If you have a fire extinguisher in your basement and you don’t know it’s there, it won’t help you when you accidentally set a kitchen towel on fire. I think this is a good analogy for not understanding your rights under the Fair Credit Reporting Act (FCRA). If you don’t know what a violation is, how will you know when your rights have been violated? FCRA exists to protect consumers from unfair practices on the part of a credit reporting agency or creditor. I’ll tell you what the most common violations are so you can keep an eye out for them and protect your credit report and your credit rating.
There Are a Lot of Mistakes Out There!
The Federal Trade Commission (FTC) has estimated that at least one in five Americans has a mistake on their credit report that has negatively affected their credit rating. A credit reporting error could cost you thousands of dollars in poor interest rates, credit card penalties, and missed opportunities. Of course, you won’t know if there is a mistake on your credit report unless you get your free copy from each credit reporting agency each year (or more often!) and check it.
What Should You Be Looking For On Your Credit Report?
There are lots of ways your rights under the FCRA can be violated, but some violations are more common than others. When reviewing your credit report, look for the following:
- Old information. If you filed for bankruptcy more than seven years ago, that information should no longer be on your credit report. If you had a civil judgement against you, that record should be removed after 10 years. Failing to remove this information is a violation. If an account you closed is still reported as active, that should also be corrected on your credit report. A debt that was discharged in bankruptcy should not still be on your credit report. All of these are examples of errors that can affect your credit score and negatively impact your life.
- Inaccurate information. Any misinformation, no matter how small, should be removed or corrected. This includes balances, late payment reports, debt discharges, and accounts that were the result of identity theft. Comb your report for these kinds of errors and demand that they be corrected. Not correcting them in a timely manner is a violation of the FCRA.
- Mixed files. You’d be surprised at how often people’s account information gets mixed up. Similar names, same addresses, and inaccurate Social Security Numbers can result in someone else’s bad credit being reported under your name. These errors should be corrected quickly.
Not all violations can be discovered by reviewing a credit report. Creditors and credit reporting agencies (CRAs) have a duty to handle your information in a certain way. When they fail to do this, they violate the FCRA. Some common violations include the following:
- Failing to follow dispute procedures. When you submit a written dispute about something on your credit report, the CRA or creditor must follow certain procedures in their investigation of the dispute. If they don’t, they are in violation.
- Privacy violations. While a fair number of entities have a right to the information on your credit report, that doesn’t mean the CRA can send it to just anyone. If an unauthorized person is allowed access to your report, the CRA must be held accountable.
- Failing to notify you. You are entitled to notices concerning the reporting, handling, and use of your credit information. If the creditor or CRA fails to notify you, they are in violation of the FCRA.
- Using your report for impermissible purposes. Even entities with legal access to your report can only request a report for certain reasons. If they pull your report for an impermissible purpose, they may be violating your rights and breaking the law.
These violations are tricky to catch and even trickier to pursue. If you suspect your FCRA rights have been violated, I can help. Contact me online or call me directly at 855.982.2400 to investigate. I fight to hold creditors and credit reporting agencies accountable when they violate—knowingly or not—a consumer’s rights. Call me today!