Did you know that a recent study found that one in five people found that they have an error on their credit report? This is a scary statistic because an error in your credit report can negatively affect your life in so many different ways.
It can prevent you from finding a house or apartment, or limit your loan options when you need to borrow money. However, the good news is that there are laws in place to protect your rights when it comes to credit reporting.
This comes in the form of the FCRA. But exactly what is the FCRA? And what rights does it protect? If you want to learn the answer to these questions and more, then you’re in the right place. In this article, we’ll cover everything you need to know about the FCRA and how to fix errors on your credit report. Let’s get started!
What Is the FCRA?
The FCRA is a federal law passed in 1970 that stands for Fair Credit Reporting Act. The law was put in place to regulatory agencies that are responsible for organizing and distributing information related to people’s credit reports.
Specifically, it was used to regulate three major credit reporting agencies:
However, the law also applies to any agencies that handle medical information, rental history, and check writing. As such, it also covers banks, credit unions, and businesses that use credit reports to hire their employees.
What Is a Credit Reporting Agency?
To properly understand the FCRA you need to know what credit reporting agencies are and their role in your credit report. As we mentioned before, credit reporting agencies are specific entities that handle information related to your credit report.
Specifically, these agencies collect, process and archive the financial information of more than 200 million Americans. If you have a credit card or pay bills, then a CRA likely has information processed about you. So where do they get this information?
A credit reporting agency has a variety of information suppliers. These suppliers can be businesses that extend credit toward you. Or, it can be public information, like court records and bankruptcy cases.
A credit reporting agency then processes this information and factors it into your credit report. As such, it has a major effect on your credit score.
So, while a CRA doesn’t decide whether or not you can get a loan, they do have the potential to influence the lender’s decision. As such, there are laws like the FCRA to regulate this power they have over consumers.
What Are Your Rights Under the FCRA?
So, exactly what are your rights that are protected under the Fair Credit Reporting Act? Well, first you have the right to access your credit report. As long as you have the proper identification, then you can request the report once a year.
After you make your request the CRA has fifteen days to provide you with a free copy. Next, you have the right to protected access to your credit information. Only authorized parties are allowed to examine your files.
This includes institutions like banks and insurance companies, as well as individuals like landlords and employers. The CRA in charge of your information is also required to provide accurate reporting.
If you notice an inaccuracy, then you must file a report. The credit reporting agency then has thirty days to review the inaccuracy. If the inaccuracy cannot be verified, then it must be removed. The FCRA also requires that agencies remove any outdated information.
Most negative information, aside from bankruptcies and criminal records, needs to be removed after seven years. Since these agencies often deal with medical bills they’re also obligated to keep your medical information private.
The same goes for private information like your personal account numbers. The law protects you from unsolicited credit offers. Under the FCRA you should be able to opt-out of them.
If a financial institution is going to submit the information that will negatively affect your credit score, then you also have the right to be notified. Finally, if any of these rights are violated, the FCRA states that you have the right to seek financial damages.
When Should You Seek Legal Help?
If you find inaccuracies on your credit report first, then your first course of action. However, if the credit agency disputes the inaccuracies, or completely ignores your application, then you can be left with limited loan options and high-interest rates.
Or, you may have gotten your identity stolen, then a CRA might not recognize that it wasn’t you making poor financial decisions. In these types of scenarios, you should begin considering a lawsuit.
It’s important to remember that you are fully within your legal rights to seek damages against agencies that violate the Fair Credit Reporting Act. If you’re curious about whether or not your case is valid, then you should consult with a litigation expert that specializes in credit reporting cases.
As you can see from the areas the law covers, there are a lot of sections covered by the law. As such, an expert can help you identify where you’ve been wronged and who to hold accountable. If you live in New York City and need a good option, then make sure to check out this link.
Want More Content? Keep Exploring
We hope this article helped you learn more about the FCRA and the protection it offers you as a customer. As you can see, credit agencies have a legal obligation to fulfill the protections laid out in this law.
As such, if you notice a mistake in your report and it’s not corrected, then you’re within your right to pursue legal action to recover any damages caused by the mistake.
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