Most Americans are all too familiar with credit scores, but for those who aren’t, credit scoring is a system creditors use to determine whether or not to extend credit. Credit scores also factor in to how lenders determine loan terms or rates. The Fair Credit Reporting Act (FCRA) is the federal legislation which promotes the accuracy, fairness, and privacy of information in the files of consumer reporting agencies. It’s important for you to be aware of the rights you are afforded under FCRA. The following are some key points to keep in mind:
- You must be told if the information in your files has been used against you. Anytime a lender or other financial institution uses your credit report or any other type of consumer report to deny your application for credit, insurance, or employment, they must let you know. They must also give you the name, address, and phone number of the agency that provided them with the information.
- You have the right under FCRA to know what is in your file. You are entitled to request and obtain all of the information about you that is contained in the files utilized by a consumer reporting agency. To receive this information you are required to provide proper identification. Furthermore, you are entitled to a free file disclosure if:
- Adverse action has been taken against you based on information in your credit report
- You are the victim of identity theft
- Your file contains erroneous information resulting from fraud
- You are on some kind of public assistance
- You are unemployed but planning on applying for employment within 60 days
- No one can provide your employer with information relating to your credit report without your consent. Also, a consumer reporting agency can only provide information about you to parties with a valid need to know. Under FCRA, access to your credit files is limited.