What is a Credit Report?
Your credit report contains important information about you. It generally includes facts about your identity, where you work, live, your bill-paying habits, and public record information. Credit grantors use credit reports to determine whether or not you will be extended credit. Identity information includes your name, address, marital status, Social Security number, date of birth, number of dependents, and previous addresses. Employment data includes your present position, length of employment, income, and previous jobs. Factual information about your credit history consists of your credit experiences with specific credit granters. Public record information includes civil suits and judgments, bankruptcy records or other legal proceedings recorded by a court. A credit report does not contain information on arrest records, specific purchases, or medical records.The Fair Credit Reporting Act (FCRA) is designed to help ensure that credit bureaus furnish correct and complete information to businesses to use when evaluating your application.
The Role of Consumer Credit Bureaus
Consumer credit bureaus collect the credit information from credit grantors such as banks, savings and loans, credit unions, finance companies, and retailers. Credit grantors then access this combined information from the bureaus to help them make lending decisions. Today there are three major nationwide credit bureaus. In addition, many smaller, independently owned credit bureaus serve local markets. Most of these smaller bureaus have contractual agreements with the three major bureaus. They even store data on the major bureaus' computer systems.
Who Can Order My Credit Report?
There are limited circumstances under which a credit bureau may furnish consumer credit reports. These permissible purposes are:
- In connection with credit or collection transactions.
- For employment purposes.
- For the underwriting of insurance.
- For the determination of a consumer's eligibility for a license.
- Other legitimate business transactions initiated by you.
- To review an account to determine whether you continue to meet the terms of the account.
- Court orders meeting specific requirements.
- At the your written instruction.
Employers who Wish to Secure a Credit Report Must:
Prior to obtaining a consumer report:
- Provide the employment applicant with a disclosure stating a consumer credit report is going to be obtained, and
- Obtain the employment applicant's written authorization.
- Prior to taking adverse action based on the information contained in the consumer report: Provide the employment applicant with a copy of the consumer report, andProvide the employment applicant with a summary of consumer's rights under the FCRA.
How Long Will Information Stay on my Report?
Be aware that when negative information in your report is accurate, only the passage of time can assure its removal. Credit reporting agencies are permitted by law to report bankruptcies for 10 years and other negative information for 7 years.
Also, any negative information may be reported indefinitely for use in the evaluation of your application for:
- $150,000 or more in credit;
- a life insurance policy with a face amount of $150,000;
- consideration for a job paying $75,000 or more.
Your rights under the Fair Credit Reporting Act
- Delete outdated information. In general, negative information that is more than 7 years old (10 years for bankruptcies) must be removed from your file.
- Remove your name from marketing lists upon request. Consumer reporting agencies can provide lists of consumer names and addresses whose credit information matches the requirements of creditors and insurers for making firm offers of credit or insurance to the consumers on the list. However, you can request that the three nationwide consumer reporting agencies not share your information with creditors and insurers for these purposes by calling 1-888-5-OPT OUT.
- Disclose your credit score to you upon request. You have the right to request a credit score about you. In some mortgage transactions, you will get credit score information without charge by contacting the person making or arranging your loan for further information
- You have the right to receive a copy of your credit report. The copy of your report must contain all of the information in your file at the time of your request.
- You have the right to know the name of anyone who received your credit report in the last year for most purposes or in the last two years for employment purposes.
- Any company that denies your application must supply the name and address of the credit bureau they contacted, provided the denial was based on information given by the credit bureau.
- You have the right to a free copy of your credit report when your application is denied because of information supplied by the credit bureau. Your request must be made within 60 days of receiving your denial notice.
- If you contest the completeness or accuracy of information in your report, you should file a dispute with the credit bureau and with the company that furnished the information to the bureau. Both the credit bureau and the furnisher of information are legally obligated to investigate your dispute.
- You have a right to add a summary explanation to your credit report if your dispute is not resolved to your satisfaction
- Add identity theft and active duty alerts. Identity theft victims may place fraud alerts and active duty military personnel serving away from their regular duty station may place "active duty" alerts to help prevent identity theft
How Can I Correct Errors on my Credit Report?
You have the right, under the Fair Credit Reporting Act, to dispute the completeness and accuracy of information in your credit file. When a credit reporting agency receives a dispute, it must reinvestigate and record the current status of the disputed items within a "reasonable period of time," unless it believes the dispute is frivolous or irrelevant." The credit reporting agency is to take the following actions: If the credit reporting agency cannot verify a disputed item, it must delete it. If your report contains erroneous information, the credit reporting agency must correct it. For example, if your file showed an account that belongs to another person, the credit reporting agency would have to delete it.
For the full disclosure of the Fair Credit Reporting Act click here