FACTA – How it changed the world!

In 2003 , Congress passed a law, the Fair and Accurate Credit Transactions Act, that enhanced consumer credit rights in a number of ways. FACTA made credit repair efforts much easier for consumers by ensuring that they had accurate information and also aimed to help those who had been victims of identity theft. It also enhanced your rights to medical privacy and provided ways to opt out of financial marketing. The law is broken down into a number of provisions, each of which can affect you:

Free Access to Credit Reports

Under FACTA, consumers have the right to access their credit reports from the three major bureaus once a year. The most convenient way to do this is to go to AnnualCreditReport.com, the website operated by Experian, Equifax and TransUnion in cooperation with the FTC.

Protection Against Identity Fraud

The identity fraud protections are broken down into several different parts, some of which are intended to prevent identity fraud, others of which are intended to help consumers recover if ID fraud occurs. Protections include:

  • Truncated credit and debit numbers. Merchants are only permitted to print 5 digits of a card number to protect against theft. Those who violate this rule can be assessed for damages that are anywhere from $100 to $1000 per offense.
  • Fraud alerts. If you report to the credit agencies that you are concerned that you have been or might soon become a victim of identity fraud, they must put a 90 day fraud alert on your accounts.
  • Red flag rules. Financial institutions must have policies that help them assess whether one of their customers has been the victim of identity theft. Rules include ones that help them tell the difference between genuine and fraudulent change of address requests.

Enhanced Medical Privacy

Health issues can be used to discriminate against people when they are job or house hunting. Under FACTA, medical creditor names and addresses cannot be included in reports sent to third parties unless they are coded. This way, the details of your medical history won’t be inadvertently revealed.

Opting Out of Marketing

Under FACTA, you have the right to restrict businesses from sharing your information with affiliates for marketing purposes. Once you opt out, that restriction is good for five years.

Your Right to Dispute Inaccuracies in Your Credit Report

When you are working toward a home purchase, inaccurate negative reports can keep you from getting the loan that you want. Under FACTA, you have the right to dispute inaccurate reports directly with the agency that supplied the information. When you, or a credit repair agency working on your behalf, make a written request for validation of a debt, the creditor must respond within 30 days if they feel that the debt is valid.

Being aware of your rights under the law can help enhance your financial health and increase your opportunities. With this knowledge, you can expand your employment prospects, spend less money on financial products ranging from mortgages to insurance and increase your family’s prosperity.

Click here to find out more on how FACTA changed the world.

History of the Big Three Credit Agencies – Education

As you embark on the credit repair process, you find that almost every decision made about your credit-worthiness leads back to one of three big credit reporting agencies. Ever wanted to learn more about these three companies that know so much about you? Meet the big three below:


Equifax is the oldest of the three big credit reporting agencies. The company was founded in 1899 as the Retail Credit Company in Atlanta, Georgia. By the 1960s, the Retail Credit Company had files on millions of Americans and Canadians and was one of the largest credit reporting agencies. Although their business has always included credit reporting, their largest business through the 1970s was accumulating data for insurance companies to assess risk. Their sweeping records of individuals’ financial and personal lives was the catalyst for the Fair Credit Reporting Act of 1970. In 1975, RCC changed its name to Equifax. The company has 7,000 employees in 14 countries and maintains files on over 400 million people worldwide.


TransUnion began its life as part of the railcar leasing company Union Tank Car Company. They began offering credit reporting services after acquiring Credit Bureau of Cook County in 1969. CBCC, at the time, maintained 3.6 million card files which were stored in 400 seven-drawer file cabinets. They became the first company to automate and computerize their data, leading to quicker access to consumers’ credit information.

Over the last decade, the company has found itself the focus of controversy for failing to remove erroneous data from their credit files. In two separate cases, plaintiffs were awarded significant settlements. The company has been owned by Advent International and Goldman Sachs Capital Partners since February of 2013.


Experian was formed when British retail company GUS plc bought credit reporting agency TRW Information Services from Bain Capitol in 1996. Over the next decade, they expanded into countries in Eastern Europe, Asia and Latin America.

