your credit score or factor into determining your creditworthiness. Send the major credit bureaus (Experian, Equifax, and TransUnion) a dispute letter explaining that the debt is the result of identity theft. Include a copy of your FTC identity theft affidavit and police report with your credit bureau dispute letters for best results.

Set Extended Fraud Alerts

Once you have your police report and FTC identity theft affidavit, you should contact the credit bureaus and set an extended fraud alert. The extended fraud alert is similar to the initial fraud alert but lasts for seven years so it provides you additional protection from identity theft for a longer period of time.

Pull Your Credit Reports

You should pull your credit reports periodically to be sure no other identity theft debts appear later. Even with the initial fraud alerts and extended fraud alerts, some identity theft can still occur, though it is relatively rare. Pull your credit reports every three to six months for at least the first year to be sure no other instances of identity theft have occurred. If you do find additional identity theft debt in these periodic reviews, you will have to walk through each of these steps again to repair your credit and stop the collections.


Identity theft debt can be stressful and difficult to repair but following these steps is an effective way to repair your credit and stop collections of the identity theft debt.

Credit Repair Dispute Mistakes

Many credit repair companies fail to understand even the most basic concepts of ethical and legitimate credit repair. For them, credit repair dispute mistakes are common. Unfortunately, even many of the industry leaders lack the knowledge required to ethically and competently repair credit on behalf of consumers.

Ordering Credit Reports

Ordering credit reports is an important component of credit repair. Obviously, without the reports a consumer cannot make an informed assessment of whether or not there is any inaccurate information to dispute. Unfortunately, however, the proper procedure for obtaining credit reports is often grossly misunderstood by many credit repair organizations. Indeed, some credit repair organizations are so ignorant as to the proper method for obtaining credit reports that they actually provide the reports to their clients or even create fake reports based on information provided from other credit bureaus.

The proper method for obtaining a consumer credit report is for the consumer to order the report by mail. The reasons for this are critical yet simple. First, ordering reports from the credit bureaus online requires consumers to waive their consumer rights by agreeing to mandatory arbitration. Doing so essentially precludes consumers from suing the credit bureaus no matter how egregious the legal violations or damages. Mandatory arbitration is the antithesis of true consumer advocacy.

Obtaining reports online from third party sources can sometimes avoid the issue of subjecting the consumer to mandatory arbitration against the credit bureaus but introduces inaccuracies in the reports if you use the wrong source. Indeed, it is common in the industry for third party providers to merge information from different credit reports and some even omit important information. For credit repair purposes, third party credit reports are inherently unreliable and virtually useless if fair credit litigation ever becomes necessary.

Credit Repair Dispute Letters

Credit repair dispute letters are a critical component of competent credit repair. Most credit repair organizations fail miserably in this regard. The reason is focus. Credit repair organizations focus more on repairing credit than in protecting the legal rights of consumers. Accordingly, they send out letters that fail to adequately preserve, and in many cases, actually waive, consumers’ rights.

In addition to waiving the legal rights of consumers, credit dispute letters from credit repair organizations also often misconstrue, misquote, or ignore the legal statutes and precedents that govern credit reporting. Sending a letter that demonstrates a failure to comprehend the law is a clear sign to the credit bureaus, creditors, and debt collectors that they should not take the dispute seriously. Why would they? If the consumer demonstrates a lack of understanding about the applicable legal concepts, that consumer is no real legal threat and can therefore be ignored. This is also another indicator that the credit repair organization is sending generic form letters rather than the well-researched competent authority used by true consumer advocacy attorneys.

Electronic Disputes

Some credit repair organizations actually forgo a written letter altogether choosing instead to send disputes electronically. This is a catastrophic error for several reasons. Primarily, sending the disputes electronically not only waives the consumers’ right to sue the credit bureaus but also often results in failing to provide the credit bureaus information critical to the credit dispute process. A well-written dispute letter should provide the credit bureaus with enough information to actually investigate the dispute. Unfortunately, however, electronic disputes often do not allow consumers to satisfactorily provide the essential details.

Electronic disputes also fail to provide the consumer with adequate proof of exactly what was disputed, when it was disputed, and on what grounds the information was disputed. Written letters avoid this problem altogether. And as any competent consumer advocacy attorney can tell you evidentiary issues are greatly simplified with a written letter as opposed to an electronic dispute.

Reasons for Dispute

Perhaps the most egregious problem with most credit repair organizations is a lack of understanding on what constitutes a proper dispute. For example, it is common for credit repair organizations to dispute certain trade lines on the grounds that the underlying account was supposed to be paid by a divorced spouse. Since divorce decrees are not binding on the credit bureaus, creditors, or debt collectors, arguing that someone else was supposed to pay a debt listed in your name is not, by itself, a proper basis for dispute. The same argument is often also incorrectly used to dispute medical trade lines on the basis that medical bills were supposed to be paid by an insurance company. Disputes formulated on similar misunderstandings of student loan laws, truth-in-lending regulations, the federal tax code, the Fair Debt Collection Practices Act, and the bankruptcy code are also commonly misused by credit repair organizations.

