Federal Law and Consumer Credit Scores
With the exception of your Social Security number, no other number has more of an impact on your life than the impact made by your credit score. Credit scores influence lender decisions on whether to offer you credit cards and loans for big ticket items, such as a home and automobile. Even employers use credit scores as one factor in determining the qualifications of a job applicant.
The United States has a history of favoring lender rights over consumer rights. That is, until the passage of two landmark pieces of federal legislation that protects you against credit reporting fraud.
Fair Credit Reporting Act (FCRA)
Passed in 1970 and enforced by the Federal Trade Commission (FTC), the Fair Credit Reporting Act ensures the accuracy, privacy, and fairness of consumer information stored in the files created by consume credit reporting agencies. The guiding enforcement principle of the FCRA is to prevent the willful and/or negligent addition of inaccurate financial data in consumer credit reports. Under the FCRA, government oversight includes the thorough vetting of consumer credit reporting agency practices in regards to the collection and sharing of consumer credit histories.
The FCRA represented ground breaking consumer protection legislation. However, more than 40 years later, the United States Congress passed a bill that bolstered the enforcement teeth of the FCRA.
Fair and Accurate Credit Transactions Act (FACTA)
In a study released by the FTC in 2015, nearly 25 % of consumers discovered inaccurate and/or incomplete information in their credit reports. Before 2003, consumers had no legal recourse to rectify inaccurate credit reports. The Fair and Accurate Credit Transactions Act (FACTA) mandates that consumers have the right to receive one free copy of their consumer credit report from each of the three major credit reporting companies (Experian, Equifax, and TransUnion) every 12 months. Consumers request free credit reports online via the government approved website, as well as by mail or phone. FACTA also includes legal mandates to reduce identity theft, such as providing consumers with the capability to issue alerts for their credit histories if identity theft appears to have prompted a sharp drop in their credit scores.
How Do Consumers Order Free Credit Reports?
In a collaboration with the FTC, Experian, TransUnion and Equifax created online websites to act as a central digital clearinghouse for free credit report requests. The big three credit reporting companies also have set up toll free numbers to discuss free credit report questions with consumers. You can order your free credit report once annually online or by making a request online or by calling 1-877-322-8228.
If mail is your preferred method of communication, send your free credit report request to the following address:
Annual Credit Report Request Service
P.O. Box 10581
Atlanta, GA 30348-5281
What Information Do I Need to Provide for a Free Credit Report?
If you want to receive a free credit report, you need to give each of the three major credit reporting companies your name, date of birth, address, and Social Security number. Consumers that have moved within the past two years must also provide the previous address. TransUnion, Experian, and Equifax ask questions that only you know the answers to secure your account. You might have to give answers to security questions such as the name of your first school or the city where you were born.
The importance of your credit report in all facets of your life requires you to remain vigilant for fraud and other types of illegal activities that diminish your credit worthiness. The federal government has created clear guidelines to protect consumer information. It is up to you to ensure the information is complete and accurate.
AUTHOR: John Miser
Copyright Sierra Litigation
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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.