What is the fair credit reporting act and what are... - Limited/Bad/Fair Credit Questions


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Credit Card Applications » Questions » User Questions » Limited/Bad/Fair Credit » What is the fair credit reporting act and what are the consumer rights under the FCRA?

What is the fair credit reporting act and what are the consumer rights under the FCRA?

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

The FCRA, or the Fair Credit Reporting Act, is a US federal legislation which promotes fairness, accuracy, as well as privacy for the data that is used by the consumer reporting agencies, which include financial institutions as well as credit bureaus. These consumer bureaus sell or, exchange information about the card holder`s credit history.

The stipulations under the consumer rights by FCRA:

• The cardholder must be informed if any negative information has been given or used against him/her. In case this consumer report or, any other report is used as a tool to deny the card holder for any application for credit, employment, or insurance then the consumer must be informed about the same. The details such as name, phone number, and address of the agency which provided the information must be also be furnished.
• Every consumer, or card holder, has a right to know what is in their file. After providing a proper proof of identity, the consumer may insist on seeing the information that is contained in the file, which is obtained from the consumer reporting agency. Once a year, consumers are entitled to one free copy, (upon making a request), of the credit report from any of the 3 credit reporting agencies.
• Every consumer has a right to know their credit score. These scores are basically summaries of credit worthiness, and this is based on the information that is obtained from the credit bureaus.
• Every consumer can dispute any discrepancies or irregularities which are found in the reporting and bring it to their notice immediately.

As per the FCRA guidelines, any inaccurate information that is brought to their notice must be deleted, or corrected immediately within 30 working days. In addition, consumer reporting agencies cannot furnish any negative information about the customer, if it is 7 years old or any bankruptcies which are over 10 years old.

The FCRA also limits the sharing of consumer information by reporting agencies, only when there is a valid need and not otherwise. The definition for “valid need”, is given in the legislation. If the agencies are found breaking these rules, the consumer has every right to take legal action against the reporting agencies.

Although most states have their own consumer reporting laws, each and every state must enforce the guidelines laid down by the FCRA. Sometimes, state laws, may give the consumer more rights, when compared to federal laws.

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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