Learn About Credit - What Is The Fair Credit Reporting Act?
If you want to learn about credit, the first thing you should understand is your rights under the Fair Credit Reporting Act of 1983. Under this act, you are entitled to get three free credit reports each year, one from each of the main credit bureaus. These credit bureaus are Transunion, Experian and Equifax. All three of them report your credit scores to creditors.
By law, they have to provide you with one free credit report each year. It is a good idea to check your credit report to make sure that everything that is reflected on the credit report belongs to you. If there is a disputed item on your credit report, you should write to the company right away and tell them that there is an error and that you want it removed from your credit report. The credit bureau then has to contact the creditor about the item who then has 30 days to give proof that the debt is accurate. If they do not do this within 30 days, the credit bureau has to remove the item.
Once you learn about credit and the fair credit reporting act, you will learn that you are also entitled to get a free credit report if you are turned down for any sort of credit. If you apply for a credit card and are turned down, the credit card company has to notify you in writing of why you were turned down. They will usually state that it was because of information on your credit report. They will then have to name the agency that gave them this information. You should then contact the agency where you will be entitled to another free credit report to see why you were turned down for a loan.
Under the fair credit reporting act, creditors have to let you know the basis of their decision as to why they are turning you down for credit. They cannot turn you down based upon your race, religion, gender, etc. They can only turn you down if they have good cause which is usually that you are a bad credit risk because of information obtained by them from a credit bureau.
The Fair Credit Reporting Act allows you to find out who is saying what about your credit. Prior to this act, creditors were able to turn down anyone for a loan without giving them a reason. The fair credit reporting act changed this. The act also revamped the way that the credit bureaus behaved. Prior to this act, the credit bureaus would often not act fairly when they were confronted with erroneous information. They would not remove mistakes from credit reports. Today, however, they are under mandate to do this if the report is in error.
It is important to learn about credit with regard to your rights and understand the aspects of the Fair Credit Reporting Act.