Recent credit card reform has given consumers new rights, rights that are supported by the much older Fair Credit Reporting Act. This law ensures that consumer information is correct and that consumers have the ability to correct anything that isn’t.
Many people are aware of the big shifts in the credit industry over the past several years but many consumers, especially those who are finally at the age where credit is applicable, probably aren’t much aware about the Fair Credit Reporting Act. The Fair Credit Reporting Act was put into effect in October of 1970 at a time when consumer credit was on a massive upswing. This measure was enacted to ensure that consumers would have protection from things like predatory lending as well as their own ignorance of the complicated world that is the credit card industry.
It was during this time that the credit reporting agencies consolidated to create national reporting system. It was also a time during which private companies began tracking consumers’ behavior regarding their payments. With these in mind, the law provided balance to a system that would have been otherwise in heavy favor of industry professionals and not consumers. This law made sure that credit reporting companies and data trackers followed a very specific set of guidelines as well as required them to fix any mistakes they have listed on consumers’ credit reports.
For this reason, the Fair Credit Reporting Act of 1970 ensures, first of all, that every consumer has the right to know what is in their credit report. Want to buy a car or a home? Thinking about a new credit card? Thanks to this measure you can quickly and easily get this information, for free, once every 12 months. Your free annual credit report will give you some basic information regarding what the 3 major credit bureaus are saying about you.
Secondly, the Fair Credit Reporting Act of 1970 guarantees that only authorized users can access your credit report. This includes you, of course, but also any credit issuer that you allow to pull your report for the purpose of qualifying you status. This means that nobody can look into your credit without your consent or has a legitimate reason as listed within the stipulations. While this is an assurance named in the measure, there is no way to completely guarantee that your information is always safe so the measure sets up harsh penalties for those who breach your security.
Third, the Fair Credit Reporting Act of 1970 ensures that if you find any errors on your report you have not only the right but also the ability to change it. This, of course, is extremely important as the accuracy of your report can affect your ability to get better credit. You will have to follow certain stipulations in order to have this accomplished efficiently, but it’s a small sacrifice to make for accurate credit information. Also, the measure limits the amount of time the credit bureau has to confirm your dispute, which ensures expediency.
Fourth, the FCRA ensures that any negative information on your credit report must be held under a time limit. While you cannot change negative information that is accurate, you can minimize the damage it causes by knowing when that information will disappear.
Fifth, the FCRA helps you to know if you have been denied credit based on information held within your report. This ensures that you always get the most competitive rates and offers based on your actual creditworthiness.
Finally, the FCRA gives you the freedom to flag your own credit report if you believe the information is inaccurate or has been compromised. This lets credit issuers who may look into your account that you believe you may be a victim of fraud and that they should not regard your information to be accurate.