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Rights For Consumers In The Federal Credit Reporting Act
The FCRA or the Federal Credit Reporting Act is a federal law that regulates the compilation and dissemination of consumer credit information. It promotes the accuracy, fairness and discretion of the personal credit information that is compiled by credit reporting agencies. It was originally enacted back in 1970 and the latest amendment took place in December 2003.
Credit reports are highly used in the United States. At first a credit report was used only to calculate the creditworthiness of an individual for the purpose of obtaining credit. Now credit reports are used for other things like insurance underwriting and even employment applications. At the current time it is absolutely lawful for an individual to be turned down for insurance coverage or employment based upon the information contained in a credit report. A person can even be terminated from a job based upon credit report information.
A credit-reporting agency is a business that collects, compiles and sells credit information on consumers. In the United States there are three main credit-reporting bureaus, TransUnion, Experian and Equifax.
The FCRA was enacted to safeguard consumers from incomplete, unmerited and incorrect information on a credit report. It provides consumers the right to dispute and contest any information on a credit report that is considered to be incorrect or erroneous in any way. If there is untruthful information showing on your credit report you have the opportunity to provide a dispute to the credit bureaus. They will have 30 days from receiving of your dispute to either substantiate the correctness of what they are reporting or remove it from your report.
The FCRA also gives consumers the right to take delivery of one free credit report from each credit-reporting bureau one time per year. The consumer just needs to put in a request. You also have the right to receive a report if credit is denied because of what is contained on the credit report. The credit bureau that is reporting the dubious information must supply the consumer a report so that the consumer knows precisely why they were denied credit.
Frequently negative credit listings are removed from credit reports after a dispute because the credit bureaus were unable to confirm the accuracy within the time period. If information is removed the credit bureaus can't reinstate the listing without notifying the consumer in writing.
The period of time that bad information can remain on an account is also regulated by the FCRA. In general a listing can only remain on a credit report for 7 years following the delinquency. In the case of a bankruptcy the listing can stay for 10 years and in the case of a tax lien, the limit is 7 years after it is paid off.
It is well worth a consumers time to take advantage of the rights provided by the FCRA because it is predicted that as many as 40% of all disputed information is not properly proven within the time limit. Consumers should be conscious, however, that all correct and truthful information should not be disputed but should stay on the credit report.
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