The Fair Credit Reporting Act (FCRA) is a federal law that was passed by Congress in 1970. This law was passed to protect you and other consumers. Below are the 5 most important credit repair tips and rights the Fair Credit Reporting Act provides you.
1. What Information Can Be Contained On Your Credit Report
The FCRA says that any subjective information such as your race, and religion can not be contained on your credit report. Prior to the Fair Credit Reporting Act, it was legal for there to be all sorts of irrelevant and subjective information on your credit report.
Equifax one of the largest credit bureaus, used to conduct business under the name of the “Retail Credit Company.” During this time they would employee “welcome ladies” to physically go and visit new homeowners. During this visit the welcome ladies would observe and report subjective information to the credit bureau such as your:
- Family members smelling of alcohol
- Stable employment
- Along with other subjective information
This information was compiled into a report and sent back to the credit bureau. The credit bureau would then include this information on your credit report. The idea was that if you were of a certain religion, you would be less credit worthy. Thankfully, this is no longer legal information to be on your credit report.
2. Access To Your Credit Reports
In part due to the FCRA and an amendment called the Fair and Accurate Credit Transaction Act (FACTA). You are entitled to one free credit report from each of the three credit bureaus annually. In the past you were only allowed your credit report, if you were denied when applying for new credit.
3. Who Can View Your Credit Report
The Fair Credit Reporting Act regulates if a lender or creditor can view your credit reports. In other words, you must give permission or in legal terminology “permissible purpose” to any lender or creditor before they can legally check your credit report. You may see this on your credit report as a credit inquiry.
If a lender does not have your permission or permissible purpose to view your credit report and do so anyway, then they are liable for a $1,000 fine. This fine is directly payable to the you the consumer.
Individuals, have filed and won civil lawsuits in small claims courts against lenders for illegally checking their credit report without their permission. If this happens to you, you can file a civil lawsuit and potentially be awarded $1,000.
4. Regulations On The Maximum Amount Of Time Information Can Remain On Your Credit Report
The Fair Credit Reporting Act creates a maximum amount of time a credit item can remain on your credit reports. Generally the maximum time is seven years. The exception is if you have a bankruptcy or bankruptcy related items. This information can remain on your credit report for 10 years.
An important point to note, is that there is no minimum amount of time an item must remain on your credit report. The truth is that lenders, creditors, and collection agencies are not required to report any information about you to the credit bureaus.
5. How The Credit Bureaus Handle Consumer Credit Report Disputes
The FCRA regulates how the credit bureaus respond to consumer credit report disputes. If you file a credit dispute the credit bureaus are required to initiate a “reinvestigation.” The idea is that there was an original investigation before an item was placed on your credit report.
This reinvestigation must be completed within a reasonable amount of time, which is usually 30 days. Once the investigation is completed, the credit bureau must notify you of the action taken.
The credit bureaus must notify you if the item was verified, modified, or deleted from your credit report. Additionally the credit bureaus can find your dispute frivolous. This essentially means that you are not serious about your dispute. And the credit bureaus have ignored your request.
If you happen to receive this notice as a result of your credit dispute. You have the right to request additional information about how the investigation was conducted. You should also be given the specific point of contact regarding the item on your credit history.
For instance, who was contacted about the item on your credit report. There are additional rights the Fair Credit Reporting Act gives you. The take away from the FCRA is that as a consumer this law was passed to protect you.
Did you know according to a study by the U.S. Public Interest Research Group in 2004, it was found that 79% of consumer credit reports contain some type of error or mistake. Your credit report and the information contained within it, is one of the most influential documents about you.
This document directly influences your lifestyle. An increasing trend among employers is to check a job applicants credit report, before offering them a position of employment. It is legal to erase bad credit information from your credit report. However unless you are an expert in consumer credit laws, we would encourage you to consult with a professional credit attorney.
Remember the law is on your side, you don’t just have to live with bad credit for seven long, expensive, and often embarrassing years! Get expert credit help with a free credit consultation by calling toll-free 1-877-418-7596. For more tips and strategies with Dan Willis sign up for our free newsletter.
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