The FCRA: Rights, Rules, and Violations
Updated: Mar 24, 2022
Studies show in recent reports that more than a third of Americans have mistakes on their credit record. That means it’s highly likely that you or someone you know falls into this category.
Inaccuracies can have a negative impact on your score to the point where you may experience financial consequences: higher insurance rates, subprime loans or paying higher prices than you deserve for other financial products.
It’s easy to feel outmatched and powerless in situations like these– going up against credit reporting agencies such as Experian, TransUnion and Equifax. Luckily, there is an answer: the FCRA.
The Fair Credit Reporting Act (FCRA) was created to govern the practices of credit reporting agencies, as well as to grant powers and rights to the consumer to dispute mistakes and hold these companies accountable.
The FCRA makes it clear how the credit agency must treat you and outlines a number of affirmative rights. If you feel that you have been denied these rights, you may be able to take legal action. If you are unsure whether a credit reporting agency or credit furnishing company has infringed upon your rights, please contact us to schedule an appointment with one of our trained credit analysts (LINK)
You have the right to access your credit report.
Each of the three credit reporting agencies is required by law to provide one free disclosure to you every 12 months. You also may be entitled to additional free credit reports under certain circumstances, such as instances of identity theft or requests for public assistance.
You have the right to know how your credit report is being used.
If a company denies your application for a loan, a job, a credit card, or insurance because of information found on a credit or other consumer report, that company is required to disclose this fact as well as the contact information for the agency providing the report.
You have the right to dispute or remove inaccurate or outdated information.
Finding blatantly incorrect information on your credit is an experience everyone dreads, and hopefully you never encounter it. If you unfortunately do, you have the right to report it and request that the agency remove it from your report. The agency has 30 days to investigate at no charge to you and to then respond to your request (although in some circumstances that can be extended to 45 days). If the agency finds inaccurate or unverifiable information, it is required to promptly delete such information from your file.
If you find outdated information (late payments or missed payments more than 7 years old, or loan defaults more than 10 years old), you are encouraged to exercise your right to request that the agency remove this information. Again, the agency generally must respond within 30 days to your request.
The FCRA not only lists and protects your rights, but enforces requirements and guidelines on credit reporting agencies. These guidelines ensure that the credit reporting agencies truthfully and fairly report your credit history, leading to a more accurate credit score. If you suspect that your credit reporting agency is violating the FCRA, please reach out to schedule an appointment with one of our trained credit analysts (LINK).
Credit Reporting Agencies are prohibited from reporting outdated negative information.
You have the right to report outdated negative information because the agencies are prohibited from publishing it. This is one of the most common offenses — Credit Reporting Agencies are notorious for re-aging negative information from more than 7 years ago, to keep it on your report and keep it bringing your overall score down. If you see outdated information, report it. They are breaking the law.
Credit Reporting Agencies are prohibited from sharing your financial information with just anyone.
The only people who can access your financial information without your express permission are individuals or businesses with an established need, such as a lender, landlord, or insurer. Almost every other request for your financial information must be supplemented with your written permission. This is especially true of current and potential employers (with the exception of the trucking industry) — they must acquire your written permission to access your file.
Credit Reporting Agencies are required to reasonably investigate any disputes or claims you make.
If you make a dispute to a credit reporting agency regarding inaccurate, outdated, or misrepresented information on your credit report, the agency is required to fully investigate your claim, verify its validity, and respond to your dispute in writing within 30 days. Failure to do so is a violation of the FCRA.
Largely, consumers don’t know their own rights. Credit reporting is a complicated process involving countless moving parts — it gets confusing fast. Keep an eye out on your credit report for the below listed common violations. If you catch any, make sure to report it as soon as possible.
And, if you ever want help, get lost, or are unsure whether your rights are being violated, don’t hesitate to schedule an appointment with one of our trained credit analysts at MadgettLaw.Foundation.
Common violations by credit reporting agencies:
1. Reporting Incorrect Information:
- Reporting information resulting from identity theft
- Reporting an inaccurate balance due
- Reporting a timely payment as late
- Reporting an account you closed voluntarily as active
2. Reporting Outdated Information (Re-aging):
- Debts more than 7 years old
- Bankruptcies more than 10 years old
3. Mixing Files
- Reporting a stranger’s information on your report due to a similar first or last name or social security number
4. Neglecting Debt Validation Practices
- Not completing a reasonable investigation of your dispute
- Not modifying and correcting your credit information
- Not removing the disputed item within 30-45 days
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