Understand Your Rights Under The Fair Credit Reporting Act

by Hank Coleman

The Fair Credit Reporting Act (FCRA) was created to help ensure that credit bureaus have the correct data and complete information in your credit report. Businesses and lenders need accurate data in order to have a clear picture of the credit risk you present to businesses who will lend you money. The Fair Credit Reporting Act helps to protect consumers and their credit reports from inaccuracies. There are many rights that consumers have under the act to help.

Your rights under the Fair Credit Reporting Act…

A Copy Of Your Credit Report. You have the right to receive a free copy of your credit report. Unlike the guys in the funny commercials that charge you with a credit monitoring service in exchange for providing you with your credit reports from the three main bureaus: Equifax, Experian, and TransUnion. You can receive one free credit report from each bureau each year. You can request your copy for free at annualcreditreport.com. The Fair Credit Reporting Act also stipulates that your credit report must contain all of the information in your file and must reflect your life and credit data at the exact moment in time when it is requested either by you, an employer, or a potential creditor.

Who Checked Out Your Credit Report? I work for a company that pulls the credit reports of its employees every few years to assess any potential security risks for sensitive data. The Fair Credit Reporting Act states that a consumer has the right to know the names of anyone who asked to receive your credit report in the last year. The credit bureaus are also required to inform you when asked of potential employers who have pinged your credit in the past two years.

Denied Credit? Any company that denies your application for a loan or a credit card must supply the name and address of the credit bureau they contacted. You are then entitled to receive a free credit report to see the negative marks that triggered your denial of credit. Your request for a free report after denial must be made within 60 days of receiving your denial notice. Remember though that your credit report is not the same thing as your credit score. And, your credit score will not be provided to you, only the report. At no time are you authorized a free accounting of your credit score under the Fair Credit Reporting Act.

Investing Disputes. The Fair Credit Reporting Act requires credit bureaus and financial institutions to investigate negative marks on your credit report that you dispute. If you contest the accuracy of information in your credit report, you must file a formal dispute with the credit bureau in question and with the financial company that provided the negative information to the credit bureau.

Explain Yourself. Under the Fair Credit Reporting Act, you have the right to explain injustices in your file that has not been cleared up in a formal dispute with the credit bureau. You can add a summary explanation to your credit report if your dispute is not resolved to your satisfaction which can help smooth over some misgivings that future lenders might have when they pull your credit report.

There are a lot of rights protecting consumers under the Fair Credit Reporting Act. Knowing them and how to ask for a free credit report from the three national credit reporting agencies is key task to fighting identity theft and preparing to apply for a loan if needed.

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{ 3 comments… read them below or add one }

background screening July 26, 2010 at 8:29 am

thanks for the writeup man, really informative…

Free Credit Score July 26, 2010 at 7:41 pm

Great writeup. People need to realize that they have a lot more power nowadays. Gone are the days where a loan officer can simply tell you your credit is bad or good.

CREDIT Revize April 3, 2013 at 11:10 pm

Thanks for sharing such an informative post on Fair credit reporting act. Your credit score is determined by an algorithm developed by the Fair Issue Corporation. Since its inception, three corporations, called a credit bureau specialize in collecting and reporting on financial histories. Those three companies are Equifax, Experian and TransUnion. While, the exact formula used to calculate your credit score is a tightly guarded industry secret, these companies provide general guidelines about financial behavior that can affect your credit score.

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