Personal Credit Coach

The FCRA and Credit Reports

Stephen Leifer - Tuesday, December 08, 2015

The Fair Credit Reporting Act is United States Federal Government legislation created to encourage and regulate accuracy, fairness, and privacy of information found on the files of consumer reporting agencies.  The goal of the act was to protect consumers from incorrect or inaccurate information willfully or mistakenly included in their credit reports. 


In an effort to make this happen, the FCRA regulates the collection, dissemination, and use of consumer information, including consumer credit information.  In addition to generally protecting consumers in financial matters, there are numerous benefits the FRCA provides:


·        Enables consumers to receive a free copy of their credit report annually from each of the three major credit reporting bureaus, and ensures they are able to purchase additional copies at a fair price.


·        Regulates access to credit reports, ensuring only approved agencies are able to receive copies and information.  The FRCA calls this “Permissible Purpose,” which means only those with pre-approval are able to run credit checks.  This means an average person is unable to access credit information for anyone they choose.


·        Details how the three major credit bureaus and data furnishers must handle any disputes that arise as a result of inaccurate or unfair reporting


·        Provides strict guidelines concerning the length of time negative information can remain on a credit report.  This includes information about bankruptcies, late payments, judgments, and tax liens. 


·        Details the process for removing negative information and ensuring it is not reinserted onto a consumer’s credit report without notifying the consumer in writing at least five days prior to this occurring.  Basically, if something is removed from your credit report, you must be notified in writing before it is placed back on your report. 


·        Permits consumers to challenge their credit report on the basis of completeness and accuracy.  Should an investigation reveal information is inaccurate or is unable to be verified, it must be removed promptly.





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