What are the important facts you need to know about... - Limited/Bad/Fair Credit Questions


Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from most credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » Questions » User Questions » Limited/Bad/Fair Credit » What are the important facts you need to know about the fair credit reporting ACT?

What are the important facts you need to know about the fair credit reporting ACT?

Answered on | Updated on December 29th, 2010
The content is accurate at the time of publication and is subject to change.

We all know the importance of credit scores and their relevance with regard to any mortgage loan or auto loans, etc. Credit scores are prepared based on the diktats of the federal law and credit reporting agencies (CRA`s) have to gather and process information based on the same and cannot overrule the guidelines that are laid down. The Fair Credit Reporting Act (FCRA) is another such law that is a provision for consumer credit rights in the U.S.

The three Credit Reporting Agencies (CRA`s) also have certain responsibilities under the FCRA. As per the law CRA will have to provide information to the consumers with regard to their credit report while taking considerable measures to ensure the accuracy of the report. Consumers are also entitled to a free copy of the credit report every year. In case there are any discrepancies in the report the consumer can dispute the information on the report and the data that is taken off the report cannot be reinserted without providing the consumer a written notice within 5 days. CRA`s cannot retain negative information from the report for more than a period of seven years. However, bankruptcies can be reflected on the report for about 10 years after it is settled.

According to the rules laid down by the FRCA on the creditors, as well as they are considered the “information furnishers”, and they would include banks, financial institutions, card companies, auto finance companies, etc. These companies will have to provide the accurate information to the CRA`s. They have the responsibility of investigating the disputed information and errors must be rectified, and if they claim they are correct then they should give a written explanation supporting their claim. Consumers will have to be informed before the information is placed on their credit reports. All of this will have to happen within a 30-day period.

FCRA has also directed the agencies that use these credit reports (auto insurance, banks, card companies, etc.) to inform the customers in case of any adverse action, such as rejecting an application or any such action that is taken based on the credit report. The agency that provided the report will also have to be notified so the consumer can verify the same.

Hence it is always better to have good credit scores, although, studies have shown errors in the reporting it is still the only tool available to evaluate the credit worthiness of an individual.

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.
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.
Perfect credit not required for approval; we may approve you when others won’t
Fair/Bad Credit
Instant $500 Credit Line. No Credit Check.
Bad Credit
Monthly reporting to the three major credit bureaus
Fair/Bad Credit

Other Questions in
Limited/Bad/Fair Credit

You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!