The Rights For Consumers Under The Federal Credit Reporting Act
In 1970, the United States government enacted the Federal Credit Reporting Act or the FCRA. This law governs the collection and dissemination of consumer credit information. It ensures the truthfulness, equality and privacy of personal credit information that is collected by credit reporting companies. The most current amendment to the law was in December 2003.
Credit reporting is giant commerce in the United States. Credit reports are used for their original and just purpose of evaluating the creditworthiness of an person to borrow money and now they are also being used for such things as insurance underwriting and employment. As of right now it is completely lawful to be turned down for employment or insurance on the basis of your credit report.
Credit reporting agencies are companies that collect and compile credit information on consumers. There are three major credit bureaus in the United States. They are TransUnion, Equifax and Experian.
The Fair Credit Reporting Act protects consumers in a number of ways. For one it gives consumers the right to dispute and challenge information found on a credit report based upon completeness and truthfulness. If there is incorrect information displaying on your account you need to supply a dispute to the credit bureaus. They will have 30 days after acceptance of your dispute letter in which to either substantiate the truth of their reporting or to remove the erroneous information from your credit report.
The Federal Credit Reporting Act also gives consumers the right to take delivery of one free credit report each year from each of the credit companies. This does not happen automatically but only after a request has been made. You are also allowed a credit report anytime you are turned down for credit on the basis of the information on the credit report. Whichever credit bureau is reporting the negative information must offer the report to the consumer upon request.
Frequently bad credit listings are removed from credit reports after a dispute because the credit bureaus were unable to verify the accuracy within the time period. If information is removed the credit bureaus cannot reinstate the listing without notifying the consumer in writing.
The FCRA also governs the period of time that poor information can remain on a credit report. A listing cannot remain longer than 7 years following the delinquency for most things, however, a bankruptcy can stay on the credit report for 10 years and a tax lien for 7 years after it has been satisfied.
It is worth the time and energy it takes for a consumer to present a dispute to the credit bureaus. It has been predicted that as many as 40% of all disputed listing are deleted because the information can’t be substantiated within the time period. Accurate and truthful information should not be disputed and should remain on the credit report but a consumer should try to get all erroneous information deleted through the dispute procedure provided by the Federal Credit Reporting Act.
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