The problem with sending disputes of this nature is threefold. First, the unsupported dispute demonstrates to the credit bureaus a genuine lack of competence on the part of the credit repair organization. The response is typically for the credit bureaus to stall or ignore the dispute. Another problem is that the reason for the dispute is often false. In addition to potentially giving rise to criminal liability under state and federal laws, making any false representation to the credit bureaus is a violation of the Credit Repair Organizations Act (CROA) and can result in an award for substantial damages against the credit repair organization. The third issue that arises when disputing without proper legal support is that doing so can trigger a loss of legal claims and defenses the consumer may have if litigation ever occurs.


Unfortunately, incompetent credit repair organizations are the industry norm not the exception. If you need knowledgeable and ethical credit repair partner, a consumer protection attorney is your only reasonable choice. An ethical and competent credit repair lawyer will protect your interests, preserve your legal rights, and assert only those legal arguments that have merit; a credit repair organization usually won’t.

Credit Repair Dispute Letters

Well-written credit repair dispute letters are crucial to effectively repairing your credit. Here are some tips on how to write an effective credit repair dispute letter.

Form Credit Repair Dispute Letters

Traditional credit repair organizations typically send form letters to dispute credit information. Those form credit repair dispute letters are problematic for several reasons. First, because the credit bureaus get the same letter over and over again, the credit bureaus easily recognize form letters and respond by stalling the credit correction process and refusing to re-investigate challenges. Another problem with form credit repair dispute letters is that they are typically detrimental to any litigation that occurs as a result of the challenge. Many form letters acknowledge the debt or promise to pay the underlying debt even when the consumer does not actually owe the debt or has a legal defense to repayment of the debt. Such form credit repair dispute letters will fail to protect, and sometimes even completely waive, consumers’ rights. Without doubt, taking a form credit repair dispute letter into a lawsuit is one sure fire way to weaken your claim. Credit repair organizations typically don’t care about consumers’ rights but certainly the consumers themselves do. The simple fact is that if you want to preserve your rights do not send a form dispute letter.

Free Credit Repair Dispute Letters

Free credit repair letters consumers download from the Internet have the same issues as form disputes. The credit bureaus often recognize the letters and stall or ignore disputes, the letters are detrimental to litigation efforts, and the letters fail to preserve consumers’ rights. Free credit repair letters also leave consumers with a false expectation that credit repair is easy.

Credit Repair Dispute Letters for Litigation

One way to be sure your credit repair efforts are effective is to hire an experienced credit repair attorney. Only then can you be sure your dispute letters preserve your legal rights and set an appropriate stage for litigation if needed. Credit repair organizations do not sue and do not comprehend the intricacies of drafting litigation-ready credit repair dispute letters. Indeed, most credit repair organizations focus more on their marketing efforts and preventing consumers from suing them than they do on being effective consumer advocates. On the other hand, a good consumer protection attorney will always put your interests ahead of his own and he will have the legal training and experience necessary to protect your legal rights.

Do It Yourself Credit Repair

Do it yourself credit repair is another excellent way to protect your rights and achieve the desired results. It does take a little effort to carefully and correctly draft credit repair dispute letters but the results are well worth the effort. Just remember to be polite and truthful in your self-help letters for best results. It is also important that you do not acknowledge the debt, pay the debt, or promise to pay the debt since doing so can reset the statute of limitations to collect the debt or even result in waiving viable legal defenses to repayment of the debt. For best results always consult a consumer rights lawyer before taking any action to repair your own credit.


If you want to get the best results and preserve your rights, don’t use form disputes, free disputes, or a credit repair mill. Instead, hire an experienced credit repair attorney to help you dispute credit report errors. Only then can you be sure your letters are properly drafted in such a way as to preserve your legal rights and avoid the earmarks of a credit repair organization that will get your disputes stalled, ignored, or rejected. Attorney-drafted credit dispute letters will also provide you with litigation-ready letters; a must if you have damages due to a violation of the Fair Credit Reporting Act.

How to Choose a Credit Repair Company

60 Minutes Report: FTC Chairman on How to Choose a Credit Repair Company

In the above video, FTC Chairman Jon Leibowitz, offers consumers two tips for how to choose a credit repair company. The tips are generally pretty good but continue reading for a few of my own tips on how to choose a credit repair company or credit attorney.

