The Federal Credit Reporting Act or the FCRA is a United States federal law that governs the collection and dissemination of consumer credit information. It is a defense for the fairness, truthfulness and confidentiality of private credit information that is obtained by the credit reporting agencies. The law was first enacted back in 1970 and the most recent amendment was in December 2003.
Credit reports are common and frequently used in the United States. The fundamental purpose of a credit report was to assess the creditworthiness of a person for getting credit but at present credit reports are also used for such things as insurance underwriting and employment applications. As of this time, it is completely lawful for a person to be turned down for insurance or turned down for or terminated employment on the basis of what is contained in a credit report.
Credit reporting agencies are companies that collect and compile credit information on consumers. There are three major credit bureaus in the United States. They are TransUnion, Equifax and Experian.
The Fair Credit Reporting Act protects consumers in a variety of ways. For one it gives consumers the right to dispute and contest information found on a credit report based upon completeness and accuracy. If there is erroneous information showing on your credit report you need to supply a dispute to the credit bureaus. They will have 30 days after delivery of your dispute letter in which to either corroborate the truth of their reporting or to remove the erroneous information from your report.
Under the FCRA, a consumer is as well entitled to obtain one free credit report from each of the credit bureaus one time per year. In order to collect your credit report you just need to offer a request. If you are denied credit because of something that is listed on your credit report you as well have a right at that time to obtain a report. The credit bureau that is reporting the poor information must give a credit report to the consumer.
Often negative information is removed from credit reports on the basis of disputes. If the information is removed from a credit report because of a dispute the credit bureaus cannot reinstate the information unless they tell the consumer in writing. You can visit http://724credit.com for more information.
The FCRA also clearly outlines the period of time that negative information can be retained on a credit report. Most often all listings can only stay on the credit report for 7 years from the point of delinquency. A bankruptcy can remain on the report for 10 years and a tax lien can remain for 7 years once it is paid off.
It is well worth a consumers time to take advantage of the rights offered by the Federal Credit Reporting Act because it is predicted that as many as 40% of all disputed information is not suitably substantiated within the time limit. Consumers should be aware, though, that all accurate and truthful information should not be disputed but should stay on the credit report.
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