How does the Fair Credit Reporting Act protect... - Limited/Bad/Fair Credit Questions


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Credit Card Applications » Questions » User Questions » Limited/Bad/Fair Credit » How does the Fair Credit Reporting Act protect consumers?

How does the Fair Credit Reporting Act protect consumers?

Answered on | Updated on April 20th, 2011
The content is accurate at the time of publication and is subject to change.

The Fair Credit Reporting Act was passed in 1970 and it contains a set of laws that are enforced by the Federal Trade Commission. According to this act the credit information that is obtained, reported, and used is regulated and every consumer has to understand the meaning of these regulations which forms the whole basis of consumer rights in the United States.

The three major credit reporting agencies Experian, Equifax, and TransUnion are obliged under the FCRA guidelines to provide one free credit report annually. If there are any discrepancies in the report the consumer can bring it to the notice of the agencies and the agency in turn will have to make the necessary corrections within the stipulated time period.  Negative reporting will have to be removed within 7 years of its appearance.

Banks and other financial institutions are the ones that furnish the information to the credit reporting agencies. They cannot report information that is inaccurate and any dispute regarding that inaccurate information by the consumer, will have to be rectified by the institutions within 30 days of receiving the complaint. The consumer will have to be informed about any negative information that is reported to the agencies.

Even those who use the information on your credit report will have to abide by certain rules and regulations. If employers use this information in their decision-making and if the report has a detrimental effect on the decision-making, then that must be reported to the consumer and the CRA that furnished the information must also be mentioned so that the consumer can have the right to dispute in case of any discrepancies in the credit report.

Any violation in this regard can have serious implications on the credit reporting agencies and carry civil liabilities. If the violation of the FCRA guidelines is due to negligence the consumer can claim for damages as well as the legal costs that were incurred. However, if the violation was intentional then the consumer can claim anything in the range of $100 to $1,000 inclusive of punitive charges and other related costs and legal expenses.

Consumers can use this information to assert their consumer rights.  The consumer is entitled to receive information with regard to any negative reporting and the consumer also has the right to get the inaccurate information removed if there is no documentary evidence by the reporting agency. Consumers must be aware of their rights and use them to their advantage.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
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