Understanding the Fair Credit Reporting Act

The FCRA, or the Fair Credit Reporting Act is a law that essentially ensures both the accuracy and fairness of the information found in a consumer credit file. The law regulates how agencies are able to collect and access the data, as well as stating how it can be shared.

What’s the Purpose of the Act?

The FCRA helps consumers to understand the action that they can take regarding the information in their credit report. Your information will be gathered over time, and there are organizations out there who may use your information. This could be a bank that wants to view your credit history before offering a mortgage, or it could be a credit card agency that wants to see if you’ve missed any payments previously. Whenever you apply for a credit card, or any other form of credit, the issuing company will check your history to see how creditworthy you are. The terms you are offered may be based on your credit score or the information that’s present.

How does it Help You?

The FCRA gives you the chance to find out what information is in your file. It can also help you to know which information is being used against you, should you be denied credit or sometimes employment.

If you believe that there is inaccurate information on your file, you have every chance to dispute this. You can also put a security freeze on your report as well. This basically ensures that potential lenders are not able to check your report until the freeze is lifted. You can choose to provide a specific lender with a pin-code to access your report, but this expires after a single use.

Disputing Errors

If you dispute an error with your credit report agency, then they will have to investigate the issue. They may then delete the findings, or they will report back to you with an explanation. In some cases, the creditor will tell the agency that an entry is in fact, correct. If this is the case, then they won’t remove it. Should an agency determine that the error is not accurate, it’s possible for you to work things out with the creditor. Sometimes, a creditor will agree that the information is wrong and they will send a letter to the agency detailing this. If there’s no feasible alternative, the FTC do accept complaints about agencies and creditors.

Suing the Credit Reporting Agency

Another option would be for you to sue the agency. If the agency is reporting false information about you and you have been through the process of trying to correct the information, then they may be in violation of the FCRA act. If a creditor continues to publicize false information after you have brought it to their attention that it’s false, then you do have the right to sue them.

Of course, the credit reporting act is there to help and support you as a consumer. If you believe information is false or wrongly reported, it’s vital that you try and get to the bottom of the issue by first approaching the agency. If this did not bring about the right conclusion, suing them could be the only way for you to get the justice you deserve.