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Ensure Your Credit Report is Accurate – Fair Credit Reporting Act
The Fair Credit Reporting Act (FCRA) is a federal statute that gives consumers the right of
accurate credit reporting by creditors and credit bureaus. If you have been turned down for
credit you have a right to examine your credit report for free by writing to the credit
bureaus and requesting a copy of your credit report/file. The FCRA provides for a sixty
(60) day procedure in which you can dispute inaccurate information appearing on your credit
report/file and demand the credit bureaus contact the entity reporting inaccurate information
to verify the authenticity. If the entity verifies the inaccurate information as correct, and
the credit bureau continues to report the information you may have a right to money damages
under the FCRA.
Common FCRA Violations:
(1) Merged Credit - This occurs when two persons have similar identifying information or
characteristics. For example when a father and a son are Jr./Sr or mother and daughter
share the same name. It occurs with persons you do not know or are not related to. For
example, when someone else shares a social security number that is different by only one
or two digits. In the aforementioned examples, someone else's information may get merged
into your credit report, thus causing you to be denied credit.
(2) Inaccurate Information - Most common mistake made by credit reporting agencies is
where there is a "trade line" (description of credit obligation owed by you (example
mortgage or car payment)) that not accurate. For example, your car loan shows that you
have been late four (4) times or that your account is in repossession status. These
reports hurt you credit score when you attempted to obtain credit from another entity.
If any trade line is being reported inaccurately it is necessary for you to dispute the
inaccuracy with the credit bureaus. If they refuse to update or correct the trade line
within sixty (60) days of receiving your written dispute you may be entitled to money
damages under the FCRA. Attorney’s fees and costs of litigation are also recoverable
under this statute. The FCRA requires each of the nationwide consumer reporting companies
— Equifax, Experian, and TransUnion — to provide you with a free copy of your credit report,
at your request, once every 12 months.
Fair Credit Reporting Quick Links:
- How to Dispute Credit Report Errors
- Dispute Credit Letter Examples
- Summary of Your Rights Under the Fair Credit Reporting Act
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Fair Credit Reporting