Fair Credit Reporting ActPoor credit score report on wrinkled paper with pen and keyboard

Your credit score has taken a hit and you believe it is because inaccurate information is being supplied by a creditor. You are not alone.

According to the 2020 Consumer Credit Reporting survey, 26% of survey participants found at least one error in their credit reports. After correcting the errors, 13% of participants saw an increase in scores from at least one of the three agencies. Of those, 40% said the increase was 20 points or more.

You have legal rights under the Fair Credit Reporting Act, which guarantees your right to both privacy and accurate credit reporting. If incorrect information is sent to one or all three of the credit bureaus it will impact your credit score. This lessens your chance of obtaining credit and increases what you pay in interest rates, etc.

How do you know if your problem is significant enough to necessitate hiring an attorney? Keep reading for everything you need to know about the Fair Credit Reporting Act.

Violations of the Fair Credit Reporting Act

If you have not taken a look at your credit report lately, now is it time to do so. Violations often occur in the following areas:

  • Submission of information to a credit reporting agency that is incorrect
  • Failing to conduct an investigation about a dispute within 30 days
  • Failing to provide the results of an investigation
  • Not correcting inaccurate information
  • Applying late fees to debts paid on time
  • Reporting credit information older than seven (7) years
  • Reporting bankruptcy information older than ten (10) years
  • Distributing credit information even though there is evidence of identity theft
  • Reporting a previously settled debt

If a business or credit reporting agency is in violation of your rights, you may have a cause for legal action to recover damages you incur.

Your Rights Under the Fair Credit Reporting Act

The Fair Credit Reporting Act (FRCA) regulates how banks, agencies selling information about your credit history, medical records, rent history, check-writing history, and any company that uses credit reports for hiring decisions use your information. The law also applies to credit reporting agencies, with Experian, TransUnion, and Equifax being the main three.

Credit reporting agencies have an obligation to make sure that anyone they release your information to has a valid reason for receiving it. Valid reasons include applications you file with a creditor, employer, insurer, landlord, or other business. Your rights under the FRCA include the following.

Right to Be Informed if Information Is Used Against You

If your consumer information, personal information, or credit report is used for the purpose of taking adverse action against you, the business must advise you of the name, address, and phone number where the information came from. This applies to any situation where you are denied credit, insurance, or employment.

Right to Know What Is in Your File

By providing sufficient identification, which may include your Social Security number, you are entitled to a complete file disclosure of all information a credit reporting agency has on you. The agency may charge a fee if there is no adverse action against you.

You are allowed to request a free annual credit report from each of the three main credit agencies, including your credit score. One easy and free way to keep track of your reports from TransUnion and Equifax is to sign up for Credit Karma. This free service provides you with monthly updates on your score, full access to your record, and instructions on how to file a dispute if you do not agree with the information on your report.

Right to File a Dispute

During a review of your credit bureau report, if you find any discrepancies you have a right to dispute those errors. Things as minor as your name being misspelled to incorrect payment status or accounts that are not yours can impact your credit.

Even if a negative event is somewhat accurate but there is “more to the story” than shown on the report, you have the right to submit a note of explanation. For instance, if your account was submitted to collections because of an accounting error, not lack of payment, you need to file a dispute.

Right to Removal of Inaccurate, Incomplete, or Unverifiable Information

If there is information on your credit report that is incomplete, inaccurate, or cannot be verified, the credit agency has an obligation to correct, complete, or remove it within 30 days of when you file a dispute. To keep your credit report current, it is important to review its contents regularly. If there are discrepancies promptly file a written complaint by certified mail with every credit reporting agency.

Right to Removal of Outdated Negative Information

Credit agency reports may not contain negative information that is more than seven (7) years old. They must also remove bankruptcy information that is more than ten (10) years old.

Your credit report does not include criminal convictions. If a criminal conviction impacts your ability to obtain employment or housing, that business is conducting a background check on you in addition to your credit report.

Right to Limit Access

To prevent your information from being freely distributed, both current and potential employers are not allowed access to your credit report without your written consent. There are exceptions to this rule for certain industries.

You can opt-out of having unsolicited offers accessing your report for the purpose of pre-screening. You can also place a security freeze on your credit report, which means nothing receives approval without your consent. The offset is that if you apply for credit there will be a delay in processing your application.

Instead of a security freeze, you may wish to place a fraud alert on your credit report. This requires businesses to verify your identity before extending new credit to you. If your account experiences a security breach, an extended alert of seven years will provide you with additional protection.

Right to Seek Damages

The list of rights above is not all-inclusive. Depending on the state where you live, you may have more rights. If you believe your rights have been violated, you may be able to receive compensation in either state or federal court.

An FCRA attorney is familiar with all FCRA laws and the litigation definition. They will have the legal knowledge and experience to know if there are one or more violations of your rights and how to take steps to remedy the damage done.

Should Your Hire a Fair Credit Reporting Act Lawyer?

An attorney who specializes in the Fair Credit Reporting Act will be able to write dispute letters that demand action. They will know how to identify incorrect information and how to cite your legal rights under the law. They will likely have access to the lawyers who represent Equifax, TransUnion, and Experian.

The best action you can take when you believe your rights are violated is to schedule a consultation with an attorney. They will be able to provide you with a legal assessment of your case.

If you find the information in this blog helpful, we invite you to check out other blogs on our website. We provide a wide range of information and you will likely find more topics of interest.

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