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What Is the Fair Credit Reporting Act and What You Should
Know About It
The Fair Credit Reporting Act (FCRA) and the recent update to
this law called the Fair and Accurate Credit Transactions Act
(FACTA) protect consumers against inaccurate information being
reported by credit bureaus and the privacy of that information.
What does this mean to you?
When you make purchases on a credit card, make payments to
your accounts, open new bank or credit accounts, borrow money,
buy a house or a car, and even fund your education, your
financial information is reported by creditors and lenders to a
credit bureau.
The three major credit agencies that serve as clearinghouses
for this information are Equifax, Experian, and TransUnion. Each
lender and credit company may report your information to a
different agency, depending on the location of the business and
the service agreement between the companies, so each credit
agency might print very different information on your credit
report.
According to the FCRA, you have the right to know what is on
your credit report if you ask for it. You can contact each of the
credit bureaus separately and pay for a report at any time.
However, if a company refuses you credit, employment, or
insurance, you may request a free copy of your report within 60
days. Simply ask the company that denied you credit for the name
and contact information of the credit bureau they use. In
addition, all three agencies must provide a free copy of your
report in cases where you have been the victim of fraud or
identity theft.
Due to the recent changes by the FACTA, you will be entitled
to one free copy of your report from each agency per calendar
year, effective in all states by the end of 2005. (You can order
it at www.annualcreditreport.com) For example, if you order a
report from Equifax in June of 2005, you may request a free
report in June 2006. The credit bureaus must also supply you with
a list of everyone who has requested your report in the last
year.
The FCRA requires that all credit bureaus and all information
providers, such as lenders, credit card companies, or landlords,
correct any inaccuracies that they are aware of in your report.
If you find inaccurate or incomplete information in your credit
report, notify all three agencies by phone and follow up in
writing by using certified mail, return receipt requested, so you
will have documentation of all requests and responses by the
bureaus.
Also send a request for the correction in writing to the
information provider. If the provider finds that the inaccuracy
is substantiated, they must notify all national credit bureaus of
the correction. If the dispute results in a change, the credit
bureau is required to provide you with written results and a free
copy of your adjusted report.
Privacy is a serious issue when it comes to your personal
information, and the FCRA includes provisions to guard the
privacy of your credit report. Your employer or a potential
employer may only gain access to your credit history with your
consent. An employer, insurer, or creditor cannot access a report
that contains your medical information without your approval.
Only people with a legitimate business need, such as an
application for credit or a rental agreement, are allowed under
the FCRA to obtain a copy of your credit report.
The FACTA has enabled consumers to place a fraud alert on
their credit report with one phone call to the credit agency. In
cases where you suspect that you are the victim of identity
theft, or have simply lost your identifying information, you can
stop potential thieves from accessing your credit.
You can also get records from businesses where a thief has
used your personal information without your consent, provided you
have a copy of the police report detailing your identity theft.
These records are invaluable in the process of clearing your name
after such a crime.
Also new with FACTA is the requirement that mortgage lenders
and credit bureaus provide consumers with their credit scores
upon request. In addition, if an information provider is sending
negative information to a national credit bureau for inclusion on
your credit report, they must now send you written notification
prior to doing so.
These laws, the FCRA and its newer counterpart the FACTA, have
made significant strides toward protecting the consumer from
potentially damaging errors and breaches of privacy.
In addition, if your credit is damaged due to circumstances
beyond your control, seek out a professional finance agent such
as an expert witness in credit damage. More information can be
found at http://www.creditdamage.com
Cathy Taylor is a marketing consultant with over 25 years
experience. She specializes in internet marketing, strategy and
plan development, as well as management of communications and
public relations programs for small business sectors. She can be
reached at Creative Communications: creative-com@cox.net or by
visiting http://www.creditdamage.com or
http://www.internet-marketing-small-business.com
MORE RESOURCES:
Credit - Google News
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