Article by Nicole Roberts
The Fair Credit Reporting Act, often referred to as the FCRA, is a federal law that governs credit reports and the companies and individuals that deal with them. This includes the credit reporting agencies, the creditors that report to them and consumers. If you are trying to repair your credit, this credit act can be an invaluable tool.
A CBS News report found that as many as 79% of consumer credit reports contain errors. Minor errors such as spelling variations of your name have no effect on your score. However, more serious errors such as inaccurate balances can have damaging effects.
The first step in credit repair is getting a copy of your credit report from each of the credit reporting agencies. The Fair Credit Reporting Act gives consumers several options to get these reports for free. If you are denied credit or sustain adverse action as a result of your credit file, you are eligible for a free report.
Individuals who fall within certain categories are also eligible. This includes those that suspect fraudulent activity on their credit, those receiving public assistance and those unemployed, but planning to seek work within 60 days. Finally, the credit act allows all consumers a free copy of their credit report annually.
If you find errors in your report, the FCRA also gives you an option to correct them. You can send a dispute letter to the credit reporting agency. Once your letter is received, the credit reporting agency must investigate the error by contacting the company that furnished the information. If the company confirms the error, it will be corrected and you will receive an updated copy of your report.
You have the option to dispute with the company reporting to the credit reporting agencies as well. Under the Fair Credit Reporting Act, they are restricted from reporting information which they know or have reason to believe is untrue. If you dispute the information they are reporting, you can send a letter detailing what information is inaccurate, why you believe it is inaccurate and documents supporting your dispute.
The credit act requires they investigate your dispute, which includes reviewing the information you provided. If the information on your credit reports is in fact erroneous, they must submit an update to the credit reporting agencies with the correct information.
When sending letters to credit reporting agencies or the companies reporting to them, it is important to document your disputes. This includes making a copy of letters and any supporting documents for your records and sending the dispute via a traceable mailing method. Certified mail return receipt requested is an inexpensive mailing method for this purpose.
If you are a victim of identity theft, the credit act can help. Once you notify the credit reporting agency, they can place a fraud alert on your file. This allows you a free copy of your credit report and also requires anyone trying to offer credit to make sure that it is really you that is applying. The act also mandates a block on the identity theft entries.
With the Fair Credit Reporting Act, you don’t have to live with erroneous and inaccurate information on your credit report. By utilizing the options within the act, you can repair your credit and restore your credit rating.