5 things you need to know about the Fair Credit Reporting Act

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Know what your rights are as a consumer.

Key Point

• Your credit report and history can play a big role in your finances.
• The Fair Credit Reporting Act is designed to help protect consumers in multiple ways.
• FCRA gives you free access to your credit report and, among other things, the ability to dispute any inaccuracies in it.

Your credit report may be one of the things you don’t think about very often. But really, it’s a pretty important gathering of information.

Lenders usually rely on credit checks to decide whether to lend money to a particular candidate and the borrowing rate. That’s why it’s important to know what your credit report looks like and what rights you have to control it.

That’s where the Fair Credit Reporting Act comes in. The FCRA is intended to protect consumers and give them good control over their credit reports. Here are just a few of the protections you should know about.

1. You can check your credit information for free

As a consumer, you are entitled to receive one free credit report every 12 months from each of the three major credit bureaus: Experian, Equifax and TransUnion. You should also know that checking your own credit report will not hurt your credit score. You can also access free weekly reports through the end of 2023.

2. We cannot withdraw your credit report without valid reason and consent.

If you’re applying for a mortgage, car loan, or credit card, the lender or credit card company in question will need to check your credit report to make sure you’re a reliable borrower. . But while it’s fine for these agencies to check your credit report, it doesn’t mean that an old business can pull your credit report and look around. Even if you’re in the middle, you still need to give the lender or company you’re applying for permission to access your credit report.

Please note that if your credit report is pulled for borrowing purposes, it counts as a difficult investigation. .

3. Credit bureaus must take disputes seriously

In the process of reviewing your credit report, you may come across information that does not appear to be correct. If you come across an error, we encourage you to report it to the agency that issued the report. The agency must then investigate and respond to your dispute within a reasonable period of time. Usually he is 30 days.

4. Negative information cannot remain on your credit report indefinitely

Not everyone has a perfect credit history. But yours should only hold you back for the long haul. Under the Fair Credit Reporting Act, credit bureaus are required to remove negative information from credit reports after a period of time (the exact amount depends on what is reported). For example, foreclosures must be removed from your credit report after seven years.

5. You have the right to freeze your credit report

Freezing your credit report can prevent criminals from opening new loan or credit card accounts in your name. If you have reason to believe that your personal information has been compromised recently, it may cost you enough to freeze your credit. You can unlock it when you apply for a loan or credit card.

Reading the Fair Credit Reporting Act might not seem like the most fun weekend activity. But as a consumer, it’s important to know your rights. So you might want to learn at least a little bit about the credit protection you’re entitled to.