The Fair Credit Reporting Act and Your Rights

The Fair Credit Reporting Act (FCRA) is a law, passed in 1970, that regulates the collection and use of information about consumers, including credit information. The FCRA imposes restrictions on the behavior of Consumer Reporting Agencies, also known as Credit Reporting Agencies. In addition, the FCRA gives consumers a broad range of rights, including the right to seek damages against a company that has violated the law.

What are Credit Reporting Agencies?

It is important to know that there are three major credit reporting agencies: Equifax, TransUnion, and Experian. Each of these credit agencies collects and maintains data on millions of consumers and calculates a credit score based upon that information. However, different agencies can calculate the score differently, and it is possible that each agency will have different information about you.

Although having different credit scores calculated by different agencies may seem overwhelming, the Fair Credit Reporting Act provides you with protections that preserve confidentiality and prohibit the reporting of false or inaccurate information.

What Rights Do I Have Under the Fair Credit Reporting Act?

The Fair Credit Reporting Act gives certain rights to consumers. A consumer is broadly defined in the Act as an “individual.” Consumers have the following rights:

  • To be told if information in the file of a consumer reporting agency has been used against you;
  • To know what is in your file;
  • To ask for a credit score;
  • To dispute incomplete or inaccurate information; and
  • To seek damages from persons who violate the Fair Credit Reporting Act.

 

How Do I Obtain a Copy of My Credit Report?

There are a number of different ways to obtain a copy of your credit report, including your credit score. Every person is entitled to obtain one free copy each year from each consumer reporting agency.  In order to make this process easier, the three credit reporting agencies have set up a joint website where a consumer can request all three at once or request one at a time.

If you have not checked your credit reports recently, you may wish to request all three at once in order to insure there are no inaccuracies. However, spacing these requests out over the course of a year allows you to monitor your credit more closely.

You may also be entitled to obtain a copy of your credit report if you have;

  • Been denied credit, employment, or insurance in the previous 60 days;
  •  If you suspect someone is fraudulently using your identity;
  • If you are currently unemployed and are planning on applying for employment in the next 60 days; or
  • If you are on public assistance.

 

How Do I Dispute Protest Inaccurate Information in my Credit Report?

The Fair Credit Reporting Act ensures that credit reporting agencies take disputes over inaccurate or false information very seriously. If you file a dispute with a credit reporting agency, that agency must investigate the dispute unless it is frivolous. Furthermore, the investigation generally happens very quickly – usually within 30 days.

What if My Rights Have Been Violated?

If your rights under the FCRA have been violated, you have several options. First, you can report any violations to the Federal Trade Commission (FTC), the agency in charge of enforcement of the FCRA. However, the FCRA also gives consumers a private right of action.

This means that a consumer can hire a lawyer who is experienced in consumer law cases and sue the violating individual or credit reporting agency for money damages. Damages can include statutory damages (typically a minimum of $100 to $1,000, even if no harm was suffered), actual damages suffered as a result of the violation, attorney’s fees and costs, and punitive damages.

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