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The Fair Credit Reporting Act: 11 Important Rights

the fair credit reporting act

The Fair Credit Reporting Act: 11 Important Rights
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The Fair Credit Reporting Act: 11 Important Rights

The Fair Credit Reporting Act is the legal law that regulates and monitors the credit reporting process. According to the JD Supra, the cases filed through FCRA is 5,406 and it is a 3.5% increase from the year 2020. Credit reporting agencies or loan providers should follow certain guidelines from the fair credit reporting act while collecting information. This law can prevent customers from being the victim of data theft. Keep reading this article to know your rights respective to credit reporting. 

The Fair Credit Reporting Act

The primary federal law that deals with credit reporting are known as the Fair Credit Reporting Act (FCRA). The fair credit reportinga ct (FCRA) gives customers a lot of protection to safeguard their credit. 

Credit reporting can often be the source of a lot of stress. If you are currently battling bad credit or if there are errors on your credit reports. Even if the credit problems you are facing are not your fault, they can still make your life a lot harder than it needs to be. Being turned down for loans, paying higher interest rates, or putting down hefty deposits for financing and services is all par for the course when you are dealing with credit issues.

The good news is that you do have extensive rights when it comes to your credit reports. Credit reporting agencies, creditors, and debtors are not allowed to simply act as they deem fit when reporting information about you or disclosing your information to others. Instead, credit reporting is strictly regulated.

11 Rights of the Fair Credit Reporting Act

Being a credit user, you have a number of rights to protect your private data and prevent credit fraud. Here are some of those rights. For detailed information on the Fair Credit Reporting Act rights, check out the Consumer Finance site

  1. You have the right to know if the information in your file is used against you. 
  2. You can reach out to credit reporters to know your credit score.
  3. You can claim to remove inappropriate or unverified information from your credit. 
  4. Credit reporters has limited access to your data, they can only share your data for valid reasons. 
  5. Before sharing your credit report details with your employer, they must get consent from you. 
  6. Through the toll-free number 1-888-567-8688, you can request them to remove the details that some prescreened offers are based on. 
  7. You have the right to legally proceed with the case if credit reporters or loan providers violate the FCRA law
  8. You have the right to know what are the details provided in your file. 
  9. You can limit the access to your reports
  10. Credit reporting agencies cannot let a negative impact on the file more than the time limit. 

Among the list of rights stated by the fair credit reporting act, let us discuss a few in detail. 

The Right to See Your Own Credit Report

Thanks to the FACTA amendment to the Fair Credit Reporting Act (FCRA) because it gains free access to all 3 of your credit reports annually. To claim these freebies simply visit Sadly, although these free reports have been available for more than a decade and a half, only about 4% of the reports are claimed on an annual basis. Staying aware of the information contained in your reports is an essential step to earning the great credit to which you aspire.

Limited Access to Your Reports

The Fair Credit Reporting Act also dictates who is allowed to access your credit reports (sometimes with and sometimes without your permission). Your ex-sister-in-law, for example, is not permitted to legally pull up a copy of your credit reports just because she feels like it. Companies that have a “permissible purpose” to see your credit reports are outlined in detail under the Fair credit reporting acA. Here are a few of the most common examples of those who have the right to access your reports.

  • Lenders (When you fill out a loan application)
  • Insurance Companies (When you apply for a policy)
  • Employers (Your written permission is required.)
  • Anyone with a Court Order
  • Others with a Legitimate Business Need to See Your Credit (Landlords, Service Providers, Etc.)
  • Companies Who Intend to Send You a Firm Offer of Credit or Insurance (Think pre-approved credit card offers.)

Time Limits on Credit Reporting

Of course, if you owe a legitimate bill then you should probably pay it if you are financially able to do so. Yet most people who are facing credit issues did not wind up in such a position purposefully. You probably did not take on a mountain of credit card debt, for example, with the intention of defrauding your credit card issuer and not paying your bill. Most of the time bad credit instead is a result of unfortunate circumstances or bad choices, but not premeditated dishonestly.

On the bright side even if you have messed up, past credit mistakes are not allowed to remain on your credit reports forever. Instead, most derogatory items are required to be removed from your reports after either 7 or 10 years. Here is a quick rundown of the credit reporting limitations you enjoy thanks to the Fair credit reporting act (FCRA).

The 7-Year Removal Crew

  • Collection Accounts (Removal required after 7 years from the date of default on the original account.)
  • Late Payments
  • Charge-Offs
  • Judgments (Both Paid and Unpaid)
  • Repossessions
  • Foreclosures
  • Paid Tax Liens (Unpaid tax liens can remain forever.)
  • Etc.

The 10-Year Removal Crew

  • Chapter 7 Bankruptcy (Removal required 10 years from the date filed.)
  • Chapter 13 Bankruptcy (Removal required 10 years from the date filed or 7 years from the date of discharge. In most cases Chapter 13 BKs remain for a full 10 years.)

Also, Read

Frequently Asked Questions

How long will a negative report stay in your credit report?

The time duration differs based on the factor that is impacting the credit score. Most of the impacts stay in your report for 7 years, while bankruptcy may take up to 10 years to fall off from your credit report. 

What is the Fair Credit Reporting Act (FCRA)?

The Fair Credit Reporting Act is a federal law that deals with the regulation of the credit reporting process. This law ensures the fairness of the process and makes sure the customers are free from identity theft or data breaches.  

How long will it take for a hard inquiry to fall off? 

Though the average time limit is around 7 to 10 years, some simple factors like hard inquiries will take only 2 years to fall from your credit report. 

Final Thoughts

As most credit holders are not aware of the rights they possess, this article would have helped them with some unknown rights they have on their credit report data. If you are a credit user who isn’t aware of credit stuff, it is fine to rely on the credit reporting agency or a credit bureau to get support. Still, make sure of the rights you deserve as an individual on your data. You have all the rights to know what is in your report and ask for the details anytime. 

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