Consumer Protection Under The FCRA

The FCRA or the Federal Credit Reporting Act is a federal law that governs the compilation and dissemination of consumer credit information. It promotes the accuracy, fairness and privacy of the personal credit information that is compiled by credit reporting agencies. It was originally enacted back in 1970 and the most recent amendment took place in December 2003.

Credit reports are common and regularly utilized in the United States. The primary intent of a credit report was to appraise the creditworthiness of a person for obtaining credit but now credit reports are also utilized for such things as insurance underwriting and employment applications. As of this time, it is absolutely legal for an individual to be denied insurance or turned down for or terminated employment based on what is contained in a credit report.

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

The FCRA was enacted to guard consumers from incomplete, unmerited and mistaken information on a credit report. It provides consumers the right to dispute and contest any information on a credit report that is judged to be inexact or erroneous in any way. If there is deceptive information showing on your credit report you have the alternative to issue a dispute to the credit bureaus. They will have 30 days from receiving of your dispute to either prove the accurateness of what they are reporting or delete it from your report.

The FCRA also provides consumers the right to take delivery of one free credit report each year from each of the credit bureaus. This does not happen automatically but only after a request has been made. You are also allowed a credit report anytime you are turned down for credit based upon the information on the report. Whichever credit bureau is reporting the bad information must issue the credit report to the consumer upon request.

Many times negative credit listings are removed from credit reports after a dispute because the credit bureaus were unable to confirm the accurateness within the time period. If information is removed the credit bureaus can’t reinstate the listing without notifying the consumer in writing.

The Federal Credit Reporting Act in addition clearly outlines the amount of time that negative information can be retained on a credit report. Most often all listings can only remain on the credit report for 7 years from the time of delinquency. A bankruptcy can stay on the report for 10 years and a tax lien can remain for 7 years when it is paid off.

It is well worth a consumers time to take advantage of the rights offered by the FCRA because it is predicted that as many as 40% of all disputed information is not properly proven within the time limit. Consumers should be aware, however, that all correct and truthful information should not be disputed but should stay on the credit report.

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