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Everything you need to know about your credit rights pretty much begins and ends with the Fair Credit Reporting Act (FCRA). The law was first enacted in 1970 and has been amended more than a dozen times over the years. The FCRA is 84 pages long and outlines the rules and regulations for the credit reporting industry, as well as consumer protections to promote accurate credit reporting practices and insure that your sensitive credit report information is kept private and secure.
The FCRA covers a lot more than just consumer protections and is chock full of credit reporting industry regulation legalese. To save you the time and headache of reading through 84 pages of the law, we’ve created this pocket guide to give you a quick, comprehensive summary of your credit rights under the FCRA.
By law, you have the right to request a free copy of your credit report from each of the three major credit reporting agencies — Equifax, Experian and TransUnion, once every 12 months.
You also have the right to request a copy of your credit report at any time, and the report must contain all of the information reported in your credit report at the time of your request. However, you may have to pay for a copy of your credit report if you have already used your annual freebies.
You are also entitled to a free copy of your credit report if:
We all have the right to request access to our credit score(s). Though, unlike the free credit report disclosure rule, you’ll have to pay to obtain a copy of your credit score(s). However, if you are applying for a mortgage loan, your mortgage lender must disclose your credit score(s) and any key factors associated with the score(s) for free.
If you find any inaccurate or incomplete information within your credit report, you have the right to file a dispute to have the information corrected or removed. By law, the consumer credit reporting agencies have 30 days to complete an investigation and resolve your dispute.
In order for anyone to obtain access to your credit report information, they must first have permissible purpose to do so. The FCRA defines permissible purpose as any one of the following instances:
Even though an employer or potential employer may have permissible purpose to access your credit report information, legally they can only do so if you grant them authorization.
If you are ever denied a job, credit or insurance because of the information on file in your credit report, the employer, creditor or insurance issuer must notify you and tell you so. They must also tell you which credit reporting agency provided your credit report information, and they must do so in writing. This notice is called a “notice of adverse action,” which is required for any adverse action taken by an employer, creditor or insurance company based on the information in your credit report. This includes any unfavorable changes or actions, such as an increase in charges, a reduction in coverage, a denial or even a cancellation, whether it involves the underwriting of insurance or a credit application — or employment.
Negative information has a statute of limitations on how long it can be reported in your credit report. Under the FCRA, credit reporting agencies cannot report negative information after it has expired. Most negative information will remain in your credit report for seven years, however there are a few exceptions to the rule:
This may come as a surprise but credit reporting agencies make money from their data by selling your information to companies that would like to solicit your business. If you don’t want to be included in these “prescreen” lists, you have the right to remove or “opt out” of these prescreen lists. You can opt-out by visiting the federally mandated website at www.OptOutPrescreen.com, or by calling 1-888-567-8688.
Image: Pittaya Sroilong, via Flickr
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