Safeguards For Consumers Under 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 correctness, fairness and privacy of the personal credit information that is collected by credit reporting agencies. It was initially enacted back in 1970 and the latest amendment took place in December 2003.

Credit reporting is huge industry in the United States. Credit reports are used for their original and fair reason of evaluating the creditworthiness of an individual 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 denied employment or insurance based upon your credit report.

Credit reporting agencies collect, compile and sell credit information on consumers. There are three major credit-reporting companies in the United States. They are Experian, Equifax and TransUnion.

The Fair Credit Reporting Act protects consumers in a variety of ways. For one it gives consumers the right to dispute and challenge information found on a credit report based upon completeness and accurateness. If there is erroneous information showing on your account you need to supply a dispute to the credit bureaus. They will have 30 days after receipt of your dispute letter in which to either confirm the truthfulness of their coverage or to erase the erroneous information from your report.

The FCRA also presents consumers the right to get one free credit report each year from each of the credit agencies. This does not happen automatically but only after a request has been made. You are also allowed a credit report anytime you are denied credit on the basis of the information on the report. Whichever credit bureau is reporting the bad information must provide the credit report to the consumer upon request.

Oftentimes derogatory credit listings are deleted from credit reports after a dispute because the credit bureaus were unable to substantiate the truthfulness within the time period. If information is removed the credit bureaus can’t reinstate the listing without notifying the consumer in writing.

The FCRA also governs the amount of time that negative information can remain on a credit report. A listing cannot remain longer than 7 years following the delinquency for most things, though, a bankruptcy can remain on the report for 10 years and a tax lien for 7 years after it has been satisfied.

It is well worth a consumers time to take advantage of the rights offered by the Federal Credit Reporting Act because it is estimated that as many as 40% of all disputed information is not suitably substantiated within the time limit. Consumers should be conscious, though, that all accurate and truthful information should not be disputed but should stay on the credit report.

Discover everything you would like to know about credit repair lawyer and fast steps for credit repair victory now.