FTC Recommendations

First of all, I agree with the FTC recommendations that if you hire a company for credit correction always look for two red flags to weed out many of the scams from legitimate credit repair. The first is to avoid a credit correction company that requires any payment before fully performing the services. Under the Credit Repair Organizations Act (CROA) it is illegal to accept payment before fully performing the services so you know if a company requires an upfront payment they are a scam. The second warning sign of a scam credit repair company is when the company guarantees they will get a specific result. Credit repair is uncertain. Even the creditors themselves occasionally have difficulty removing information that they reported so how could an independent company promise to do better? The simple fact is that no company can legitimately guarantee a specific result.

Required CROA Disclosures

In addition to these two tips from the FTC, consumers seeking to hire a credit repair company or credit attorney should also avoid any company that refuses to provide consumers with the legally required disclosure statements and cancellation forms. Under the Credit Repair Organizations Act (CROA) both are required and even attorneys are not exempt from the CROA requirements.

Credit Repair Company Registration

You should also avoid hiring a credit repair company if it is not properly registered and bonded in your state. Many states require credit repair companies to register but some states do not require attorneys to register as long as the credit repair services are an incidental part of their legal practice. Check your state consumer protection and corporations websites to determine what registration is required and whether or not the particular company has those registrations. If not, go elsewhere.


If you need to hire someone to help you repair your credit, do your homework on the companies you are considering and watch carefully for the warning signs listed above. The Internet is full of credit repair scams. Watch for the warning signs and don’t be a victim.

Utah Credit Repair Do It Yourself Tips

Consumers often ask me about the best way to dispute errors on their credit reports. Because some Utah credit repair organizations do not protect consumers’ rights, and in some cases actually waive those rights, I recommend consumers hire an experienced credit repair attorney to help. Ambitious consumers can also choose to do it yourself. Here are a few steps needed to repair your own credit.

Utah Credit Repair – Step One

The first step in do it yourself credit repair is to obtain and review your credit reports. There are several ways to order your credit reports but there are some cautions here. Don’t order a three-in-one report. Get individual reports from the individual credit bureaus and do so by mail if possible. Three-in-one reports merge information from each bureau into one report causing numerous discrepancies between the report you receive and the actual reports kept with each credit bureau.

You can get a free annual credit report through if mail is too slow for your situation but be cautioned that if there is any chance you will need to sue the credit bureaus, ordering the credit reports online will require you to waive your right to sue the credit bureaus by forcing you to agree to mandatory arbitration of your claims. Arbitration can be a bad idea from a consumer law perspective so if there is any chance at all you will need to sue the credit bureaus, preserve your legal rights and order your reports by mail.

Once you obtain your reports, closely review them for inaccuracies of any kind. Don’t fall into the trap of disputing everything that is negative regardless of accuracy. Ethical credit repair is about correcting inaccurate credit information, not deleting everything negative. If there are inaccuracies you should mark each one and make a quick note of why the information listed is inaccurate. If you have a listing that you are not sure is 100% accurate you certainly have the right to request the credit bureaus verify the data they are reporting so mark that information as an uncertainty for later use.

Utah Credit Repair – Step Two

Your next step in do it yourself credit repair is to create dispute letters challenging the accuracy and completeness of the information listed. This is where most consumers should seriously consider hiring an experienced credit repair attorney. In any event, do not use a form letter you find in the Internet. Instead, write each credit bureau and identify in the letter exactly what information is inaccurate and what you want the credit bureaus to do with the information. In some cases the credit bureaus will delete the information while in other cases they will update and correct it. In some cases the credit bureaus may either stall the process or ignore you altogether but be persistent and don’t get frustrated. If the bureaus stall you, ignore you, or refuse to process your dispute, then it is time to consult a credit repair attorney. The credit bureaus will usually be more responsive to an attorney drafted credit repair dispute letter.

Some consumer advocates will tell you to write credit dispute letters in a threatening tone to intimidate the credit bureaus into deleting your information. That advice is absolute garbage. The credit bureaus are not afraid of you or anything you can do. Threaten them, they don’t care. Sue them, they don’t care. In most small consumer lawsuits, the credit bureaus will win without batting an eye and frankly, even if they lose, they still don’t care. Instead, write the letter politely using plain and simple terms without legal jargon or threats. You will get better results that way.

One caution here is to always be truthful. Lying can get you into legal trouble and will certainly hurt any legal claims you may have against the credit bureaus, creditors, or debt collectors. Lying may also result in the bureaus ignoring or rejecting your disputes. It is always better to be truthful in these situations. The goal in legitimate credit repair is to correct inaccurate information, not to use deception to delete accurate information.

Utah Credit Repair – Step Three

The next step in do it yourself credit repair is to create challenge letters to send to your creditors who are reporting inaccurately. Only send this letter after you send a dispute for the same trade line to the credit bureaus. You want to preserve your right to sue the creditor for falsely reporting and under the Fair Credit Reporting Act (FCRA) you can only do so if you dispute the item with the credit bureaus first.

