The federal Fair Credit Reporting Act was signed into law in 1999, providing consumers with several provisions to safeguard and communicate their credit status. Among the Act's primary benefits is to provide a free annual credit report to all consumers, helping to ensure identity security, to correct erroneous information and to give the consumer insight into his credit file.
Credit Reporting Agencies
The three major credit reporting agencies (Equifax, Experian, TransUnion) are required to provide consumers, upon request, a free copy of their credit report annually. Within the federal Fair Credit Reporting Act, the Federal Trade Commission (FTC) outlines several requirements of credit-reporting agencies and bureaus--beyond the provision of free credit reports.
Communication
Consumers must be informed if information within their credit report was used against them. This communication must include the contact information for the party making the decision, whether employment, insurance or credit.
Credit Scores
The Act requires that consumers may request and receive their credit score from credit-reporting agencies. This score indicates a consumer's credit-worthiness and is based on information gathered from credit agencies.
Right to Contest
Under the Fair Credit Reporting Act, consumers may contest information that they feel is inaccurate or incomplete. The agency is then required to investigate the dispute, unless the complaint is deemed frivolous.
Update Information
Credit-reporting agencies are required to maintain up-to-date information. If data is determined to be incomplete, inaccurate or unverifiable, it must be corrected or removed. Information that is older than seven years old may not be reported, and bankruptcies are not to be reported after 10 years.
Privacy
A consumer's credit file can be shared only with the consumer and the consumer's creditors, employer or insurer. This access is granted when a valid need is determined.
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