Rights For Consumers In The FCRA

By Sharon K Robinson

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

Credit reports are highly used in the United States. Originally a credit report was used only to evaluate the creditworthiness of an individual for the purpose of acquiring credit. Now credit reports are used for other things like insurance underwriting and even employment applications. At the current time it is absolutely legal for a person to be denied insurance coverage or employment based upon the information contained in a credit report. An individual can even be fired from a job on the basis of credit report information.

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 Federal Credit Reporting Act protects consumers from unjust, incomplete and incorrect reporting on a credit report. Under this law a consumer has the right to dispute and challenge any information on a credit report that is inaccurate, incomplete or erroneous in any way. As a consumer you have the option to issue a dispute to the credit agencies. After receiving of your dispute letter they will have 30 days in which to either verify the truthfulness of their reporting or to remove it from your credit report.

The FCRA also offers consumers the right to take delivery of one free credit report from every 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 dubious information must provide the consumer a credit report so that the consumer knows precisely why they were turned down for credit.

Frequently poor credit listings are removed from credit reports after a dispute because the credit bureaus were unable to prove the accuracy 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 also governs the period of time that negative information can remain on a credit report. A listing cannot remain longer than 7 years following the delinquency for most items, however, a bankruptcy can stay on the report for 10 years and a tax lien for 7 years after it has been paid off.

A consumer should take the time to issue a dispute if they have any uncertain information on their account because it has been estimated that as many as 40% of all disputes end up getting the information deleted from the report because it could not be substantiated within the time limit. If the information is poor but truthful and accurate it should not be disputed but should remain on the credit report for the specified time period. - 31382

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