Well, maybe you don’t need to know everything about the FCRA, which stands for Fair Credit Reporting Act but you should at least have a little bit of understanding on what it means to you as a consumer. The FCRA was signed into law in 1970 and has had numerous amendments added since that time. Before the law was passed, credit reporting agencies really had no regulations to follow. Well, now they do. In fact the Federal Trade Commission is now the overseer and they definitely have been taking their job quite seriously.

The meat and potatoes of the FCRA is that now the use of consumer information and more importantly consumer credit information is now regulated. This also includes how the information is disseminated.

Consumer reporting agencies now have accountability in regards to your credit information. In fact they now have some major responsibilities. Let’s take a quick look at those.

  • The Reporting Agencies now must provide a consumer the information that is kept on file. They now must, upon request, furnish a free copy of an individual’s credit report once every 12 months. They must also take the necessary steps in order to verify any information that arises out of a dispute that a consumer may file in regards to information that is not accurate. This alone is one of the key features of the legislation. You’ll most likely agree if you’ve ever had to dispute inaccurate information that you’ve found in your credit report.
  • Credit reporting agencies no longer may reinsert negative information into a person’s credit file that was removed due to a consumer complaint unless they notify you, in writing, within 5 days of the addition.
  • Credit Reporting Agencies now have guidelines for how long they may retain negative information on you. This could include late payments, judgments, any type of tax liens and bankruptcies. Under the FCRA, most will be removed after 7 years, bankruptcies after 10.

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And it’s just not the Credit Reporting Agencies that have responsibilities under the FCRA, lenders and creditors also fall under the legislation. Take a look:

  • First of all they must provide complete and accurate information to the credit reporting agencies. Now to be blunt, we all know that mistakes happen.
  • The duty to investigate these mistakes falls on them and they must correct a mistake or furnish documentation establishing that the information is correct to the credit reporting agency within 30 days of receiving a notice of dispute. No longer does this become a long drawn out process.
  • They also have the responsibility to inform you that negative information is about to be placed into your credit report. This may give you some time to react accordingly.

Hopefully now you have just a little bit better understanding of the FCRA and how your information is now collected. Should you need to study the FCRA further, you can access the complete legislation at the Federal Trade Commissions website.

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