Credit Report

Dear Liz: I co-signed a lease agreement for a friend in 2006. The friend flaked on the lease a few months later, so this debt is on my credit report. Everything I've read about credit reporting says it should fall off my credit report in seven years. But every few months the collection agency updates my credit report because they are adding interest onto the collection amount, which then updates the date of last activity as well. Does this restart the clock on how long the debt can be reported?

Pamela Johnson of Orange is one of many people who have recently received notices from a debt collector called West Bay Acquisitions over supposedly unreturned Hollywood Video DVDs. The video-rental chain's parent company, Hollywood Entertainment, was purchased by an outfit called Movie Gallery in 2005. Five years later, Movie Gallery went out of business, selling its portfolio of outstanding customer obligations to West Bay Acquisitions. Johnson, 68, said she was "dumbfounded" to receive a notice the other day saying she owes $24.43 for several DVDs that she rented from Hollywood Video in 2009 and never returned.

Question: I was recently hired to manage a rental property with 32 units. Given the current economic uncertainty, I want to review the financial records of the residents to decide which of them are financially stable and which can be expected to have trouble paying the rent. I want to be ready in case ownership decides to increase the rent to make up for reductions they were forced to offer in the last couple of years. I feel that running a credit report for each resident is the best way to check their ability to pay in the future, which is why we always obtain a credit report for rental applicants.

Dear Liz: I have a high-interest car loan (more than 10%) and just landed a part-time job to add to my full-time cash flow. I want to pay the car off as quickly as possible, but I have read and been told that paying a loan off early doesn't help scores as much as paying the duration of the loan. Is there truth to this? It seems foolish, though, since won't I be paying more interest? Answer: The primary concern with paying off a loan is that the lender may stop reporting the account to the credit bureaus.

Dear Liz: As part of our mortgage refinance, my wife and I were provided copies of our credit reports and scores by the credit union making our loan. Our scores are great, ranging from 777 to 819, but I was surprised to see in the negative remarks section a note that I had "too many inquiries." Reviewing the list I saw one business I recognized (a new brokerage account), one of our credit card issuers and four inquiries from CBC Innovis. What is CBC Innovis and how can I tell them to butt out of my credit history?

Highlights of the new law strengthening the Fair Credit Reporting Act: * Thirty-day deadline for fixing mistakes in credit reports, with consumer to be given written results within five days of investigation's completion. * New obligations for creditors--not just credit-reporting bureaus--to provide accurate information or correct errors. * No credit reports may be ordered by employers on job applicants without their written permission.

A unit of Santa Ana-based First American Financial Corp. has jumped into the growing market for online credit reports. First American Credco recently unveiled FASTCredit, which delivers a consumer credit report that includes information from the leading three credit bureaus. The product--offered via its Internet-based system at www.fastweb.firstam.com--is targeted at mortgage lenders, car lenders and other financial companies that are making credit decisions about borrowers.

Consumer credit reports remain riddled with errors despite regulatory sanctions and consumer lawsuits, an advocacy group contends. The U.S. Public Interest Research Group says its recent survey found that nearly 8 in 10 credit reports contained factual errors -- and about 1 in 4 contained errors so serious that they could result in the borrower being denied a loan. "The credit bureaus don't seem to be improving," said Ed Mierzwinski, the group's consumer program director.

Credit report giant Experian is acquiring Calabasas-based Mighty Net Inc., a far smaller rival in the business of selling consumers information about their files at the three large credit trackers — TransUnion, Equifax and Experian itself. Experian, based in Dublin, Ireland, is paying $207.5 million for Mighty Net, according to an Experian statement. Mighty Net charges about $15 a month to allow consumers to continuously monitor their files and credit scores.

The growing importance of credit scoring and the rise of potentially costly identity theft mean most consumers should review their official credit reports at least annually. Here's how to do it: 1. Purchase a copy of your credit report: All three major credit bureaus offer reports to consumers for about $8. Most West Coast lenders use Experian at (888) 397-3742; you can also order online at http://www.experian .com. The other bureaus are Trans Union at (800) 916-8800 or http://www .transunion.

Small-business owners will be greeted Jan. 1 with dozens of new laws and regulations. In California, they will include new mandates concerning employees, including a partial ban on checking the credit reports of workers and job applicants. And it's no surprise that there are changes at the federal level too. Here's a guide to some of the new laws and regulations set to go into effect in 2012. Federal taxes As of January, there will be a major decrease in how much of the total cost of new equipment - including items such as computers, machinery and vehicles - a business can deduct upfront on its tax return.

U.S. consumer debt fell during July through September, pushed down by declines in mortgage balances, the New York Federal Reserve said on Monday. The report showed households continuing to shed debt and dig out from losses following the collapse of housing markets and the 2007-2009 recession. Total consumer credit was 0.6 percent below its second quarter level, the New York Fed said in its quarterly Household Debt and Credit report. "The decline in outstanding consumer credit reveals that households continue to try and deleverage in the wake of a challenging economic environment and large declines in home values," said Andrew Haughwout, an economist in the New York Fed's research and statistics group.

Dear Liz: A large safe containing our passports, Social Security cards, birth certificates, checks and credit cards was stolen from our home several days ago. We notified our bank and credit card companies. Is there an advantage to requesting new Social Security numbers? If we do this, would it affect our credit in any way? Answer: New Social Security numbers wouldn't necessarily protect you from identity theft and could create additional complications. Thieves might still be able to use your old numbers to establish new accounts, and those fraudulent accounts could show up in your credit reports.

Many consumers applying for a mortgage are going to start sharing more personal information with lenders next year, like it or not. FICO scores, the industry standard for determining credit risk in mortgages backed by Fannie Mae, Freddie Mac and the Federal Housing Administration, largely have been based on a person's credit history. But in an attempt to develop a more well-rounded picture of a person's finances beyond credit, tools are being developed to help the lending industry dig deeper.

Dear Liz: I was recently solicited by a credit card company. I didn't need another credit card, but this offered airlines miles that I collect, so I applied. They didn't approve the application because: "You have filed for bankruptcy and your previous account(s) with us was included in that filing. This includes any of your accounts issued by (us) such as Visa, MasterCard, store cards or gas cards. " Liz, the bankruptcy was 12 years ago, and I am very well financially situated now. I thought there was an expiration date on bankruptcies appearing on your credit report.

Consumers who are denied credit or whose existing loan terms become less favorable soon will be able to get free credit scores under new rules from the Federal Reserve Board and Federal Trade Commission. As part of the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act, the two regulators issued final rules this week related to new credit-score disclosures. Effective July 21, if a credit score is used to set certain credit terms, or to deny or revoke credit or change existing terms, then banks and others will be required to disclose credit scores and related information to consumers.

Cleaning up your credit report is no easy task. The growing importance of credit scores and the rise in identity thefts, however, mean that reviewing--and, if necessary, fixing--credit files should be an annual ritual for most of us. For those with good credit, the chore is equivalent to checking your home's rain gutters before winter. You may face a little cleaning up, but it could help you avoid major damage. For those with poor credit, the assignment will be more onerous.

Congress moved closer Friday to approving legislation that would give consumers new tools for preventing identity theft while restricting the ability of states such as California to impose their own tougher provisions.

Dear Liz: About two years ago, I bought a new car but was lied to about how much it would cost. After a year I simply could not afford the car and could not refinance as I was incredibly upside-down. The auto lender wasn't willing to help, so I did a voluntary repossession. Nissan came after me for the balance remaining after auction but eventually wrote it off as a bad debt (this shows on my credit report). The debt has been sold twice to collection companies that call me on my cellphone and at work but don't leave messages.