Challenge letters to your creditors are trickier that other letters. Like the credit bureau dispute letters you want to challenge the inaccurate information and you want to be truthful, but it is critical that you do not make any admissions in these letters. You are simply asking for a specific adjustment, correction, or deletion to occur. If you admit anything or otherwise acknowledge the debt you could reset the applicable statutes of limitations available to the creditors to collect the debt and the admission could be used against you to collect the debt.

This mistake is most commonly made by credit repair organizations and self-proclaimed credit repair experts in online forums and occurs when a credit repair organization sends letters to the creditors requesting so-called “goodwill” adjustments. In doing so, they invariably acknowledge the debt on behalf of the consumer and effectively waive the consumer’s legal rights. The easy way to avoid this issue is to never make any promises, admissions, or acknowledgments in your challenge letters.

Utah Credit Repair – Step Four

Your final step in the do it yourself credit repair process is to simply repeat steps two and three above as needed. Send additional dispute and challenge letters for each inaccurate trade line and carefully track your progress. Be certain you don’t send letters to the same company too often and wait a few months between disputes if possible; time may improve your results. Keep good records of each letter you send and each result you achieve. You may need to order additional credit reports after a few months but in some cases the credit bureaus will send automatic updates when they change information you dispute so be patient.

Utah Credit Repair – Conclusion

The FTC recommends consumers dispute credit bureau inaccuracies without hiring a Utah credit repair organization. In case where consumers are capable of drafting effective dispute letters on their own we agree. Most consumers need help however. Credit repair is filling with tricks, traps, and secrets that an experienced credit attorney can use to get better results.

Do it yourself credit repair can be tricky. To preserve your rights, it is best to order credit reports by mail and don’t admit to anything in your letters. It is also critical to always be truthful in your communications and keep good records. In any event, be patient and diligent and you should be able to get good results. If you have any reservations about do it yourself credit repair, read more of my articles on credit repair and contact us for assistance. We have over ten years of experience in credit repair and we can give you a good road map on how best to approach the credit repair process.

Do It Yourself Credit Repair

The FTC recommends do it yourself credit repair for many reasons. In some ways we agree but, in most cases, hiring a credit repair attorney may be a better solution.

Time and Cost of Do It Yourself Credit Repair

Consumers who engage in do it yourself credit repair may save a little money over consumers who hire credit repair attorneys or credit repair organizations but those savings are minimal at best. Learning the credit repair process takes a significant amount of time and effort, and time is money after all. The danger of do it yourself credit repair becomes apparent here as consumers can spend many hours learning to repair their credit on their own and will find a lot of misinformation about the process as they search. The best method is to consult an experienced credit repair attorney for proper advice. Many will consult for free and can be surprisingly affordable.

Effectiveness of Do It Yourself Credit Repair

Do it yourself credit repair can be somewhat effective but is generally less effective as hiring a credit repair attorney. Credit repair attorneys can cut through the garbage that consumers and less knowledgeable credit repair organizations can’t. For example, the credit bureaus stall and ignore consumers more often when dispute letters come from credit repair organizations. Yes, the credit bureaus can often determine who the letters came from. They take note of the postmark, signature, font, format of the letter, and other details that earmark the letter as originating from a credit repair organization rather than directly from the consumer or his lawyer. Dispute letters from credit repair organizations are frequently sidelined to be ignored or stalled and many do it yourself consumer letters are also stalled or ignored in many cases. In some cases the credit bureaus will request more information from the consumer in an attempt to delay the process and thwart the efforts of the credit repair organization. When properly drafted, attorney credit disputes get handled far more seriously.

Credit repair attorneys are also better at protecting consumers rights than consumers and credit repair organizations. Indeed, credit repair organizations are outright abysmal at protecting consumer rights. One glaring example is when credit repair organizations send letters admitting the consumer owes the debt or missed payments on the debt as a dispute tactic. This commonly used “goodwill” request is patently bad advice. A competent attorney would never advise consumers to admit or acknowledge the debt since doing so may reset the statute of limitations on which the creditor may collect the debt. Acknowledging the debt also constitutes an admission that can, and certainly will, be used against the consumer later if litigation ever ensues. Admitting the debt is a decidedly bad idea.


Do it yourself credit repair can be a good choice for some consumers, but for most, hiring an experienced credit repair attorney is almost always better. The costs of hiring a lawyer can be surprisingly affordable and the results are far more effective. The task of learning do it yourself credit repair may be too daunting for many consumers. If true for you, consult a credit repair attorney for advice and guidance. You may be surprised and how little it costs to get competent assistance from an experienced attorney.

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