Federal Credit Laws
The Fair Credit Reporting Act of 1971
- Gives you the right to
know what information is held about you, without charge, if you
have been denied credit within the last 60 days.
- You have the right to
receive a report of who has seen your credit file for the last six
months, and who has seen it for employment purposes for the last
two years.
- You have the right to
have information you dispute verified and corrected or removed if
inaccurate or unverifiable, and to have an updated report sent to
creditors, who have seen your report in the last six months, with
the corrected information.
- You have the right to
place a 100 word statement, if negative information is verified
and not removed, stating your side of the story.
- You have the right not
to have adverse, negative information on your credit report for
more than seven years, ten years with bankruptcy, under the
law.
New Legislation
- Consumer Credit Reporting Reform Act of
1996
Late in 1996, Congress
passed amendments to the Fair Credit Reporting Act. This legislation
was put together by Congressman Joe Kennedy, Charles Schumer,
Esteban Torres and Senator Richard Bryan. Several consumer groups
were involved as well. (U.S. Public Interest Research Group,
Consumers Union, and Bankcard Holders of America). The new bill is
called the Consumer Credit Reporting Reform Act of 1996. Most of the
provisions are effective October 1, 1997. Here is a summary of those
new provisions:
- Credit bureaus must
promptly investigate disputed items, usually within 30 days, and
within 5 days after the investigation send the consumer a revised
copy of their credit report with corrections. The Credit bureaus
must report and share corrections with other bureaus.
- Credit bureaus cannot
reinsert deleted information unless that information has been
certified by the creditor. If the information furnished is
certified, the Credit bureau must notify the consumer with the
name, address and phone number of the creditor. The Credit bureau
must allow the consumer to add an explanatory statement to any
remark on the credit report.
- Anyone who supplies
information to a Credit bureau cannot provide information they
consciously know is inaccurate. If a mistake is brought to the
attention of a creditor, they must promptly correct it and the
correction must be reported to all Credit bureaus. If a Creditor
investigates a dispute and finds it correct, they must report it
as being disputed by the consumer.
- Credit reports are free
for those who are unemployed, on public assistance and fraud
victims. Credit reports are free if you have been turned down for
credit or insurance in the past 60 days based on information in
your credit report. A copy of your credit report outside of the
previously mentioned circumstances are $8.00.
- A creditor must report
an account as closed when a consumer closes his account.
- If an employer wants to
review an employee's credit report, or a prospective employee,
they first must get written permission from the person they want
to review. If adverse action is taken against the employee because
of information obtained from the report, the employer must provide
the employee a copy of the credit report and a description of
their credit rights.
- Consumers who request
their report must be shown the full trade name of anyone who has
requested their credit report in the past year (two years if
inquiry made by employers). If requested the Credit bureau must
give the names, addresses and phone numbers of those companies
that made an inquiry. Prescreening cannot be shown to anyone but
the consumer.
- Credit reporting
agencies must offer toll-free numbers to anyone wishing to be
removed from lists allowing prescreening of their credit report.
The bureaus must share requests with other bureaus concerning
consumers wanting to be removed from prescreening.
- Insurance or credit
companies that use prescreening to pre-approve customers must make
a FIRM offer of credit to anyone who meets the initial
prescreening offer. Unless something has changed since they
prescreened your credit, creditors must follow through on a
pre-approval offer.
- If you have charged off
debts the time period of seven years is the maximum time allowed
on your credit report. Unlike the past, the reporting period for
collection, and profit and loss does not start when the creditor
gets around to reporting it, often that was a year later. The
reporting period will start 180 days after the payment should have
been made.
- One of the most
interesting provisions is that lenders may show consumers their
credit report if they have taken adverse action based on
information in the report. This does away with the hide and
retreat tactic that a lot of lenders used to use before.