The most important right guaranteed by the FCRA is that consumers can order a full copy of their credit report from any credit reporting agency. At first, consumers had to pay for these credit reports, but under the Fair and Accurate Credit Transactions Act (FACTA) amendment, everyone is entitled to one free copy of his or her credit report every 12 months from each of the big three CRAs.
Also, if information on a credit report was used to deny you credit, the FCRA says you have a right to a free copy of that report from the CRA in question. The FCRA also gives you the right to tell your side of the story regarding a negative credit event and adds your description to the credit report. And with the FCRA, negative events stay on the report for a maximum of 10 years.
Under the FCRA, you also have the right to correct erroneous information on your credit report. Some of the most common mistakes include information from someone else with the same name being filed with your report or a closed credit account listed as open on your report. The FCRA has an established procedure for reporting, investigating and correcting errors.
The FACTA amendment to the FCRA also includes important protections against identity theft:
- If you suspect identity theft, a fraud alert can be placed on your account at the big three CRAs. The alert can last from 90 days up to seven years. While the alert is active, any applications for credit under your name require phone confirmation through a number you provide.
- When you place a fraud alert, you're entitled to two free copies of your credit report during the next 12 months.
- No merchant receipts can contain your entire credit card number and expiration date -- only the last four digits of the number. And, no mailed documents can contain your entire social security number.
- All copies of consumer credit reports must also be properly destroyed after use.
- Victims of identity theft have the right to copies of all credit and loan applications that were fraudulently made in their names.
- FACTA insists that lending institutions agree on red flags that could be signs of fraudulent activity, including requests for a replacement credit card, change of address or reactivation of an old credit account
According to the FCRA, a credit report can only be shared with certain parties in certain situations, including:
- Applications for credit, insurance and home or apartment rentals
- Professional licensing
- Legitimate business needs initiated by the consumer
- Periodic account review from banks and other financial institutions
- Employment review (only with written consent of employee or job applicant)
- Calculation of child support payments
- By court order
- By law enforcement and government intelligence agencies
Medical and health information is protected by the FCRA. No credit report containing medical information can be shared with creditors, particularly insurers, without your written permission.
As private companies, CRAs sell consumer information for affiliate marketing purposes. That's why you receive letters from credit card companies saying you're preapproved for their cards. The FCRA and FACTA let you to opt out of these prescreening offers and remove your name from affiliate marketing lists by calling 1-888-5-OPTOUT. This number is also included on all prescreening credit card and insurance offers.
The FCRA is designed to protect your credit, and you should be aware of your rights. For more information on credit reporting and related topics, follow the links on the following page.
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More Great Links
- "A Century of Consumer Credit Reporting in America." Federal Reserve Bank of Philadelphia. 2005.http://www.phil.frb.org/files/wps/2005/wp05-13.pdf
- "Credit Scores: What You Should Know About Your Own." The Secret History of the Credit Card. PBS Frontline. http://www.pbs.org/wgbh/pages/frontline/shows/credit/more/scores.html
- "The Fair Credit Reporting Act (FCRA) and the Privacy of Your Credit Report." Electronic Privacy Information Center (EPIC)http://epic.org/privacy/fcra/
- "Help for Identity Theft Victims." Privacy Rights Clearinghouse.http://www.privacyrights.org/fs/fs6a-facta.htm#2
- Knes, Michael. "Commercial Credit Reporting." Reference for Business Encyclopedia. <http://www.referenceforbusiness.com/encyclopedia/Clo-Con/Commercial-Credit-Reporting.html
- "One in four credit reports has serious errors." Associated Press. 17 June 2004. <http://www.msnbc.msn.com/id/5235161
- "A Summary of Your Rights Under the Fair Credit Reporting Act." Federal Trade Commission.http://www.ftc.gov/os/statutes/2summary.htm
- "Using Consumer Credit Reports: What Employers Need to Know." Federal Trade Commission.http://www.ftc.gov/bcp/conline/pubs/buspubs/credempl.shtm