What is the Fair Credit Reporting Act and What you Should Know
By Cathy Taylor
The Fair Credit Reporting Act
(FCRA) and the recent update to this law called the Fair and Accurate Credit
Transactions Act (FACTA) protect consumers against inaccurate information being
reported by credit bureaus and the privacy of that information. What does this
mean to you?
When you make purchases on a
credit card, make payments to your accounts, open new bank or credit accounts,
borrow money, buy a house or a car, and even fund your education, your financial
information is reported by creditors and lenders to a credit bureau.
The three major credit
agencies that serve as clearinghouses for this information are Equifax,
Experian, and TransUnion. Each lender and credit company may report your
information to a different agency, depending on the location of the business and
the service agreement between the companies, so each credit agency might print
very different information on your credit report.
According to the FCRA, you
have the right to know what is on your credit report if you ask for it. You can
contact each of the credit bureaus separately and pay for a report at any time.
However, if a company refuses you credit, employment, or insurance, you may
request a free copy of your report within 60 days. Simply ask the company that
denied you credit for the name and contact information of the credit bureau they
use. In addition, all three agencies must provide a free copy of your report in
cases where you have been the victim of fraud or identity theft.
Due to the recent changes by
the FACTA, you will be entitled to one free copy of your report from each agency
per calendar year, effective in all states by the end of 2005. (You can order it
at
www.annualcreditreport.com ) For example, if you order a report from Equifax
in June of 2005, you may request a free report in June 2006. The credit bureaus
must also supply you with a list of everyone who has requested your report in
the last year.
The FCRA requires that all
credit bureaus and all information providers, such as lenders, credit card
companies, or landlords, correct any inaccuracies that they are aware of in your
report. If you find inaccurate or incomplete information in your credit report,
notify all three agencies by phone and follow up in writing by using certified
mail, return receipt requested, so you will have documentation of all requests
and responses by the bureaus.
Also send a request for the
correction in writing to the information provider. If the provider finds that
the inaccuracy is substantiated, they must notify all national credit bureaus of
the correction. If the dispute results in a change, the credit bureau is
required to provide you with written results and a free copy of your adjusted
report.
Privacy is a serious issue
when it comes to your personal information, and the FCRA includes provisions to
guard the privacy of your credit report. Your employer or a potential employer
may only gain access to your credit history with your consent. An employer,
insurer, or creditor cannot access a report that contains your medical
information without your approval. Only people with a legitimate business need,
such as an application for credit or a rental agreement, are allowed under the
FCRA to obtain a copy of your credit report.
The FACTA has enabled
consumers to place a fraud alert on their credit report with one phone call to
the credit agency. In cases where you suspect that you are the victim of
identity theft, or have simply lost your identifying information, you can stop
potential thieves from accessing your credit.
You can also get records from
businesses where a thief has used your personal information without your
consent, provided you have a copy of the police report detailing your identity
theft. These records are invaluable in the process of clearing your name after
such a crime.
Also new with FACTA is the
requirement that mortgage lenders and credit bureaus provide consumers with
their credit scores upon request. In addition, if an information provider is
sending negative information to a national credit bureau for inclusion on your
credit report, they must now send you written notification prior to doing so.
These laws, the FCRA and its
newer counterpart the FACTA, have made significant strides toward protecting the
consumer from potentially damaging errors and breaches of privacy.
More information can be found
at http://www.apscreen.com
About the Author
Cathy Taylor is a marketing consultant with over 25 years experience.
She specializes in internet marketing, strategy and plan development,
as well as management of communications and public relations programs
for small business sectors. She can be reached at Creative Communications:
creative-com@cox.net or by visiting www.apscreen.com
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