Illegal Collections
Your Ten Most Important Rights In Credit Repair
Some people are still not aware of the many rights they have when it comes to their credit reports. This puts them at a strategic disadvantage if they are trying to fix their credit. Knowing your rights gives you leverage with credit bureaus, collection agencies and creditors and can make the task of credit improvement much easier.
Some credit repair services will explain these rights to you if you’ve hired them to fix your credit, but often times you’ll have to do your own research if you want to understand the basics. For those of you who are determined to learn more about your rights as a credit consumer, this article points out the rights concerned with the most typical credit reporting situations.
The Fair Credit Reporting Act
The Fair Credit Reporting Act (FCRA) promotes the accuracy, fairness, and privacy of information in the files of credit reporting agencies. Every credit reporting agency is governed by the statutes listed in the FCRA and they are subject to penalties for non-compliance. This makes it safer for you to tread on the sometimes-risky path of credit and, of course, credit repair.
If you have any questions or concerns about the way your credit’s being reported, study the information below to find out how you’re protected under the FCRA and what you can do to keep your credit report fair and accurate.
Your Rights Under the FCRA
1. You must be told if information in your credit report is held against you.
If your credit report has been used to deny you of credit, employment or any kind of loan or service, you must be informed about it and must be given the name, address and phone number of the agency that provided the information. This is important because if there’s something on your report that’s hindering you from credit or services you need to know who to contact in order to have it validated or resolved.
2. You have a right to know what’s on your credit report.
You can request and obtain all the information about you in the reporting agency’s records. You are not only entitled to one free credit report per year from each of the 3 major credit bureaus, but you may be entitled to a free report if:
• Someone has taken adverse action against you because of the information on your credit report
• You are a victim of identity theft
• Your report contains inaccurate information as a result of fraud
• You are on public assistance
• You are unemployed but expect to apply for employment within 60 days
4. You have the right to ask for a credit score.
Credit scores are numerical summaries of your creditworthiness based on information found on your credit report. You may request a credit score from reporting agencies that create or distribute scores but you’ll have to pay for it. If you are involved in any kind of mortgage transaction, you may be given your credit score for free from the mortgage lender.
5. You have the right to dispute incomplete or inaccurate account information.
If you think your credit is being reported inaccurately for one reason or another, you have the right to dispute it with the reporting agency. It’s usually your responsibility to check your report regularly to be sure that everything is accurate. You can dispute inaccurate or incomplete information by writing a dispute letter to the reporting agency.
6. Credit reporting agencies must correct or delete inaccurate, incomplete or unverifiable information.
If a credit reporting agency can’t verify the information under dispute, they’re obligated to either remove it or make the necessary corrections. They only have about 30 days to validate disputed information, often making the verification process difficult. As a result, some items may be removed even when they’re accurate. Some credit repair services tend to take advantage of this statute by disputing as many negative items as possible—even when they are valid. This is illegal and can cause more credit problems down the road.
7. Credit reporting agencies must notify consumers if a previously removed or deleted item is re-inserted.
Since credit reporting agencies are not always able to verify valid information within 30 days, it’s quite possible to have them removed from your credit report. But if the information can be validated later, credit reporting agencies can re-insert the previously removed information—but they must inform you. This is an example of what may happen when you dispute valid information.
8. Credit reporting agencies may not report outdated negative information.
In most cases, credit reporting agencies must not report negative information that is more than 7 years old, or bankruptcies that are more than 10 years old. May people are under the assumption that the 7-year period begins when the account goes into default, but in fact, it doesn’t begin until the account is either charged-off or sent to collections (normally about 180 days after last activity).
9. Access to your file is limited.
A credit reporting agency may only provide information about you to people with a valid need such as lenders, landlords and employers. The FCRA specifies those with a valid need. If someone without a valid need is given your credit information, its is a definite violation.
10. You must give your consent for reports to be provided to employers.
Although employers are considered to have a valid need to have access to your report and are therefore permitted under the FCRA, credit reporting agencies cannot provide them with your information without your written consent. This information can be quite useful, being that more and more employers are running pre-employment credit checks on applicants.
The FCRA was put into place to protect consumers from unreasonable credit reporting policies. It ensures fairness and accuracy in all credit reporting transactions, and your rights therein should be noticed and exercised. If you feel that a credit reporting agency had violated any of your rights under the FCRA, you are entitled to compensation by law.
