01 Aug Are You Using The Fair Credit Reporting Act To Your Advantage?
FCRA, The Fair Credit Reporting Act
October 26, 1970 was the day the Fair Credit Reporting Act started protecting you against mishandling of your credit information and gave you access to review it yourself. But why is the FRCA a big deal?
In the wild days before the FRCA, credit bureaus kept track of much more than your debts. Single mothers, people suspected of being gay, or participants in “hazardous sports” had special notes in their files. If you were suspected to be “morally lacking,” you wouldn’t be considered reliable enough to pay back a loan. What’s worse is that you couldn’t see their file on you so you didn’t know what the credit bureaus recorded, or what they were telling others about you.
The Federal Government stepped in and amended the Federal Deposit Insurance Act to protect consumers’ privacy and the accuracy of their credit reports. The FRCA is also called the “Consumer Credit Protection Act Amendment.” It’s done a lot to help people protect themselves against unjust credit practices. It’s no longer legal to include factors like race, religion, or “moral standards” in a credit report. It’s also not legal to just sell your private information to the highest bidder.
The FRCA also protects against credit-destroying errors. For example, a study in 2004 found that 79% of consumer credit reports contained errors. A quarter of those mistakes were serious enough to severely damage a credit score. Then, a decade later in 2015, the Federal Trade Commission (FTC) released a new study that showed only 23% of consumers found inaccurate information in their credit histories. People are becoming more aware of how important it is to review their records and correct mistakes that cost them money.
Under the FRCA, every American has the right to one free copy of their credit report each calendar year. That way everyone has a chance to review their own records and dispute errors and outdated information. Fixing problems on their reports raises their credit score and that lowers the interest rates on loans they seek in the future.
If the credit bureaus and lenders violate the FRCA, they can be sued. They’ve already lost out on millions of dollars to lawsuits filed by frustrated consumers and fines from the FTC. Lawyers are quick to support consumers taking action under the FRCA against the credit bureaus and lenders because the law allows them to recover their fees if they win.
Take advantage of the FRCA
Get a free copy of your credit report at the official site annualcreditreport.com and review it for errors and out-of-date information.
Do you think you might be part of the 79% that has errors on their credit reports that may be negatively impacting your credit score? The experts at Honore’ Credit Consultants are trained in helping to use laws such as the FCRA in your favor and to protect you as a consumer!
Call one of our credit consultants today so we can discuss options for helping to improve your credit profile! (844) 967-3724