Unfortunately credit report errors and identity theft are no longer rare occurrences these days. While credit report problems are not uncommon, the average person is still unaware that they are protected against unfair credit reporting methods by the Federal Fair Credit Reporting Act (FCRA).

The Fair Credit Reporting Act (FCRA) For Consumer Credit Worthiness

The FCRA and the Fair Debt Collections Practices Act together form the basis of the American consumer credit system. Enforced by the Federal Trade Commission in 1970, the Fair Credit Report Act is federal law and grants consumers certain rights to protect them from unfair credit reporting methods.

Consumer Reporting Agencies And Credit Report Errors

The credit reporting act governs all consumer reporting agencies in the country, which includes the three major credit bureaus and other specialty agencies that report rental, check writing and medical histories. Credit report errors made by these consumer reporting agencies often affect a consumer’s credit standing and without the credit reporting act rights, the consumer would have no way of fighting back against unfair credit reporting methods.

The FCRA – Credit Reporting Act Rights

As per the Federal Trade Commission’s Fair Credit Reporting Act, every consumer has the right to dispute inaccurate credit reports. Therefore, in order to help a consumer regain their credit standing, they have certain credit reporting act rights. Some of the major consumer rights are:

• The right to know what is included in your credit file. Since 2005, every consumer has the right to request a free consumer credit worthiness report from consumer reporting agencies annually.
• If an entry in your consumer report is used to take action against you such as being denied further credit or employment, the Fair Credit Reporting Act entitles you to obtain the details of the consumer reporting agency that provided the information.
• To determine your credit standing, you may request a credit score from one of the consumer reporting agencies. However, a fee will be charged for this.
• As per the FCRA, a credit report error can be disputed by a consumer at any time. In order to comply with fair and accurate credit reporting standards, consumer reporting agencies are required to investigate the issue when a consumer claims credit report errors.
• If credit report errors are found to be true, consumer reporting agencies are required to immediately delete the information from the consumer’s report and re-establish their credit worthiness.
• Credit bureaus and other agencies are required to correct inaccurate credit reports and always use up-to-date and verified information to determine a consumer’s credit standing.
• The FCRA explicitly specifies those who might need access to a consumer report; i.e. creditors, insurers, landlords etc. Consumer reporting agencies may provide information only to these and protect your credit report from all others.
• The Fair Credit Reporting Act instructs consumer reporting agencies that they must seek a consumer’s permission before providing credit reports to employers.
• Consumers have the right to limit and eliminate pre-screened credit offers.
• If a credit reporting agency is found guilty of unfair credit reporting methods or a user of the credit report information does not comply with the Federal Trade Commission requirements, the Fair Credit Reporting Act Rights allows a consumer to sue for damages.
• The Fair Credit Report Act has special provisions for victims of identity theft.

Some states have incorporated the FCRA while others have their own credit reporting act – each giving a consumer the right to fair and accurate credit reporting and protecting them from unfair credit reporting methods and credit report errors.