Do you know your rights under the Fair Credit Reporting Act, and how they’ve been recently amended? The Fair Credit Reporting Act (FCRA) was passed originally in 1970 with the intent of protecting consumers and promoting accuracy and fairness in the keeping and reporting of credit records. It ensured that consumers had access to the credit reports that are used by credit card companies and other financial agencies, and gave certain rights with regards to correcting errors and making amendments to Credit Reports to explain extenuating circumstances.
The FCRA also details how long certain information may remain on your credit report, specifies how you may make corrections to information in your credit history and guarantees your right to see your credit history.
The law was amended in 1998 to increase reporting accuracy and give consumers more right to view the information in their reports. In 2004, further changes were enacted which are being ‘rolled out’ in stages across the country. By December of 2005, the changes will be effective throughout the country.
The most important change to the reporting act has to do with the right of consumers to receive a copy of their credit report for free on a regular basis from each of the three major credit bureaus. Before this year, each consumer was entitled to request a copy of their credit report within 60 days of being denied credit by a credit card company, bank or other lender. The credit card company was required to name the credit bureau from which the report was obtained, along with the reasons that they denied your application. The credit reporting bureau was required to furnish you with a copy of your credit report upon your request.
Under the new rules, every consumer has a right to request their credit report from each of the three credit reporting bureaus once every 12 months. The report must be provided free of charge to the consumer requesting it.
Another important change to the Fair Credit Reporting Act is the institution of ‘one call fraud alerts’. It was established in response to the rising prevalence of credit card fraud and identity theft. The change to the law gives consumers the right to request a 90-day fraud alert be attached to their credit report. The fraud alert must be included with any report requested of an agency. The two major changes are:
- A consumer must only notify ONE credit reporting agency, who is now required to notify the others.
- Users of reports must now honor a fraud alert. No new line of credit, credit card, increase in credit limit or extension of credit may be approved without calling the consumer or making other reasonable efforts to verify the identity of the applicant.
Other changes in the FCRA tighten reporting and privacy provisions that further protect consumers from the effects of identity theft. For more information on the changes to the FCRA that can affect you, see the rest of our five part report about the New Improved FCRA.
