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Everything You Need to Know About The Fair Credit Reporting Act

If you are in debt, you will probably be interested in hearing that the FDCPA is not the only act that protects your rights from debt collectors and creditors. There is another act that seeks to regulate the way that information such as credit information is collected and disseminated. This act is the Fair Credit Reporting Act (FCRA). It was created in 1970, and has been protecting the rights of consumers ever since. To learn how the FCRA protects you and your interests, read on!

When credit is evaluated, information about consumers is collected and disseminated by agencies call or texted consumer reporting agencies (CRAs). CRAs have to operate under guidelines outlined by the FCRA. These guidelines include:

  • Providing information to consumers about their credit reports. Each consumer is entitled to one free credit report each year. This can be requested through phone, mail, or online.
  • If a consumer disputes negative information and it is removed, it can’t just be reinserted into the database without the consumer’s knowledge.
  • Credit reporting agencies are not allowed to keep negative information on file past a certain time period. For example, information such as bankruptcy, tax liens, late payments, etc. can only stay on a person’s credit report for seven years from the time they took place. An exception is bankruptcy, which can stay on a credit report for ten years.

The FCRA has guidelines for individual creditors and agencies as well. Creditors oftentimes have credit agreements with individual consumers. The FCRA asks these creditors and third party collection agencies to follow certain guidelines, including:

  • These collectors or agencies have to give accurate information concerning their consumers to the credit reporting agencies
  • The creditor is responsible for looking into information that is being disputed. If there is an error, the creditor must correct it, or show that the credit report is indeed correct. This must be done within 30 days since the creditor was made aware of the dispute.
  • Creditors have to tell consumers about any negative information that is on their credit reports within a month of it being placed there.

If an entity or person uses credit report information for insurance, credit, or employment, they are also held responsible by the FCRA. They have to:

  • Tell a consumer if an poor action results from the reports
  • Inform the consumer of the company that provided them with the report. In this way, the consumer can verify accuracy of the report with that company.

If a person or entity is found to knowingly break with the FCRA’s rules, the consumer can recover damages of up to $1,000 from that entity.

The purpose of the FCRA is to ensure that your credit report is accurate. Credit reports are used for so many things today – from opening credit cards to getting a loan on a car. It is important that this information is correct so that you can reap the benefits of a good credit score. If you are having trouble with a creditor or a consumer reporting agency, you can contact me for assistance.