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Credit Reporting Agencies Other Than the Big Three Required to Follow the FCRA

In the wake of repairing the crashing housing market, the next financial crisis seems to be focused on automobile lending.  While several years ago the major automobile corporations were at great risk of closing their doors, the industry giants have made a substantial comeback with the assistance of our government.  The main reason for this industry flourishing, the rapid growth of subprime auto loans available to consumers in the market to purchase vehicles they probably cannot afford.    Subprime auto loans are loans given to higher risk consumers, which naturally will have a higher interest rate on the borrowed money.

Consumers buying into these subprime vehicle loans are at great risk as the repayment terms of the loans often exceed the life of the vehicle leaving the consumer owing more money on the vehicle that it is actually worth at a time when the vehicle is hardly functioning.  In an effort to qualify a consumer with a less than stellar credit history, auto lenders are turning away from using credit reports from the three major credit reporting agencies, Equifax, Experian and Trans Union and instead using alternative consumer credit reports .  These alternate means are private databases used by lenders which I have discussed in detail in a previous blog, that report information such utility bill repayment history, cellular phone bills and lease agreements. 

This type of public data is introducing a new era of credit reporting.  With computers tracking consumers every move, widespread information on consumers has become more available.  Luckily for consumers, the Fair Credit Reporting Act ("FCRA"), the law enacted to protect consumers from unfair treatment by the credit reporting agencies and furnishers of information, will police the conduct of these databases as well.   
   
Just as a consumer would dispute inaccurate information with the credit reporting agencies, consumers have the same right to dispute information inaccurately reported by these databases.  If you are not approved for an automobile loan, the lender must provide you with a copy of the reasons you were denied.  You are entitled to a copy of the report the lender used to base its decision at your request, and you must dispute in writing the inaccurate information reported by these databases. 

If you are having issues being approved for a loan and believe you have inaccurate information on your credit report or in a database reporting your payment history, contact SmithMarco P.C. for a free case review

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