Fair Credit Reporting Act (FCRA)
The FCRA is a consumer protection law passed in 1970 to regulate how credit information can be collected and used. It was designed to protect consumers from unfair or inaccurate credit agency reporting and unauthorized access to their data. The FCRA also sets guidelines for how creditors must report account activity, including delinquent payments, to credit bureaus.
According to the FCRA, consumers can obtain their credit report from the three major credit bureaus once per year for free. It also includes provisions that give consumers the right to dispute incorrect information on their reports and have it corrected or removed. Furthermore, the FCRA requires creditors to provide consumers with written notification of any negative information reported on their credit reports.
In addition, the Fair Credit Reporting Act provides consumers with greater control over who can access their credit information. It requires that anyone who wants to obtain a consumer’s credit report must have a permissible purpose, such as verifying employment, determining credit worthiness for a loan or other transaction, or evaluating an individual for insurance.
What Is a Credit Bureau or Credit Reporting Agency?
A credit reporting agency collects and compiles information about how individuals manage their financial accounts and obligations. The bureau collects data to generate an individual’s credit report, which lenders use when deciding whether to approve a loan or other financing.
Credit bureaus collect data from various sources, including lenders and collection agencies. They compile the information into an individual’s credit history, which is then used to calculate a credit score. Credit bureaus provide other services also, such as identity theft protection and credit monitoring, and access to credit reports. Equifax, Experian, and TransUnion are the primary credit bureaus in the United States.
Does The FCRA Regulate Banks and Credit Card Issuers?
Yes, banks and credit card issuers are regulated by the Fair Credit Reporting Act (FCRA). This law was passed in 1970 to protect consumers from unfair or inaccurate reporting of their financial information. Banks and credit card issuers must follow specific regulations when collecting, using, and sharing consumer data. These regulations include providing timely notice to consumers, ensuring accuracy in credit reporting, and allowing consumers to dispute errors on their credit reports.
What Are the Obligations of Credit Reporting Agencies Under the FCRA?
Credit reporting agencies are required to follow the provisions of the Fair Credit Reporting Act (FCRA). Under this Act, they must:
Access to Credit Reports
You can obtain one free copy of your credit report from each of the three major credit reporting agencies – TransUnion, Equifax, and Experian – every year. To get yours, go to annualcreditreport.com and provide proper identification. Your reports should arrive within 15 days.
How Can I Obtain My Credit Score?
The free annual credit report does not include the credit score, but consumers can obtain their credit score by various methods like subscribing to a credit monitoring service, requesting a free score from the credit provider, or purchasing it directly.
Limiting Access to Credit Reports
The FCRA regulates who can access your credit reports and when they are allowed. An inquiry is made on your credit file whenever somebody with a permissible purpose (e.g., new creditors or employers) looks at it. In the past, consumers have filed successful small claims lawsuits against those who have looked at their credit files without having a permissible purpose.
The FCRA also includes other provisions to help protect consumers’ privacy. For example, it requires employers to seek permission from employees before running a credit check and allows consumers to place a fraud alert on their credit reports.
How Long Can Negative Information Stay on Your Report?
The FCRA has very specific rules about what goes on your report and how long each item is allowed to stay there. Generally, negative items such as late payments, bankruptcies, and collections can be included in your report for up to seven years. In some cases, they may remain indefinitely. Positive information, such as on-time payments and accounts in good standing, are typically reported for ten years.
What Happens If You Dispute a Negative Item Listed on Your Credit Report?
Once you dispute a negative item on your credit report, the credit reporting bureau responsible for maintaining the report (Equifax, Experian, or TransUnion) will investigate the claim. The investigation should take no more than 30 days to complete. During this time, the creditor who reported the information is required to conduct their investigation and provide verification of the item to the credit bureau.
It’s important to note that even if a dispute is successful, you won’t see any immediate changes to your credit score. It can take up to two months before the dispute process is complete and you see an improvement in your score.
Additionally, if you have several negative items on your report, it may be beneficial to contact a credit repair company specializing in removing negative information from reports.
Is Medical Debt Included in Credit Reports?
Although the FCRA permits healthcare providers and their agents to share information about a consumer’s medical debt with credit reporting agencies (CRAs), privacy protections are in place. The FCRA requires that furnishers encrypt certain information before sending it to CRAs.
This ensures that the medical debt is not shared in a way that violates a consumer’s privacy. Additionally, CRAs must delete any medical debt reported as part of a credit report if the furnisher does not provide sufficient proof that it belongs to the reported consumer.
How Does Trifecta Credit Solutions Handle Credit Repair Cases?
At Trifecta Credit Solutions, we understand that credit reports can often be inaccurate. Our team of lawyers and paralegals has extensive knowledge and expertise to help you fix your credit report. We will carefully examine your credit reports for any errors. If we find any, we will gather the necessary information to challenge them and communicate directly with your creditors and credit bureaus on your behalf.
Our credit report strategies are never one-size-fits-all because we tailor them to each client. We send our clients a monthly analysis of their credit score and how to improve it. They can also monitor their case progress by logging into our online portal or mobile app.
How Can I Take Advantage of the FCRA Rights to the Fullest?
You have the right to improve your credit score, and the Fair Credit Reporting Act (FCRA) protects that right. The negative items on your credit report will remain if you don’t do anything. The only way to ensure that your reports accurately represent your creditworthiness is by pursuing FCRA rights or finding a reputable credit repair service to assist you.
Trifecta Credit Solutions uses your rights under the FCRA and other federal laws to help improve your credit score. We have successfully helped remove hundreds of negative items from our clients’ credit reports, including late payments, collections, charge-offs, and bankruptcies.