The 9 Credit Reporting Rights of Every Consumer
79% of credit reports contain errors; consumers have legal rights to correct
Good credit is essential for everything from buying a car or new home to applying for a job. Credit reports are compiled by credit bureaus with information gathered from creditors. The three largest credit bureaus are Experian, TransUnion, and Equifax.
Not all creditors report information accurately or completely to the bureaus. The Fair Credit Reporting Act (FCRA) is a federal law that was enacted to regulate the collection and use of consumer credit information. It requires compliance from credit bureaus to protect the consumer and forms the base of consumer credit rights.
The FCRA is designed to promote accuracy, fairness, and privacy of information in the files of every credit bureau. Most credit bureaus gather and sell information on you. For example, whether or not you pay your bills on time or have filed bankruptcy. This information is potentially given to creditors, employers, landlords, and other businesses.
One of the most important provisions of the FCRA allows a consumer to dispute information on a credit report. In turn, the credit bureau must either remove the disputed information from the credit report or verify its truth with the creditor if that information is to be left on the credit report.
A study released by the U.S. Public Interest Research Group found that 79% of the consumer credit reports surveyed contained some kind of error or mistake. Consumers affected can invoke their rights under the FCRA to review and correct their credit reports.
The FCRA gives consumers 9 specific rights:
Right #1- Consumers can challenge the accuracy of a credit report at any time. Right #2- The credit bureau must investigate anything challenged. Right #3- The credit bureau must investigate within 30 days. Right #4- Access to a consumer's credit information is limited. Right #5- If the credit bureau does not or cannot confirm the information challenged within 30 days, it must delete the information from the credit report . Right #6- If a creditor verifies the information challenged, the negative marks must remain on record. Consumers have the right to maintain the information reported is in dispute and can submit a Consumer Statement of the issue. This statement (100 words max) is then attached to every report that is sent out to explain the consumer's side. Right #7- Consumers must be told if information on their report has been used against them. Right #8- If a consumer is denied credit within the last 60 days, they are entitled to a free copy of their credit report. Right #9- A consumer's consent is required for reports that are provided to employers or that contain medical information.
The length of time information remains on a credit report for credit and collection accounts is seven years from the date of last activity, for courthouse Records is seven years from the date filed, and for bankruptcy chapters 7 and 11 are ten years from the date filed. The complete statute of the FCRA is located at www.ftc.gov
Mike Sweeney is the founder of LionSaves.com, a leading mortgage refinance calculator that focuses on debt consolidation and gives anonymous quotes.
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