Have you ever applied for a credit card and they say “Thanks, but no thanks”? Or applied for a mortgage and find out that an old debt you paid is still affecting your credit report?
When things like this happen it can feel like other people have more control over your life than you do.
In 1970 Congress passed a law called the Fair Credit Reporting Act (FCRA) to put the power back in the hands of the consumer, back into your hands. It put protections and procedures in place to help you protect your credit report.
Keep reading to better understand your credit report and how to protect it.
What Is In Your Credit Report?
In order to understand how the FCRA protects you and how to utilize it, here is a quick reminder of what information is in your credit report.
Credit reports, also called consumer reports, contain information related to your credit history. It includes information such as accounts, payment history, or delinquent accounts. It’s important to note that your credit report can contain information that is public record such as judgments made against you, arrests, and bankruptcies as well.
Credit reporting agencies are businesses that compile credit reports. Equifax, TransUnion, and Experian are the three most well-known and used. These agencies gather and sell information about consumer’s credit history and use the information gathered to also compute a credit score.
There is a lot of personal information available in these reports and you need to know how to protect your information.
What Is the Fair Credit Reporting Act?
The FCRA is a law that regulates how a business or credit reporting agency can use the information contained in your credit report. It applies to credit reporting agencies as well as any business, employer, landlord, etc that might request the information.
The guidelines and policies put together in the FCRA are there for three purposes:
- To protect you from misinformation that could affect you
- To protect your right to privacy and
- To protect your right to have your credit history be both accurate and fair.
Credit reporting agencies have to use legal and fair methods to collect and distribute personal information. Businesses who request this information have to do so within the confines of the law.
Your rights as a consumer are also outlined in the FCRA.
You Have the Right to Your Own Information
Once a year, you can request a free copy of your credit report and your credit score from each credit bureau. Expect to pay for any reports outside of this scope.
Companies Must Inform You if They Use Information From Your File Against You
If information from your credit report is used against you, then the business or agency that did so must provide you with a letter stating the reason and where they received the information.
For example, if you are denied a credit card, then the credit card company will send you a letter with the reason they denied you and where they received the information.
Credit Reporting Agencies Are Required to Limit Access to Your Credit Report
Only those with a valid need can request access to your credit report. This is not limited to just companies you are seeking credit with. Landlords or anyone who would be in a position of risk regarding accepting payments from you can request a copy of your credit report.
Your Credit Report Will Only Be Released to an Employer With Your Written Consent
Current or potential employers must have your written permission to request a copy of your credit report.
You can Limit Pre-screened Offers, Place a Security Freeze, or Place a Fraud Alert at No Cost
You have more control over who accesses your personal information from your credit report than you realize. The Federal Trade Commission regulates the FCRA. There are protocols in place to allow you to opt out of those prescreened offers from credit card or insurance companies you get in the mail.
You can also place a security freeze on your account that will require written permission from you for anyone to access your report, not just employers.
Initial or extended fraud alerts can also be placed on your credit reports to protect you from identity fraud or to help you fight it if you are already a victim of identity theft.
You Have the Right to Dispute Inaccurate, Incomplete, or Unverifiable Information
You can correct the information on your credit report. Everything from fixing a misspelling of your name to disputing fraudulent accounts can be fixed.
In order to do this, you need to write a letter of dispute with all pertinent information and send it by certified mail to each credit reporting agency. The FCRA requires credit reporting agencies to make a note on your report that the item is being disputed and have 30-45 days to investigate and resolve the dispute.
Outdated, Negative Information Should be Withheld From Your Credit Report
There is a maximum amount of time that negative items can impact your credit report. For most items, the statute of limitations is seven years, though some bankruptcies are allowed to stay on file for ten years.
You Have the Right to Seek Damages From Violators
You are entitled to compensation if you have been a victim of identity theft or misuse of your credit report information. This can be a difficult and overwhelming task, but there are people out there who can help.
Professionals such as those at https://financialjusticenow.com/washington-fcra-litigation-lawyer/ can give you the financial help you need to fight to protect yourself and your credit.
The Fair Credit Reporting Act Protects You
Understanding the Fair Credit Reporting Act will help you monitor and protect your credit. Always remember that it is your information and you have to right to know what other people are seeing and make sure that it is accurate and fair.
Check out other posts on our site for more great information!