How the Fair Credit Reporting Act (FCRA) helps consumers

The credit reporting agencies provide credit reports for businesses, credit card companies, banks, employers, landlords, insurance companies, and others.

The Fair Credit Reporting Act (FCRA) provides consumer protections for those credit reports.

The Fair Credit Reporting Act (FCRA) promotes the accuracy and privacy of information in consumer credit reports. The use of consumer credit reports are controlled by this act.

The FCRA requires consumer reporting agencies to maintain accurate and complete files. According the FCRA, you have a right to review your credit reports and have inaccurate, incorrect and corrected.

Who Can View Your Credit
Credit reports can only be issued to entities that have a legitimate business reason. Legitimate business entities would include creditors, employers, insurers, and government agencies reviewing your status for licensing or benefit purposes, or any third party for whom you request a report.

Errors in Your Credit Report
The credit reporting agencies (CRAs) are responsible for investigating, correcting, and deleting incorrect information contained in your credit reports. The credit reporting agencies must report only accurate information.

Inaccurate information must be corrected or deleted. This is your main weapon against in repairing your credit. Learn how to dispute your credit. Get several strategies to dispute bad credit based on factual errors within the negative credit listing.

Fair and Accurate Credit Transactions Act (FACT Act or FACTA)
An amendment to the Fair Credit Reporting Act a law was passed by the U.S. Congress in 2003 which allows consumers to request and obtain a free credit report once every 12 months. The consumer can obtain a free report from all three major credit reporting agencies, Experian, Equifax and TransUnion. To obtain your reports visit www.annualcreditreport.com.

Include a Statement in Your Credit Report
If you are unsatisfied with the investigation results or correction, you have the right to add a brief statement (100 words or less) about the issue to your credit report. The statement should be a clarification, not an explanation, of credit problems.

Denied Credit
If you have been denied credit, a job or insurance because of information contained in your credit reports, the business which denied you is required to provide you with the name and address of the credit bureau that issued the credit report.

You have 60 days to request a free copy from the bureau. The bureaus must disclose to you all information in the report, its source, and who has recently received the report. Once the credit bureau receives your request they have 30 days to send you a copy of your report.

You have the right to have the credit bureau re-issue corrected reports to lenders who received reports within the last six months, or to employers who received one in the past two years.

Disclosure
Consumer reporting agencies are required to provide you access to the information in your credit report. Any entity that has requested your credit report must also be disclosed to you.

Unless you have been denied credit within the previous 60 days, you must pay for each report. You are however, entitled to one free report a year. Also, you are entitled to a free report if you are unemployed and plan to look for a job within 60 days, you are on welfare, or your report is inaccurate due to fraud.

Opting Out
You may request that consumer reporting agencies do not distribute your name on lists used by creditors, solicitors and insurers to make unsolicited offers of credit and insurance. The credit reporting agencies make money by selling your information.

Opting out of marketing lists protects your information. The marketing lists are not only sold to companies wanting to send you unsolicited credit offers, they are also sold to collection agencies and those who purchase debts. When you opt-out, your information will only be given to someone with “Permissible Purposes”. You can Opt-Out online or via telephone. Visit www.optoutprescreen.com or call (888) 567-8688.

Consumers have the right to sue consumer reporting agencies, users, and providers in state and federal court for violations of the Fair Credit Reporting Act.

Discrimination
The Equal Credit Opportunity Act requires that creditors apply credit standards in a fair manner in order that all consumers are given an equal chance to obtain credit. It does not require all creditors to have the same standards, nor does it guarantee approval of loan applications. Lenders cannot discriminate on the basis of sex, marital status, race, religion, national origin, age, income from assistance programs when reviewing credit applications.

Limited Information
Your sex, race, color, religious affiliation or national origin cannot be inquired about on a credit application unless you are applying for residential real estate. Even in that instance you are not required to answer the question. The information on a real estate application is only to be used to enforce fair housing laws, not for evaluation purposes. Your marital status cannot be asked about unless it is a joint application where you spouse will help you secure, use or be legally responsible for the loan. Your plans to have children is also a question that cannot be asked.

Credit for Couples
Spouses have the right to have their credit histories listed separately, including the accounts they use jointly. Married women have the option of using their birth name or married name. In the case of couples who jointly established credit, but whose credit appears in the name of only one spouse, the other partner has the right to rely on that credit history as well.

Divorced Individuals
You do not have to disclose alimony, child support or maintenance on a credit application if you do not plan to use this income to repay the loan for which you are applying.

Disclosure of Age
Creditors can ask how old you are to make certain you are of legal age to enter into a contract. Your age can be considered to estimate how long you will continue to work; however, your age cannot be used to deny credit to those 62 or older.

Change of Circumstance
Life circumstances such as marital status, change of name, aging or retirement cannot affect the terms of your loan. For instance, the length, interest, or other features of loans cannot be changed, you cannot be forced to reapply for a loan and your loan cannot be terminated.

Applicant Notification
Lenders must notify credit applicants of their decision within 30 days after the application is completed. If credit is denied, the creditor must provide a written statement that includes the action taken, reason for denial, or how to request the reason for denial, your rights as an applicant and the name and address of the appropriate enforcing federal agency.

If you believe that discrimination has taken place, you have the right to file a lawsuit and if the creditor is found guilty of discrimination they can be held liable for actual damages and punitive damages up to $10,000.

View the entire Fair Credit Reporting Act Statutes.



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