Why does the FCRA encourage consumers to fix bad... - Limited/Bad/Fair Credit Questions


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Credit Card Applications » Questions » User Questions » Limited/Bad/Fair Credit » Why does the FCRA encourage consumers to fix bad credit?

Why does the FCRA encourage consumers to fix bad credit?

Answered on | Updated on December 19th, 2010
The content is accurate at the time of publication and is subject to change.

The federal fair credit reporting act or FCRA was established to safeguard the right to give credit to the people. All credit reporting bureaus must abide by the laws of the FCRA. The FCRA encourages consumers to repair bad credit in order to get back to mainstream credit practices.

As a consumer, you should read the laws in order to understand your rights with regard to credit. The first and foremost thing to do as a consumer is to find out the information in your credit file.

All banks and lenders will first check your credit report to establish whether or not you are eligible for a loan. If you file contains a lot of poor credit scores, you will most definitely be turned down. If not, your loan will be approved but with a very high interest rate due to your low credit score. There are many cases where the credit scores are mistakenly entered into your file and the bank will receive these fallacious reports. At the end of this, you will be the sufferer as you cannot take recourse in time to get a loan for the item or service that you wise to purchase. Hence it is important to periodically check your credit score for mistakes. It is your right, assured by the FCRA that you can check your credit score whenever you want by applying to the credit bureau.

There are a number of benefits to having good credit. Any and every creditor these days wants to see a good credit report if not a spectacular one given that many of their customers are now defaulting on their payments, given the economic crisis that has gripped the united states. The credit score is the first thing that will be checked when you apply for a loan and it is the most important thing at that. You can rectify this by doing a credit repair.

A consistent set of good credit scores will be a green light for any and every creditor. If they see this on your record, you will be respected and they will consider you as a no risk or a low risk borrower and this will make you eligible for very low rates. But if you have a bad credit, your value will drop significantly in the eyes of the lender. The creditor will turn down your loan application. Even if you do manage to get one approved by a shoddy creditor, you can be sure that you will not get a good rate on the loan. Planning your financial future can become very difficult if you do not check your credit and get it fixed in time.

The mechanism for checking your scores is not just for information but to correct any errors that may exist. On finding that you have bad credit, you must immediately file a complaint if there is an erroneous report. But if you really have bad credit you can work on it immediately by making payments on your loans that are in arrays or making payments on those insurance plans that you failed to pay. Even traffic tickets can add up to bad credit. You can also hire a professional who specializes in credit repair to assist you.

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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