While that era involved mostly business to business, they started offering credit monitoring to individual consumers in 2002 via their newly acquired ConsumerInfo.com site. They have since expanded to offer marketing, data gathering and consumer services throughout the world. They have been criticized for charging for credit reports on their site FreeCreditReport.com, as consumers are guaranteed free credit reports at the government mandated AnnualCreditReport.com. They also paid a large settlement to the FTC in 2010 for failing to adequately disclose the $79 fee associated with the credit monitoring services offered on ConsumerInfo.com.

While there are other credit reporting bureaus, these three are the ones that will have the greatest impact on your home purchase goals. What’s most notable is the controversies that each has faced at some point in each of their histories. By knowing the past of each bureau and educating yourself about your rights as a consumer, you can gain confidence in your abilities to strengthen your financial health. Arm yourself with information to empower yourself as you repair your credit and work toward your life and financial goals.

For more credit education and to request a free consultation click here.

FICO & Vantage Scores – Different Systems

Different Systems, Different Scores

Those three little digits that control so many of your financial opportunities. Your credit score can be pulled when you apply for a job, shop for insurance, during the home purchase process and in many other circumstances. But, it might surprise you to learn that there are actually a number of different agencies that create credit scores, and your scores will vary depending on which one is used. Some financial institutions even have their own internal credit scores that they use in place of independent ones.

Some of the most common credit scores used to determine your credit worthiness:


The FICO score is the one that people are most familiar with. It uses information from the three major credit bureaus to assign a three digit score that estimates credit risk. The score uses a number of weighted factors that include payment history, age of the accounts, ratio of available credit to debt, types of credit used and how recently you’ve searched for new credit. Your FICO score might vary depending on which credit bureau’s records are pulled to estimate your score.

Vantage Score

This credit score was created through a joint effort between Experian, Equifax and TransUnion. The advantage of the VantageScore is that your score is the the same no matter which credit bureau’s information is pulled to calculate it. The score can range from 501 to 990 and also comes with a letter grade. It has not been adopted by many creditors and is currently only used for about 6% of credit score pulls.

PLUS Score

This score was created by Experian to give consumers an easy to understand their credit health. It is not used by lenders; instead, it is intended as a consumer tool. The scoring range goes between 330 and 830, with a higher score indicating lower credit risk. Since this is not the score that creditors use when considering credit-worthiness, do not be surprised if your PLUS Score is different from the score that your bank says that you have.

TransUnion New Account Credit Score

This credit score is available for free from financial monitoring site Credit Karma. (As an aside: Credit Karma is a great resource for those undergoing credit repair. They allow you to check your credit score in real time and also to test what affect different actions will have using their credit score simulator.) The TransUnion New Account score is used by many lenders to decide how risky it is to extend credit to you. This score ranges from 300 to 850. It is based on information from TransUnion. It is made up of a number of factors that include the age of your accounts, our payment history and other factors.

Auto and Home Insurance Scores

These scores are used by the insurance industry to determine risk of a claim if you are insured by them. The results can affect the rates that you are extended when you shop for a policy. The scores range from 150 to 950. While the use credit scores for insurance is controversial, industry members defend the policy because of a correlation between credit scores and insurance risk.

31% of consumers now below 650 – Credit News

Here is an interesting chart that you can share with your clients if they are curious how their scores compare with the rest of the the consumers in US. Interestingly enough 40% of consumers in the US have above a 740 fico score (A+ credit). The figure that should scare us is that 31% (slightly below a third) of consumers are below 650? If you back out the unemployment rate from that figure (8% or so….) you will find that 22% of full time employees in this country are still not able to finance a home. Some would consider this a shame. Here at Key Credit we consider this an opportunity. Please do not hesitate to contact myself or any of my team members with a scenario or a request for a FREE consultation. Also feel free to request to be set up as a referring broker if you haven’t already.
Interesting stats to go along with this chart.
*40% of consumers are above 750 FICO (A+ credit)
*69% of consumers are above 650 FICO (bankable)
*31% of consumers are below 650 FICO (sub-prime)
*21% of consumers are below 600 FICO (non bankable)
31% of consumers now below 650