Credit Restoration – Using Section 609 of the FCRA to restore NOT repair credit
A simple, relatively unknown but proven legal strategy can be implemented to increase FICO scores from 60 to 120 points. In 1999, H. Bruce McInnis Jr. in Maine reviewed Section 609 of the Fair Credit Reporting Act (FCRA) and noticed something that, to his knowledge, no one had ever noticed before; 609(c)(2)(E): “A consumer reporting agency is not required to remove accurate derogatory information from a consumer’s file unless the information is out of date under section 605 or cannot be verified.”
If accurate derogatory information in the consumer’s file cannot be verified, the reporting agency must remove it. This law requires that every company that reports credit events, not just the original creditor companies, be able to produce verifiable proof of the negative event. Holds credit reporting agencies accountable for the negative information they report. This is obviously related to the right of debtors to challenge the accuracy of the negative facts that have been reported to them. The government’s intention was to protect debtors from inaccurate information being used against them.
The burden of proof does not fall entirely on the original creditors. All parties reporting this data are responsible for its accuracy. The companies that report credit events, in addition to the original creditors, are the credit bureaus; mainly Experian, Equifax and TransUnion. Did they keep verifiable records of people’s debts? Mr. McInnis began challenging credit reporting agencies to verify negative credit events on his clients’ credit reports by submitting a copy of the Original Creditor Documentation. He did not dispute the accuracy of these events, he merely used a legal strategy to question the credit bureaus’ ability to verify their accuracy. In effect, he used article 609 of the law to require the credit bureaus to justify their report. If they couldn’t verify the data, they had no right to continue to keep it on their credit reports. The credit bureaus began to comply. They removed the negative events from the credit records.
Credit reporting agencies do not keep records of original documents from credit applications and events. They do not have a signature on a Visa card application. They do not have a signature on a car loan application. They do not have a signature on a bankruptcy filing. All they have are electronic signals in their databases. They simply accept what the creditors have told them about the debtors. Although the debtor knows it is accurate, the credit bureaus do not. They cannot verify the accuracy of a single piece of data in their database.
Credit bureaus are regulated by the government due to the nature of their business, but it is important to understand that they are private companies. They are not legally or morally obligated to report anything about anyone. For example, most people know that most negative events stay on a credit report for seven years (ten years for Chapter 7 bankruptcies). This is not a legal requirement. In fact, they could remove all bankruptcies from all records tomorrow, if they so chose. The law simply does not allow them to report these events for more than seven (or ten) years. They are not required to report them at all.
Of course, it’s your business. That’s why they do it. But they do have a choice, and when forced to verify the data they report, they will choose to remove negative events. Essentially, credit restoration does not eliminate negative credit events. In fact, it makes them “invisible” to anyone looking at a credit report and this, of course, is reflected in the credit score.
