The Fair Credit Reporting Act

What is FCRA?

Consumer laws and Fair Credit Reporting Act, (FCRA) protect consumers against inaccurate information being reported by the credit bureaus. The act also protects the privacy of the information that is being reported. The latest update to this act has been the Fair and Accurate Credit Transactions Act, which is known as the FACTA.

How does it work?

Every time you make a financial transaction such as making payments to your accounts, opening a new credit card/bank account, borrowing money or buying a house, the information is reported by the lenders and the creditors to the one of the three credit reporting agencies, namely Trans Union, Experian and Equifax. Depending on the service agreement between the companies and the location of the business, each credit company or lender reports your information to one of these three credit reporting agencies. Due to this reason, you may get a different credit report from each of these agencies.

Consumer laws and Fair Credit Reporting Act give you the right to know what is on your credit report. In order to get a credit report, you will need to contact one of the credit reporting agencies. By law, allowed to get one free credit report per year. However, in case you require extra copies, you may have to pay for them.

you may need to pay for it in case you ask for it more than once in a year. You can order for a free credit report at www.annualcreditreport.com.

According to Consumer laws and Fair Credit Reporting Act, if you are refused credit, insurance or employment by any company, you may ask for a free credit report within two months. Find out the name and contact information of the credit reporting agency used by the company and contact them directly for clarifications. Moreover, you are entitled to get a free copy of your credit report from the three credit reporting agencies in cases you have been a victim of identity theft or fraud. The credit reporting agencies are also supposed to provide you with a list of all those who have requested for your credit report in the previous year.

Provisions of FCRA

All lenders, credit card companies, information providers and credit reporting agencies need to correct inaccuracies in your credit report in case they are aware of any. In case you have found any inaccuracy, you may notify all three credit-reporting agencies through phone and follow up through certified mails, requesting return receipts. This way, you can have proper documentation of your requests and the responses from the credit reporting agencies.

Consumer laws and Fair Credit Reporting Act include provisions for guarding the privacy of your credit report. According to this Act, any person requesting for your credit report can access your credit history only if you give consent. Reports containing your medical information cannot be accessed by anyone unless you approve it. The FCRA allows only those with a legitimate business need such as a rental agreement to get access to your credit report.

According to the FCRA, you may also place fraud alerts by calling the credit reporting agencies and stop potential thieves from accessing you credit.