If you are in debt, dealing with creditors, or know people in these situations–understanding the fair credit reporting act is a must. This law protects debtors from common illegal practices. Knowing the law and your rights is the first step to protecting yourself.
In basic terms the Act is a Federal Law designed to regulate the collection and use of consumer information and it is at the heart of consumer credit rights in the U.S.
The data that is collected and used to assess the credit worthiness of an individual is gathered from a variety of sources such as banks, lenders and a number of authorized Consumer Reporting Agencies and they have a duty of care under their license to accurately hold and maintain a database of information about each individual consumer.
Type of data held about you
The agencies gather information about your payment history, including what loans you have applied for, how many credit cards you have and the outstanding balance on your finance agreements. There are strict regulations governing these agencies that require the data to be accurate especially as any negative data held against your name such as late payments, previous bankruptcies, tax liabilities or court judgments will obviously effect your ability to obtain a loan or a mortgage.
Check the data held regularly
You can subscribe to a credit reporting service where you get regular access to your updated credit file to check for accuracy. This helps you avoid any potential fraud like if someone has tried to use your identity to obtain credit. You can actually gain a free copy of your report on an annual basis through a government run website at https://www.annualcreditreport.com/ This is strongly advised as a minimum check to ensure all the information held about you is correct and will alert you of any potential problems or errors.
High volumes of data are simply incorrect
A startling statistic that should alarm all consumers is that a research group carried out a survey on the accuracy of data held about consumers and found that an incredible 79% of the reports that they checked with the individual concerned contained some form of error or inaccuracy.
Every consumer is notified in writing about any negative information that is going to be applied to their report such as a late payment or default so you should already be aware if there is bad news posted on your file
What to do about incorrect or disputed information
Most states in the U.S have slightly different ways of resolving any issues but essentially you have to go through a third party rather than go directly to the main information providers -Experian, TransUnion and Equifax. The information that they collate comes from your lender so if you see details that are wrong you should contact the company and ask them to apply a correction to your credit file. You can use the government resource at www.e-oscar.org to help you contact the credit bureau and help you correct information that is wrong although you will of course have to provide evidence to support your claim.
Fair credit reporting is designed to assist lenders in making decisions about your ability to pay based on your past performance, so make the most of the resources available to you and check for accuracy as regularly as possible.
About the Author
Hayley Russell is a freelance forex currency trading writer for Sunbird FX. Details on silver trading online can be found at SunbirdFX.com. All views and opinions expressed are those of the writer and do not necessarily represent Sunbird FX.