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The Fair Credit Reporting Act

Posted by attorney Steven Fahlgren

The Fair Credit Reporting Act (FCRA) is designed to promote and establish accuracy as well as ensure the privacy of the information used in consumer reports. Your credit record may contain personal information such as your income, debts and credit payment history. Credit records also contain any information regarding whether you have been involved in any criminal activity, have been sued, arrested or filed for bankruptcy.

A good credit rating is critical for a consumer since businesses often inspect your credit history when they review your applications for credit, insurance, employment and leases. Businesses can choose to grant or deny you credit based on your credit payment history. Unfortunately, for some people credit problems are inevitable. For example, a temporary loss of income or an illness can result in credit damages. However, many consumers are victims of inaccurate credit reporting. Studies show a significant percentage of credit reports contain serious errors. Errors such as false delinquencies or accounts that have never belonged to the consumer have resulted in the denial of credit are the increased cost of credit coupled with damage to one's reputation.

Fortunately, there are things that consumers can do to report errors on their credit report and usually have them removed. Credit Bureaus, as well as furnishers, are responsible for correcting inaccurate or incomplete information in your report. The FCRA provides a mechanism to contact the credit bureau if your credit report contains inaccuracies. If you have an error in your credit report, contact the credit bureau in writing and inform them of what you believe is inaccurate in your credit report. Once the credit bureau receives your complaint, it must reinvestigate the items that you are questioning within thirty days. Under the law, it must also provide the furnisher with all relevant data you gave about the dispute. The furnisher must conduct an investigation. At the completion of the investigation the furnisher must report the results to the credit bureau. If the furnisher finds that the disputed information was indeed inaccurate, it must notify all nationwide credit bureaus so that they can correct/update the information in your file. At the end of the reinvestigation, you are also entitled to be given the written results that include the name, address, and phone number of the provider, as well as a free copy of your report by the credit bureau if the dispute resulted in a change in your credit file. Also, the credit bureau cannot put the disputed information back in your file unless the furnisher has verified it.

If the credit bureau or furnisher refuses to correct the information you disputed you may request the credit bureau to include your statement of the dispute in your file and in future reports. You may also request that the credit bureau provide your statement to anyone who received a copy of the old report in the recent past.

Many people fail to realize that under the FCRA they have the right to get a free copy of their credit report. The credit report you are given must provide all of the information in your file at the time of your request. Consumers also have the right to know the names of anyone who has received their credit report within the last year for most purposes or in the last two years for employment purposes. If a company denies your application for credit on the terms requested it is responsible for supplying the name and address of the credit bureau they contacted, provided that the reason for the denial was based on information given by the credit bureau. At that time you also have the right to get a free copy of your credit report when your application is denied. However, your request must be made within sixty days of receiving your denial notice.

If you disagree with the outcome of the reinvestigation and the credit bureau refuses to fix the problem then you may have to seek legal counsel.

The Fair Credit Reporting Act is a vital part of the "federal umbrella" protecting the privacy of American consumers. The harm caused to consumers is real and can be devastating to those who, through no fault of their own, are victims of credit reporting falsehoods. There are many things that consumers can do if furnishers and credit bureaus do not follow the law.

Disclaimer: The above Article is intended to give you, the consumer, insight into various legal topics. This information is not intended as legal advice, but rather helpful topical information.

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