5 Rights You Have Under The Fair Credit Reporting Act
Posted: Friday, November 16, 2012
The Fair Credit Reporting Act was enacted to protect consumers from having inaccurate information spread about them on a credit report. However, the FCRA provides many other rights to consumers. Here are some:
1. The Right to View Your Own Credit Report
The Fair Credit Reporting Act provides that each person is entitled to one free credit report for each twelve (12) month period. The bureaus must provide you a report free at least once and it can be obtained by visiting www.annualcreditreport.com. However, that is not the only time they have to give you your report for free. In addition, any time adverse action is taken on your credit report, that is, you are denied credit, you are entitled to a free report from that credit bureau whose report was used to make the decision. All the consumer needs to do is mail in a request along with the letter that provided the denial.
However, free credit reports are not the limit of a consumer's ability to get their report. They are entitled to it any time they ask for it (though they will have to pay the regular price for one). The Fair Credit Reporting Act provides that upon request, a credit bureau must provide you a report, and that report must contain all the information that they similarly provide to creditors or potential creditors about you.
2. The Right to Keep Your Credit Report Private
A credit report is private. It contains very personal information about a person's financial status and reputation among their creditors. Because of the sensitivity of this information, Congress, in enacting the Fair Credit Reporting Act, placed limitations on who may obtain a copy of a consumer's credit file. The people or companies that can gain access to a consumer's credit report essentially fall into 3 groups, potential and current creditors, potential and current employers, and potential and current insurers. If any person or company gains access to a consumer's credit report for any other reason, this may violate the FCRA.
3. The Right to Dispute Information on a Credit Report
When a consumer reviews a credit report and finds inaccuracies or errors, they are entitled to have that matter promptly reviewed. The FCRA provides that when a consumer finds an error on their credit report, they can dispute that error directly to the credit bureaus. When a credit bureau receives a consumer dispute, the credit bureau must (1) conduct an investigation and report back the results of that investigation within 30 days of receiving the dispute, (2) notify the creditor reporting the information within five (5) days of receiving the dispute about the consumer's claims (which in turn kicks off that creditor's obligation to independently investigate the error as well), and (3) provide the creditor all relevant information given by the consumer to the credit bureau, so that the creditor's investigation can be complete and meaningful.
4. Employment Background Checks are Included Under the FCRA
A report that is protected under the FCRA is one that reports information about a consumer's ability to pay debts, but also about their character, reputation and history. Background checks that include matters such as arrest records are indeed such a report. Therefore, a background check performed when a consumer is seeking employment is covered under the FCRA. That is, a consumer has the right to obtain a report and dispute the contents of it. A failure to remove negative, inaccurate information can result in civil liability to the company that prepared the report.
5. Negative Information Has a Shelf Life
Any negative information on a credit report such as a missed payment or a charged off account can only be reported for seven (7) years from the date of such negative activity. Any public record, such as a judgment, bankruptcy or a crime, can only be reported for ten (10) years from the date of the occurrence. This means that a negative mark cannot stay on forever. If a single payment is missed, then that report of missed payment can only be on the credit report for 7 years since the missed payment. If the creditor chooses not to report that missed payment for 3 years after the payment is missed, and then decides to report the missed payment, they only have 4 more years left of reporting it. If an account is charged off, then the account must be removed from the credit report 7 years after the charge off date regardless of when the creditor first decides to report the charge off. This assures that negative information will not follow someone around forever.
SmithMarco, P.C. has been protecting consumer rights since 2005 and handles Fair Credit Reporting Act cases. If information about you is inaccurately being reported, or if you feel that you're rights have been violated, please contact us for a free case review.