Because you are going to review your credit report, and you may need to make changes to it, you need to know about the Fair Credit Reporting Act (FCRA). This is the federal law that is designed to ensure the accuracy and privacy of information contained in your credit reports.
You have a number of rights under this law (and companies who use credit reports to make a decision to extend or deny credit, have a number of fairly strict obligations under the law). The following are aspects of the law with which you should be familiar.
The credit reporting agency (CRA) that compiles your credit report must tell you everything that is in your report, including medical bill information, and in most cases, the sources of the information contained in your report. The CRA also must give you a list of everyone who has requested your report within the past year-two years for employment related requests.
The good news is that everyone is entitled to receive one free credit report each year. You can also receive a free credit report if: (1) you're unemployed and plan to look for a job within 60 days; (2) you're on welfare; or (3) your report is inaccurate because of fraud. Also, if an adverse action has been taken against you because of your credit report (such as a denial of credit), you are entitled to a free copy of your report if you request a copy within 60 days of the adverse action.
Once you receive your credit report, review it extremely carefully. Remember, your financial future may, in large part, be based on this document. If there are any mistakes in the report, you have the right to have those mistakes corrected. However, there are certain procedures you must follow.
First, notify the CRA in writing about any errors you see in the report. Once you report an error, the CRA has 30 days to investigate (unless it believes your report is frivolous). The CRA must forward all relevant data you provide about the dispute to the company or individual who provided the CRA with the information you're disputing. After the information provider receives notice of a dispute from the CRA, it must investigate and review all relevant information and report the results to the CRA. If the information provider finds the disputed information to be inaccurate, it must notify all nationwide CRAs so that they can correct this information in your file.
Once the CRA completes its investigation, it must give you the written results and a free copy of your report if the dispute results in a change to your report. If any item is changed or removed, the CRA cannot put the disputed information back in your file unless the information provider verifies its accuracy and completeness, and the CRA gives you a written notice that includes the name, address, and phone number of the provider.
If the CRA refuses to correct your report, make sure that you ask the CRA to include your statement of the dispute in your file and in future credit reports. If you request, the CRA also will provide your statement to anyone who received a copy of the old report in the recent past. If you tell the information provider that you dispute an item, a notice of your dispute must be included anytime the information provider reports the item to a CRA.
There are some exceptions to this rule that allow CRAs to report certain credit-related information about you for an even longer period of time. One important exception is for bankruptcy information. CRAs can maintain information on your bankruptcy filing for up to 10 years. Other exceptions are as follows:
Also, remember that your credit report is not an open book. Only people or businesses with a with a legitimate business need, such as the need to evaluate your application for credit, insurance or employment, are entitled to review your report.
You may sue a CRA, a user of your credit report, or even a provider of information to a CRA in state or federal court for violations of the FCRA. If you win, the defendant will have to pay damages and reimburse you for attorney fees to the extent ordered by the court.
Although the FTC can't act as your lawyer in private disputes, information about your experiences and concerns is vital to the enforcement of the Fair Credit Reporting Act. Send your questions or complaints to:
Consumer Response Center-FCRA
Federal Trade Commission
Washington, D.C. 20580