Vision Credit Education, Inc.

The purpose of this federal law is to regulate the collection, distribution and use of consumer credit information. It’s designed to promote the accuracy, fairness and privacy of consumer information held by consumer reporting agencies. This act guarantees the consumer several rights.

The main rights are:

You must be notified if information in your file has been used against you. If your credit report is used to deny your application for insurance, employment, credit, etc., you must be told and given the name, address and phone number of the agency providing the information about you.

An important exception to this right is an insurance agency’s ability to use credit reports to set your insurance rates. It’s possible that an insurance company may give you a higher rate because of a bad credit report. If this is the case, the insurance company does not have to tell you about it.

So, this is an example where your credit report can be used against you (giving you higher insurance rates), and the FCRA does not make sure you know about it. To protect yourself, ask insurers how they set rates and keep tabs on your credit. Luckily, other rights granted by the FCRA make information about your credit easily accessible.

You have a right to know what’s in your file. You are allowed to request information about your credit from a consumer reporting agency if: someone has used the information against you (as mentioned above), you are the victim of identity theft, your file contains inaccurate information, you’re on public assistance or you’re unemployed at the moment but plan to apply for a job in the next 2 months.

Also, even if you do not fall into any of those categories, all consumers are entitled to a free credit report from each of the three major credit reporting agencies – TransUnion, Equifax, and Experian – once a year.

You have a right to know your credit score. A credit score is a number that represents your creditworthiness, which is determined by the information about you in your credit report. You usually have to pay for a credit score. However, some mortgage lenders will let you know your score for free.

You have a right to dispute incorrect credit information, and the credit reporting agency must correct or delete it. According to a study conducted by the U.S. Public Interest Research Group in June 2004, 79% of the credit reports surveyed had some kind of error or mistake. This right granted by the FCRA allows consumers to correct any mistakes they may find in their credit reports, and the credit reporting agency must correct them within 30 days of notification. However, if the agency can verify the information is correct, it will continue to report it.

Credit reporting agencies cannot report outdated negative information. This is good news for the consumer because it means our mistakes do not stay with us forever. Usually, a reporting agency cannot report negative information that is seven years old or bankruptcies that are more than ten years old.

Not everyone has access to your file, and employers must have your permission. Only those with a legitimate need for such information are allowed access to it. This ensures the privacy of your information. Also, employers are only allowed access if you grant it to them.

You can stop “prescreened” offers of credit and insurance. Most of us have received unsolicited credit card offers in the mail at one time or another. There is a way to take your name and address off the lists these companies use to find you. These offers must include a toll-free phone number you can call to remove yourself from the list.

You have the right to seek damages from FCRA violators. Since the FCRA is a federal law, any violators of it may be sued in state or federal court.

These are the basic rights granted to consumers by the Fair Credit Reporting Act. It doesn’t hurt to take advantage of the free credit report available from the major credit reporting agencies and check the accuracy of all the information available about you. Studies have shown that a majority of reports contain errors. Even though employers must ask your permission for access to your file, insurance agencies do not. When it comes to your credit, it pays to know.

Related Links

Definition: Fair Credit Reporting Act

Definition: Fair and Accurate Credit Transactions Act