The Fair Credit Reporting Act (FCRA) and its update, the Fair and Accurate Credit Transactions Act, were put in place to ensure that anytime your record of credit use is reported to a credit bureau, the record is accurate, timely, fair, and private. The FACT Act applies not just the three big bureaus (Equifax, Experian, and TransUnion), but also to a large number of specialty consumer-reporting agencies.
Some agencies accumulate and sell information about your check-writing history, medical records, and rental history.
So what are your rights and protections? Here’s a summary of the biggies.
You must be notified if anyone takes a negative action based on your credit report. Anyone using a credit report or specialty-bureau consumer report to deny your application for credit, insurance, or employment — or take any adverse action against you — must tell you so and give you access to the information by telling you how you can get a free copy of the report used to make the decision.
You have the right to know what’s in your file. You can get a copy of all the information about you in the files of a consumer-reporting agency.
You can get a free copy of each of your reports annually at Annualcreditreport.com Reviewing your credit reports every 12 months is just what the doctor ordered for good credit health.
Beware of imposter websites! When you order your free annual credit reports online, be sure to type in www.annualcreditreport.com to avoid being misdirected to other websites that offer supposedly free reports but only with the purchase of other products and services. Also, be aware that while you’re on the authorized free site, you’ll be offered additional products or services for a price. You’re not required to make a purchase.
You can get an extra free copy of your credit report if an adverse action has been taken against you because of information it contains. For example, if you’re the victim of identity theft or if your file contains inaccurate information as a result of fraud, you’re entitled to a free report. You can also get a free copy if you’re on public assistance or if you’re unemployed.
You have the right to know your credit score. Believe it or not, this didn’t used to be the case. Your score was kept secret from you, but not from your creditors! Well, that’s changed, and now you have the right to get your score from consumer-reporting agencies, but chances are you’ll have to pay for it.
You have the right to dispute incomplete, out-of-date, or inaccurate credit information and have it removed from your reports. After you report an issue to the consumer-reporting agency, the agency has to investigate (they say reinvestigate). Unless your dispute is frivolous, the agency must correct or delete the erroneous information, usually within 30 days.
You have the right to limit access to your file to only those who have a legitimate business purpose for requesting it. A consumer-reporting agency may sell information in your file only to people with a valid use, called a permissible purpose — usually to consider an application with a creditor, insurer, employer, landlord, or other business purpose.
You must give your approval for anyone to access your information, and you can limit access to your information for unsolicited prescreened offers for credit and insurance.
You can opt out of such preapproved credit offers with the nationwide credit bureaus at 888-5-OPTOUT (888-567-8688).
You have the right to collect damages for violations of your rights under the FACT Act. If a credit-reporting agency or user or furnisher of information violates the FACT Act, you can sue the party in state or federal court.
You have additional rights if you’re an identity theft victim or an active-duty military service person. For example, you can appoint a personal representative to handle your affairs while you’re deployed outside the U.S. Additionally, you may place an active-duty alert on your file, which requires creditors to exercise greater caution and verify your identity before making credit decisions.
Although the FACT Act is a federal law and is enforced by the FTC and the CFPB, states may also enforce the law, and some states have their own consumer-reporting laws. You may have additional rights under your state’s laws.
To find out what applies in your state, contact your state or local consumer protection agency or your state attorney general. Explain your concerns and ask what your rights are and how you can get help. Be sure to record names, dates, and actions in case you need to follow up.