Your Rights under the Fair Credit Reporting Act
Not many people have ever heard of The Fair Credit Reporting Act (FCRA). This federal law passed in 1970 ensures the fairness, accuracy, and complete privacy of the information hosted in credit bureau files. This law places mechanisms in place regarding how these credit reporting agencies can access, collect, use, and share the information collected on various consumer reports.
As technology improves, so has the way these organizations collect data. Today, a lot of companies are hungry for this data. Apart from the three big credit bureaus (Transunion, Experian, and Equifax), other organizations such as credit unions and banks can use the information they gather to determine whether or not you are eligible for a loan.
While some people don’t have any issues with their collected information, how it’s used should concern you a lot. Every time you apply for a car loan, credit card, mortgage loan, or something else, they check your credit history to determine how much of a financial risk you are and what terms are ideal given your report. It’s for this reason; everyone needs to know their rights under the Fair Credit Reporting Act. Here is a summary.
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Information on Your File Cannot Be Used Against You without Being Notified.
The law clearly states that anybody who uses a consumer or credit report to deny your application for employment, insurance, or credit must provide you with details on the agency that provided the report. This includes details such as the company name, phone number, and address if you want to take things up with them.
You Have the Right To Know What Information Is In Your File
If you expect to see the information about yourself a particular bureau has stored, it’s well within your rights to ask for a copy of your file. Before they pass you the information, however, you will need to confirm your identity, which in most cases will involve your Social Security Number. You don’t have to worry about being charged for this information since, in most cases, the disclosure is free. By law, you can get a free file disclosure if:
- Your identity has been stolen.
- You are relying on public assistance.
- Someone has taken steps against you because of the information on your file.
- The file has inaccurate information often as a result of fraud.
- You are out of work but expect to apply for a job within 60 days.
Getting a Credit Score Is Your Right
A credit score sums up your entire creditworthiness by assigning you a number. The law says it’s fully within your rights to ask for one, but it won’t be free. A credit score is crucial for certain dealings, such as residential real estate loans, among others. Sometimes, however, the mortgage lender may provide you with this information for free to help you make a more informed decision.
You Can Dispute Incomplete or Inaccurate Information
If you find out that the information on your file is either inaccurate or incomplete, it’s your right under the Fair Credit Reporting Act to dispute the information. After doing this, the agency must investigate and make the proper corrections if the dispute is not frivolous.
These Agencies Cannot Report On Old, Negative Information.
These agencies must not report negative information older than seven years old or information such as bankruptcies more than a decade old by law. This brings about a level of fairness to the industry, given that everyone has a past, and they can change.
Many states enforce these laws and also have their own reporting laws to protect their residents. You may also find that you have more rights under state law which is always a plus. By knowing your rights, you can take the necessary actions if need be, without worrying about being on the wrong side of the law.