Consumer Comeback Blog

Know Your Rights With The Fair Credit Reporting Act

Written by Jeffrey Trull

laws-fair-credit-reporting-actYou may take a lot for granted when it comes to your credit score and report, but many of the rights we have as consumers are thanks to one law: the Fair Credit Reporting Act (FCRA).

First enacted in 1970, FCRA covers just about everything that’s law when it comes to your credit history. Since then, this act has been updated with additional provisions to reflect the changing times.

You’re probably not interested in combing the legalese for the parts of that law that really matter to you. Instead, here’s a quick summary of your rights under the Fair Credit Reporting Act in plain English.

Access to your credit report

Your credit report is basically a file of information that’s used to assess your creditworthiness, including to calculate your credit score.

Under FCRA, you have the right to access this information for free once every 12 months from each of the three major reporting agencies — Experian, Equifax, and TransUnion. To access this free report, it’s as simple as visiting AnnualCreditReport.com or requesting a copy by phone or mail.

In addition, you’re allowed free access to your credit report in certain special situations:

  • “Adverse action” has been taken against you due to information in your credit report.
  • You’re a victim of identity theft or fraud (or suspect you may be).
  • You’re on public assistance.
  • You’re unemployed but expect to apply for employment within 60 days.

If you’re not entitled to a free credit report under any of the conditions above, you’re allowed access your history at any time but you may need to pay a fee to do so.

Request your credit score

In addition to your credit report, you have a right to know your credit score, too.

As it’s not a part of your credit report, you credit score doesn’t always come free. However, some providers may give you access to a free credit score.

Notice if credit information has been used against you

If you’ve been denied an application for credit, insurance, or employment based on your credit report, or if other adverse action has been taken against you, the person or entity must notify you of which agency provided the information to make this decision. This must include the name, address, and phone number of the agency.

Dispute inaccurate information

Your credit report is meant to be an accurate version of your credit history. When there’s a mistake, you have the right to dispute any information contained within it that you don’t believe is accurate (go here to learn how to report a credit report error).

Errors can affect your credit score and your eligibility for loans. Information like balances owed, late payments, dates, or even instances of identity theft might appear on your report and negatively affect your score. Even small errors can have an impact, and fixing them can make a big difference, as this writer raised her score by 88 points after disputing several errors.

Credit bureau(s) must investigate any dispute you claim within 30 days. If mistakes are found, by law, this information must be corrected or deleted.

Only certain people may access your report

Your credit report and the information it contains isn’t accessible to just anyone for any reason. The person or entity requesting this information must have a valid need, and there are only certain cases when this is permitted. Some examples are:

  • Lenders – when you’re applying for a loan
  • Credit card companies – when you’re being considered for an account or for pre-screened offers
  • Landlords – for performing a credit cheek on potential tenants
  • Insurance companies – when being considered for a policy
  • Employers – when being considered for employment, but only with your written consent

Keep in mind, your permission is not required in most of these cases, with the exception of employers.

Time limitation on negative information

One provision that consumers should like: there are limits about how long negative information stays on your credit report.

Negative information can typically only stay on your report for seven years, but a few exceptions to this rule exist.

Bankruptcies generally stay on for 10 years from the date filed, except for chapter 13 bankruptcies, which stay on for seven years from the date discharged.

Unpaid tax liens may remain on your credit history indefinitely.

Opt-out of offers

By law, you’re allowed to opt-out of unsolicited, prescreened offers and mailings. In many cases, these are credit card offers that are tailored to you based on your credit history.

Thanks to the Fair Credit Reporting Act, it’s easy to opt-out. Just visit OptOutPrescreen.com or call 1-888-567-8688. Completing this process online earns a five-year electronic opt-out, and you may choose to permanently opt-out by filling out a written form.

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