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The Fair Credit Reporting Act – FCRA

You have rights thanks to the fair credit reporting act. You can download the FCRA pdf here.

In 1970 a Federal law was enacted by Congress to defend consumers from inaccuracies on their credit reports. This law is called the Fair Credit Reporting Act or the FCRA and it was planned to promote the equality, accuracy and privacy of personal information compiled on credit reports by credit reporting agencies.

Credit reporting agencies are companies that are in the industry of collecting, compiling and selling information on consumers for the objective of credit evaluation. The three main credit-reporting agencies are TransUnion, Equifax and Experian.

The Fair Credit Reporting Act allows a consumer to debate and challenge any information found on a credit report on the foundation of completeness and accuracy. The credit bureaus have 30 to 45 days after a dispute to show the ownership of the credit being reported. If they are not capable to validate the accounts it must be removed from the report.

The credit reporting agencies also have other responsibilities under the FCRA. Each year a free credit report must be provided to any consumer who desires one. Before 2003 the consumer had to give a fee for this report but an amendment in 2003 altered this and now it is provided at no charge. A report must also be provided if the consumer has been denied credit on the foundation of what is provided in the report.

Oftentimes when a negative mark is disputed it is removed from the account. Under the FCRA the disputed information cannot be reinstated without the credit bureau contacting the consumer in writing.

The FCRA also defined a limit as to how long negative information can stay on a report. On average if must be removed within 7 years from the occasion of delinquency with the exemption being a bankruptcy that can last for 10 years and a tax lien that can stay put on the report for 7 years after it is paid off.

The credit reporting agencies receive many disputes and it has been estimated that as many as 40% of disputed information is not verified within the time limit and must be removed from the report. Consumers can use that fact for their advantage however; truthful and correct information should always remain on the report even if it is unhelpful.

A FCRA gave consumers the right to dispute inaccuracies and errors and to do the work to repair their credit. Credit repair takes time and patience but it can be accomplished by doing it yourself or by hiring a professional company that specializes in credit repair.

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