The Fair Credit Reporting Act


Today, Americans borrow more than ever before. The consumer debt mountain stands at literally trillions of dollars. The systems are getting ever more complex and interconnected. Bills are automated and accurate and there is no scope for negotiations. In many cases it can be very difficult to even get in contact with a credit company. The system is so automatic that if payment is not received on time, you will not have a chance to talk to someone about it but your account will mechanically progress through a series of stages that dictate how you will be dealt with.

Your payment records are also stored on file and sold to or shared with a huge variety of other companies. It is possible that not meeting repayments on one account can now make it more difficult to get credit from other lenders, to be approved for renting or leasing a home, and even to get a new job. So much is at stake regarding credit reporting that federal legislation has been enacted to make sure you are guaranteed certain minimum standards.

The Fair Credit Reporting Act is monitored and enforced by the Federal Trade Commission. It is charged with protecting consumers rights be ensuring that consumer credit reports are kept accurate and fair. It is also designed to protect consumer privacy which is another growing concern. The duties under the law must be obeyed by the three nationwide consumer reporting companies, as well as the businesses and companies that provide the information used in these reports, or use the information contained in the reports.

Under the Act, every consumer has a right to see their credit report, free of charge, annually. This applies to the three credit companies so you can request one report from each company. The three nationwide companies specifically targeted under the act, the three most important, are: Equifax, Experian and TransUnion. If you wish to see your free report you must request it. There is a dedicated website shared by all three companies that gives you access to the report. The report will also show you who else has asked to view it in the previous year.

There are other situations in which you are entitled to a free copy of your report. If you are denied credit by any lender, or if you are denied insurance you will be entitled to a free report. Also if you are denied employment you will be entitled to receive a copy. All situations in which a decision detrimental to your interests is made on the basis of information in your consumer credit report, you must be informed of this, and of the information that led to the decision. You can then request to see your report. The reporting companies have a duty to ensure that the reports are kept accurate and therefore if you find any errors, you can inform them and they must alter the information immediately.

If a decision has been made against you because of an error in your report you should inform the company that made the decision and ask to be reconsidered. Errors of this kind are actually very frequent so it is a good idea to check your three reports annually and make sure they are kept up to date.

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