The Fair Credit Reporting Act: Your Right to Privacy and Accuracy
Credit reports have become increasingly important in our lives. Lenders, employers, landlords, and insurance companies use them to make business decisions that directly affect you and your goals. It is vital, therefore, that the information on your credit report be accurate and secured against fraud. The federal Fair Credit Reporting Act (FCRA) exists to ensure that the financial data contained in your credit report is not only correct, but private.
Though the FCRA is a powerful law in itself, to protect consumers even further against identity theft and discriminatory lending, an amendment was passed in 2003 – the Fair and Accurate Credit Transactions Act (the FACT Act).
The right to access your information
If you have been denied credit, a loan, insurance, or employment because of information on your credit report, the company that turned you down is required to inform you that your credit report is the reason for the denial and provide the name of the bureau they used. You are entitled to receive a free copy of that report (within 60 days) so you can be sure that the information is correct.
You may receive a free copy of your credit report (without the credit score) from each of the three consumer credit reporting bureaus (Equifax, Experian, and TransUnion) once a year (or anytime you suspect identity theft has occurred) from Annual Credit Report Request Service. You may also receive a free report directly from the credit bureaus every twelve months if you if you are unemployed, are on public assistance, or if your report is inaccurate due to fraud. If you need a credit report and score at any other time you may access it from the bureaus for a fee.
The right to accuracy
It is the credit reporting agency’s responsibility to report only true information, so if you discover a false item, file a dispute. The credit reporting agency has 30 days to investigate your claim, during which time a notice of dispute will appear on your report.
If the item is found to be correct, it stays. If the information source cannot prove the item is correct, it is removed. In either case you will receive a report of the investigation and, if it resulted in a change, a new copy of your credit report. You may also request that anyone who has recently received your report be notified of the update.
The right to explain yourself
Wish you could explain why you were late on payments to your credit cards? You can, by adding a brief statement to your credit report. In one hundred words or less, you have the right to tell your side of the story. For example, you may have indeed paid your credit card bills late, but a medical emergency prevented you from working for a specific period of time. Anyone who accesses your credit report will be able to read your explanation, and it could help personalize the situation.
The right to have negative information “age-off”
Even if you have information on your report that is negative, don’t despair – it won’t haunt you forever. In most cases, such information will be removed after seven years. Chapter 7 bankruptcies will drop off after ten years.
The right to privacy
Not just anybody can access your credit report – only those with a need recognized by the FCRA may do so. This is usually a creditor, insurer, landlord or other business. And while employers, both current and prospective, may, they must have written consent from you before they access your report.
Many people receive unsolicited mail for credit, loans, and insurance. These offers are generated from lists that businesses buy from credit bureaus. If you would like to be removed from these lists (for five years or even permanently) call the toll-free number: 1-888-5-OPTOUT (1-888-567-8688) or visit the website www.optoutprescreen.com.
The right to seek damages
If you believe a credit reporting agency, a business that provides information to the agency, or a user of the information contained in your report violates the terms of the FCRA, you may sue them. You may even have additional rights concerning your credit information under state law – contact your state attorney general’s office to know more.
Revised January 2016.