What Do We Need to Know About the Fair Credit Reporting Act?

The FCRA or the Fair Credit Reporting Act has been a common term these past few years. Thanks to the growing number of creditors in the mainstream credit market, the Federal Trade Commission must take steps to improve the process of availing loans and in the process of paying it.

The FCRA can be thought of as a group of consumer rights wherein the main goal is to give the debtor a better experience in availing credits. Under this law, Consumer Reporting Agencies (CRAs) are obliged by the law to the following:

- CRAs, institutions which collect the credit history of debtors that they
consequently sell to lenders and other concerned entities, are supposed to take stringent measures towards assuring its client of the accuracy of their reports.

- Under the Fair and Accurate Credit Transactions Act, an FCRA amendment, consumers are entitled to a free report from each of the three leading credit bureaus in the country: Equifax, Experian and TransUnion. You reports can be ordered through mail, through fax or through its toll free number. And with the advent of the internet technology, credit reports are easily availed through internet transactions.

- Also, credit reporting agencies are not allowed to keep a negative information in a consumer’s record for more than the specified number of year. Late payments are typically removed from the report after 7 years while bankruptcies take longer to be removed from your report. It may take about 10 years before you could ask a credit reporting agency to remove your bankruptcy history from your report.

The FCRA will help you navigate through your life as a creditor. Knowing about your rights will prevent you from easily believing bogus information proliferated by fake credit report companies. And knowing more about this law will ensure that you are able to maximize your rights as a creditor. Many people are made to believe that credit bureaus do not make mistakes in updating your credit information. But in fact, it happens. Because the ones who are updating your report are all but human beings. They are likely to err as well.

But knowing that under the FCRA, the credit reporting agencies must make sure that all information they enter in your report must be accurate, you are entitled to dispute all information that may seem doubtful. And the credit reporting agencies must also explain to you how accurate certain information is. It is your right as a consumer and their obligation as a report provider.

Get your free credit report from Free-Credit-Report.com. Learn what is considered a good credit score and how to raise your credit score.