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Written by Gaurav Bhola, MSM on August 26, 2008
A good credit rating is a critical contributing component of your overall financial picture. Your credit history can be accessed to evaluate your applications for credit, employment, loans, insurance, leases, and more. Depending on the status of your credit report and associated credit score, you can be approved or declined for services. Due to unanticipated circumstances, your credit can be negatively affected. Herein, you must be aware of your consumer rights to protect yourself. Sometimes, things happen that can cause credit problems: temporary loss of income, an illness, or computer error. Solving credit problems take time and patience, but it doesn’t have to be an ordeal. This article explains your rights under the laws and provides practical tips to solve credit issues.
Your credit report has detailed information about your financial credit history and more, including where you live, whether you’ve been sued, arrested, how you pay your bills, and or have ever filed for bankruptcy. Consumer reporting companies, such Equifax sell your personal credit information to businesses that use it to evaluate your applications for credit, employment, insurance, renting a home, leasing, and so on.
- The Fair Credit Reporting Act (FCRA) is federal legislation that promotes the privacy and accuracy of information held by the country’s consumer reporting agencies. Under Fair Credit Reporting Act guidelines: The right to receive an up-to-date and accurate copy of your credit report. The following information must be included in your credit report upon your request:
o The three consumer reporting agencies – TransUnion, Experian, and Equifax are required to give you a free copy of your credit report, upon your request, once every 12 months.
o Additionally, you are entitled to a free report if a company’s action adversely affects your credit. Actions include, but are not limited to denying your application for credit, employment, and insurance. You can request a report within 60 days of receiving notice of the action.
o IF you request additional reports from credit agencies, other than for reasons outlined in the FCRA, the credit agency may charge you for each another copy of your report within the calendar year.
- It is your right to know of anyone who requested your report within the past year and two years for previous employment related inquiries.
- If a company declines your application, under the law you must be provided the name and address of the consumer reporting agency they contacted and be offered the information upon which the denial was issued.
- You can contact the credit reporting agencies to challenge the accuracy, completeness of information contained within your report as well as request remedy of any inaccuracies. The credit agencies are obligated to investigate your requests and correct credit information as needed.
- You have a right to write an addendum explanation to your credit report if your dispute remains unresolved to your satisfaction. Also, you can request the consumer reporting agency to include your statement addendum with any request for a copy of your report. However, there is an additional fee for this service.
The review of your credit application is sacred; creditors can’t discriminate when evaluating your credit application. The Equal Credit Opportunity Act (ECOA) forbids discrimination in credit evaluations on the basis of sex, marital status, race, national origin, religion, age, or receipt of public assistance. If your application is denied, you have the right to know why.
Check your electronic funds transfers and credit billing statements frequently because these documents may contain errors that could negatively impact your credit status or reveal improper transfers or charges. Under the Fair Credit Billing Act (FCBA) and Electronic Fund Transfer Act (EFTA) you can inform the company and dispute the discrepancy immediately. There are established guidelines protecting your rights for remedy and accountability under the FCBA. Generally, the FCBA applies to “open end” or “revolving “credit/charge accounts. The federal law doesn’t apply to credit sales or loans paid according to a fixed schedule until the total outstanding amount is paid back, such as a car loan.