The Rights For Consumers Under The Federal Credit Reporting Act

The Federal Credit Reporting Act or the FCRA is a United States federal law that regulates the collection and dissemination of consumer credit information. It is a safeguard for the justice, accurateness and privacy of private credit information that is accessed by the credit reporting agencies. The law was first enacted back in 1970 and the most recent amendment was in December 2003.

Credit reporting is giant industry in the United States. Credit reports are utilized for their primary 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 fully legal to be turned down for employment or insurance based upon your credit report.

A credit-reporting agency is a business that collects, compiles and sells credit information on consumers. In the United States there are three main credit-reporting bureaus, TransUnion, Experian and Equifax.

The FCRA protects consumers from unjust, incomplete and incorrect reporting on a credit report. Under this law a consumer has the right to dispute and contest any information on a credit report that is imprecise, incomplete or erroneous in any way. As a consumer you have the choice to offer a dispute to the credit agencies. After delivery of your dispute letter they will have 30 days in which to either corroborate the accuracy of their coverage or to erase it from your account.

The FCRA also provides consumers the right to take delivery of one free credit report from each credit-reporting bureau one time per year. The consumer just needs to put in a request. You also have the right to receive a report if credit is denied because of what is contained on the credit report. The credit bureau that is reporting the questionable information must offer the consumer a credit report so that the consumer knows precisely why they were denied credit.

Frequently bad information is deleted from credit reports based upon disputes. If the information is deleted from a credit report because of a dispute the credit bureaus can’t put back the information unless they notify the consumer in writing.

The amount of time that poor information can stay on a credit report is also regulated by the FCRA. Usually a item can only remain on a credit report for 7 years following the delinquency. In the case of a bankruptcy the listing can remain for 10 years and in the case of a tax lien, the limit is 7 years after it is paid off.

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

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