UNDERSTANDING THE FCRA AND YOUR RIGHTS
by Matthew HigbeeMatthew Higbee | Apr 3, 2023
The Fair Credit Reporting Act[1] (“FCRA”) was enacted by congress in 1970 with the goal of protecting consumers from inaccuracies, unfair reporting practices, and privacy breaches by credit reporting agencies. The FCRA helps to regulate the use of consumer reports by laying out rules covering; dispute resolution, the dispersing of consumer information, how and when a party may request/use a consumer report, as well as various other consumer rights.
A credit reporting agency (“CRA”), is an organization that collects a consumer’s credit information from a number of different sources (I.E. banks, credit card companies, public records, and numerous others). The main three CRAs are Equifax, Experian, and TransUnion. These are the CRA’s that your bank or credit card company will report your information to. This information works to determine your credit score. There are also other, smaller CRAs that help provide credit information to employers, landlords, and insurance companies, among others. The reports that these agencies provide hold an enormous amount of weight in determining what kind of loans, credit, mortgages, etc…you can qualify for. So it is extremely important that you understand your rights and remedies for mistakes, unfair practices, and disputes you might have with a CRA’s report.
This seems like a very simple question, but the fact is most people do not realize the vast variety of areas your credit score can impact. The most obvious areas are getting a credit card, applying for a loan, purchasing a home, and purchasing a car. Recently credit scores have become far more of a factor in renting an apartment than they were in the past. So when it comes to some of the common needs of life, we tend to overlook how important credit scores are to our well-being.
Yesterday!! Unfortunately, there are very few primary or secondary schools that provide classes teaching students about finances and the importance of their credit scores. The good news is; it is never too late to start learning about credit, and it is never too late to begin building yourself a brighter future by improving your credit score!!
The FCRA’s scope covers any report that is prepared by a CRA, and contains information about a consumer’s creditworthiness, character, personal characteristic, style of living, and general reputation when it is used all or in part to determine a consumer’s eligibility for employment, credit cards, insurance, household purposes, or any other purpose covered under section 1681b if the FCRA. In a nutshell, any purpose that requires you to provide a credit score.
The FCRA is a Federal Act, so it preempts any state law. This is helpful to the consumer because it ensures that everyone is protected, and there can be no “single” state in which you are more vulnerable to the impact of CRAs.
The FCRA was put in place “to require that consumer reporting agencies adopt reasonable procedures for meeting the needs of commerce for consumer credit, personnel, insurance, and other information in a manner which is fair and equitable to the consumer, with regard to the confidentiality, accuracy, relevancy, and proper utilization of such information in accordance with the requirements” 15 U.S. Code § 1681
As referenced in 15 U.S. Code 1681, Congress found studies that showed that inaccurate credit reports, and unfair credit reporting methods “undermine the public confidence” and “directly impair the efficiency of the banking system” which is “essential to the continued functioning of the banking system.
In a nutshell, the FCRA protects you and your personal information. It is there to empower consumers to have some control over how their lives are impacted by CRAs. If you have any questions about how a CRA might be impacting your credit, and how you may have recourse under the FCRA please contact us at Higbee & Associates. We have a team of lawyers that are experts in this area and are dedicated to making sure credit reporting agencies are following the law.
One of the easiest ways to look for and discover inaccuracies in your credit report is to use the government’s website https://www.usa.gov/credit-reports. You can check your credit report once a year without taking a negative hit on your overall credit score. This gives you the information you need to see if there are any inaccuracies in your credit report.
When an inaccuracy is spotted you should contact the CRA that has the incorrect information as expeditiously as possible. If they are unavailable, unable, or unwilling to help you should then contact the Consumer Financial Protection Bureau (CFPB).
At Higbee and Associates we have many credit experts and experienced attorneys well versed with the ins and outs of the FCRA and trained to deal with inaccurate credit information. If you suspect you are having your FCRA rights violated, or simply feel you need help with your credit please contact us immediately.
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