Fair Credit Reporting Act

Written by on February 15, 2011 in Money - 1 Comment | Print this page

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Receipts and Credit ReportFair Credit Reporting Act (FCRA) is a federal law that details and regulates how consumer credit information can be gathered, given out, and used by reporting agencies. Under the FCRA, consumers have a right to view information in their credit records, examine their own credit history and dispute wrong information. The Federal Trade Commission (FTC) enforces this act.

FCRA’s goal is to protect consumers and give them the right to defend themselves if they think the information in their credit report and history is inaccurate. Bad reports can affect a good credit score. Through this law consumers are allowed to request their credit information from reporting agencies. You are entitled to get a free report every year according to the FCRA rule.

Another protection given by FCRA is the limited access to your information. You are the only one allowed to view your information and businesses with permissible purpose. Your family members are not allowed to view your information unless you’ve given them authority. Other agencies that are allowed to view your files are collection agencies for debt collection, credit grantors, prospective landlords, insurance companies and your employers with your permission.

You will have information about all agencies that inquire about your file and you can report anyone who was able to obtain your credit information without your consent and outside the guidelines of FCRA.

One of the more important functions of the FCRA law is to provide protection from identity theft. If you have fallen victim to identity theft your record will have a notice of fraud alert. You can apply for the initial 90 days fraud alert or the extended fraud alert that will lasts for 7 years. With the fraud alerts you will need to send in a report of identity theft to one of the credit bureaus and proper identification.

Any information and transactions that is believed to be the result of identity theft will be blocked. You can also request a free copy of your report, if your record is on extended alert you can ask for a free report twice a year. Of course putting your file on fraud alert will make it harder and longer for you to apply for credit since they will be scrutinizing your information every time.

One of the major criticisms reporting agencies get is inaccurate information in the credit history. When a consumer is reported and listed on ChexSystems he or she will have a problem opening a new checking account and since most bank uses ChexSystems there are even times that their other accounts will be affected. Its fine if the information is accurate but if it’s not, then it’s definitely a big hassle for the consumer.

Since ChexSystems reports only the negative information on your account and does not take into consideration a good credit score and long credit history, one banking mistake will make a big impact on your account. To protect consumers FCRA allows consumers to dispute any information that they find inaccurate on their report. You have the right to ask the bank that sent in the report to provide factual information in connection with the ChexSystems report. If they fail to provide proper evidence they will have to remove your name immediately from the report and if they fail to do so they can be liable under the Fair Credit Reporting Act.

There’s more where this came from.  The Credit Doctor has useful and easy to use information that will help you fix your credit.  Find out for yourself what is a good credit score.
Image: David Castillo Dominici / FreeDigitalPhotos.net

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About the Author

Alana Johnson

Alana Johnson tries to enjoy the simple things in life and writes for the Lifestyle category on Quality Life Resources. Living in the small New England town of Norwalk, CT, she looks forward to the warm summer months. To submit your own article for my category, please click HERE. View all Self Improvement articles.