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Fair Credit Reporting

1. What is the role of a credit report?

If you have ever applied for a credit card, a charge account, a personal loan, for an insurance policy, or a job, then there is a financial file about you. This file contains information on where you work and live, how you pay your bills, and whether you have been sued, arrested, or filed for bankruptcy. These files are called a credit report. In today’s world your credit report is becoming more important each and every year. No one pays by cash any more. Therefore, even if you have filed for bankruptcy, it is extremely important to always pay attention to your credit report. This crucial report affects many aspects of your life each day.

The companies that gather and sell this information are called Consumer Reporting Agencies (CRA’s). The most common type of CRA is the credit bureau. The CRA’s sell provide this information about you to your creditors, employers, insurers, and other businesses is called a consumer report.

The Fair Credit Reporting Act (FCRA), is enforced by the Federal Trade Commission. The FCRA is designed to promote the accuracy of credit reports. Moreover, this law tries to ensure that credit reports protect the privacy of individuals. The recent amendments to the Act expand your legal rights and impose additional requirements on CRA’s.  The businesses that supply information about you to  the CRA’s, and those that use consumer reports also have new responsibilities under the law.

2. Where can I contact the major credit bureaus to obtain a copy of my credit report?

The three major national credit bureaus are:

Equifax
800-685-1111
www.equifax.com

Experian
888-EXPERIAN (888-397-3742)
www.experian.com

Trans Union
800-916-8800
www.transunion.com

In addition, anyone who takes action against you in response to a report supplied by a CRA – such as denying your application for credit, insurance, or employment – must give you the name, address, and telephone number of the CRA that provided the report.

3. Do I have a right to know what’s is in my credit report?

Yes, if you request it. The CRA must inform you about everything in your report. This disclosure includes any medical information, and in most cases, the sources of the information. The CRA also must give you a list of everyone who has requested your credit report within the past year, and  two years for employment related requests.

4. Is there a fee charged to obtain a copy of my credit report?

Sometimes. There’s no charge if a company takes an adverse action against you, such as denying your application for credit, insurance or employment, and you request your report within 60 days of receiving the notice of the action. The notice will give you the name, address, and phone number of the CRA. In addition, you are entitled to one free report a year. The fee to obtain a credit report is also waived 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. Otherwise, a CRA may charge you up to $9 for a copy of your report.

5. How can I fix my credit report if it contains inaccurate or incomplete information?

Under the new law, both the CRA and the information provider both have legal responsibilities to correct any inaccurate or incomplete information in yourcredit report. To protect all your rights under this law, you should contact both the CRA and the information provider.

First, advise the CRA in writing what information you believe is inaccurate. CRA’s must then re-investigate the disputed items at issue. This investigation must be accomplished  unless they consider your dispute frivolous. They also must forward all of your relevant data you provide about the dispute to the information provider. After the information provider receives notice of a dispute from the CRA, then it must investigate, review all relevant information provided by the CRA, and then report the results to the CRA. If the information provider finds the disputed information to be inaccurate, then it must notify all nationwide CRA’s so that they can correct this information in your file.

When the re-investigation is complete, then the CRA must provide you with the written results, and a free copy of your report if the dispute results in a change. If an item is changed or removed, then the CRA cannot put the disputed information back into 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.

Second, you should advisel the creditor or other information provider in writing that you dispute an item. Many providers specify an address for disputes. If the provider then reports the item to any CRA, it must include a notice of your dispute. In addition, if you are correct – that is, if the information is inaccurate – the information provider may not use it again.

6. What can I do if the CRA or information provider won’t correct the information that I dispute?

A re-investigation may not resolve your dispute with the CRA. If that’s is your situation, then ask the CRA to include your statement of the dispute in your file and in future 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. There usually is a fee for this service. 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.

7. Can my employer obtain my credit report?

Only if you give them permission to review it. A CRA may not supply information about you to your employer, or to a prospective employer, without your consent.

8. Can creditors, employers, or insurers get a report that contains medical information about me?

Not without your approval.

9. What should I know about “investigative consumer reports”?

A. “Investigative consumer reports” are detailed reports that involve interviews with your neighbors or acquaintances about your lifestyle, character, and reputation. They may be used in connection with insurance and employment applications. You will be notified in writing when a company orders such a report. The notice will explain your right to request certain information about the report from the company you applied to. If your application is rejected, you may get additional information from the CRA. However, the CRA does not have to reveal the sources of the information.

10. How long can a CRA report negative information?

Seven years. There are certain exceptions:

a. Information about criminal convictions may be reported without any time limitation.

b. Bankruptcy information may be reported for 10 years.

c. Information reported in response to an application for a job with a salary of more than $75,000 has no time limit.

d. Information reported because of an application for more than $150,000 worth of credit or life insurance has no time limit.

e. Information about a lawsuit or an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer.

11. Can anyone obtain a copy of my credit report?

No. Only people with a legitimate business need, as recognized by the FCRA. For example, a company is allowed to get your report if you apply for credit, insurance, employment, or to rent an apartment.

12. How can I stop a CRA from including me on lists for unsolicited credit and insurance offers?

Creditors and insurers may use CRA file information as a basis for sending you unsolicited offers. These offers must include a toll-free number for you to call if you want to remove your name and address from lists for two years; completing a form that the CRA provides for this purpose will keep your name off the lists permanently.

13. Do I have the right to sue for damages?

A. You may sue a CRA, a user or – in some cases – a provider of CRA data, in state or federal court for most 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.

14. Are there other laws I should know about?

Yes. If your credit application was denied, the Equal Credit Opportunity Act requires creditors to specify why – if you ask. For example, the creditor must tell you whether you were denied because you have “no credit file” with a CRA or because the CRA says you have “delinquent obligations.” The ECOA also requires creditors to consider additional information you might supply about your credit history. You may want to find out why the creditor denied your application before you contact the CRA.

15. Where should I report violations of the law?

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, DC 20580.