Credit Rights

The FCRA and Your Credit Rights

The Fair Credit Reporting Act or the FCRA, contains the most comprehensive information regarding your credit rights. The FCRA was enacted in 1996 and amended in 2001. This act is designed to govern consumer credit reporting agencies to ensure the accuracy of consumer credit reports. Other acts that involve your credit rights are the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act) and the Fair and Accurate Credit Transactions Act of 2003 (FACT Act).

The FCRA and FACT Act

The FCRA and FACT Act govern the issuance and uses of your credit report as well as your credit rights.

• According to the FCRA and FACT Act, your credit report may be issued for the following reasons:
  • By court order, such as subpoenas or if you are involved in a situation that concerns a Federal Grand Jury.
  • If you personally request a copy of your credit report.
  • Employment purposes.
  • If you have requested an extension of credit such as a credit card or loan.
  • The review or collection of an account by a creditor.
  • Insurance underwriting purposes.
  • When applying for state and/or federal licensing.
  • By state and local child support enforcement agencies.

• You are entitled to a free credit report for the following reasons:
  • One time per year from the three major credit reporting bureaus: Experian, Equifax and TransUnion.
  • If you have been denied credit, insurance and/or employment due to the information contained in your credit report. You have 60 days from the time of the adverse action to request a free copy of your credit report.
  • One time per year if you are on welfare.
  • In any cases of fraud and/or identity theft.
  • Once per year if you are unemployed and plan on looking for employment within the next 60 days.

• Other rights regarding your credit report are as follows:
  • You're entitled to know who has requested a copy of your credit over the last year and for two years if your credit report was requested for employment purposes.
  • If an adverse credit action has been taken against you due to the information contained in your credit report, you have the right to know the name and address of the credit reporting bureau(s) that supplied the information for which the adverse decision was based upon.
  • If you believe the information contained in your credit report is inaccurate or erroneous you have the right to file a dispute with the creditor and the credit-reporting agencies. The creditor and the credit reporting agencies are obligated under the FCRA to investigate your disputed claim.
  • If, through a dispute, inaccuracies are discovered, it is the responsibility of the credit reporting agencies to correct the inaccuracies.

Prohibited Credit Report Information and Uses

Any credit report containing medical information cannot be used in conjunction with transactions involving the extension of credit. This information may be furnished for employment or insurance purposes if any of the following conditions apply:

1. You specifically permit the insurance company to obtain your medical information.
2. If your medical information is relevant to your prospective employment.
3. Specific medical services, procedures or devices cannot be disclosed on your credit report. Creditors may only report account balances, the status of the account(s) and the date the account was opened.

Adverse Credit Information

• Any adverse credit information such as late payments, collections and charge-offs, remain on your credit report for 7 years from the date the account was placed in collections or charged off.
• Chapters 7 and 11 bankruptcies stay on your credit report for 10 years after the date it is discharged.
• Chapter 13 bankruptcies remain on your credit report for 7 years after the date it is discharged.
• Civil judgments and civil suits remain on your credit report for either 7 years or when the statute of limitations has ended. The longer of the two periods is used to determine the length of time the information is reported on your credit report.

The USA PATRIOT Act

The PATRIOT Act is 342 pages long and covers many different issues from counter terrorism to securing the nations borders. As far as credit rights go, there is one main issue.

• The federal government has the right to freeze, seize and investigate thorough means of wiretaps, electronic or oral communications, any and all of your medical and/or financial information or any other personal information the government deems pertinent, if you are suspected of any acts of terrorism.

Federal government officials can't just go around requesting all sorts of private and personal information at will. They must first obtain explicit permission from either the Deputy Director of Intelligence, the Director of the FBI or the Official-in-Charge of Intelligence.

Final Thoughts

The FCRA, USA PATRIOT Act and FACT Act are all relatively new laws, and as different needs of both the government and the consumer change, so too do the laws. Keep abreast of any changes or amendments to these acts by periodically visiting the U.S. Federal Trade Commission website. By doing so, you will always be aware of your rights regarding your credit as well as your rights as a consumer.