FCRA (Fair Credit Reporting Act): The Basics
Credit reports and credit scores often make or break a loan application, a mortgage request, and can even affect a job application. When the report plays such an important role in your life, it is only fair that you –the consumer- have the right to challenge and question any aspect that does not accurately represent your financial behavior.
Why You Need Protection
There are three major credit bureaus that gather all the information about your financial habits and collate that information into a numeric value: your credit score. The system is close to perfect; however, discrepancies and errors can creep in. The agencies are said to handle an estimated 20,000 complaints per day.
The fact is that an error in your credit report can pull down your score, which in turn can make lenders and agencies wary of clearing your application for a loan or mortgage.
FCRA is the Fair Credit Reporting Act. Think of it as a caped superhero on your side whenever you feel that you have been the victim of credit injustice. Passed into law by the U.S. federal government back in 1970, it is only in the new millennium that it has come into the spotlight. One reason is a particular statistic: the Federal Trade Commission released a study last year highlighting that more than 20% of consumers have found irregularities with their reports.
Knowing Your Rights Under FCRA
With this law by your side, you are entitled to certain rights in regards to your credit report:
- The most important one is your right to one free credit report each year. This enables you to monitor your score and check for any errors.
- In case you do find discrepancies in your report, you can file a dispute with the CRA (Credit Reporting Agency). Once the CRA receives the dispute, they are required by law to address the issue.
- Once the information is found to be inaccurate, the CRA must then remove it from your report and make the corresponding changes to your score.
- The FCRA not only protects you from inaccurate information in your credit report, but it also protects you in case you fall victim to identity theft.
- If any lender denies your application based on information received from a CRA, the lender must first inform you about the denial of your application and provide the name of the CRA.
It’s important to know your rights in regards to your credit and the credit repair process in general. This information will aid you in credit repair, and it will serve to protect your against the deceptive practices of unscrupulous credit repair companies and the credit bureaus themselves.
Are you curious about how the credit bureaus operate? Are you looking for the best advice in credit repair? At Action Credit Repair, our experts will provide a personalized credit consultation, an audit of your credit history, and offer solutions to all of your credit obstacles. Contact us today to speak with an experienced professional: Call 518-945-2299 or email [email protected].