How the Fair Credit Reporting Act Helps You
by Ron Bennett, 35-year Army veteran and VA Loan Officer
I am honored to be a guest on a local radio show twice a month. On a recent show, I decided to talk about the Fair Credit Reporting Act.
And wouldn’t you know it. I got back to my office and one of my past clients – we’ll call her Mary – called me up to talk about refinancing her house.
After going through the necessary steps to do her loan, I went to get her approval. Well, Mary’s report showed she had a recent bankruptcy. What we found is that it was caused by some erroneous information from the credit reporting agency.
Mary had a car that was under a previous bankruptcy. She paid the car off, only to have the credit reporting company report it as a recent bankruptcy.
We’ll still get Mary’s loan done by correcting the issue, but what a headache. This is the kind of thing happens a lot.
Before 1968, we did not have any way to challenge this type of problem. The Fair Credit Reporting Act was implemented to protect consumer privacy, regulate the collection, dissemination, and use of consumer information.
This is the law that formed credit rights for the consumer. The key portion of this act is to make sure that information in the three credit agencies – Equifax, Transunion, and Experian – have accurate information in their files.
It’s good that we caught Mary’s problem so that we can get it corrected and make her loan application stronger. Also, her credit scores should improve.
Your Rights under the Fair Credit Reporting Act
The Fair Credit Reporting Act gives you some rights. A creditor must inform you if the information in your credit file has been used against you.
For instance, if you are denied credit or insurance or a job, the person or company denying you must give you the name, address and phone number of the agency that supplied the information.
You have a right to know what is in your credit file by getting a report once a year. A great resource to get your report is AnnualCreditReport.com. This website gives consumers genuinely free access to their credit report.
You will have to provide proper identification when requesting the report. This is very important these days with all of the identity-theft that is happening. If you are victim of identity-theft, it may take a long time to fix it. So make sure you get a report as often as you feel you need to have one.
You have the right to ask for your credit scores. While credit reports are free, you may have to pay a fee to get the scores.
Most of the time I can run someone’s credit and get the score for you for free.
You have the right to dispute inaccurate information on your report. This has created a lot of the credit restoration companies that all they do is dispute information on credit reports.
If you are disputing items on your report, the company has 30 days to respond and either verify the information is correct or remove it from your report.
In some cases, the reporting companies cannot put anything on your report without your signature. The reporting agencies are also not allowed to report outdated information.
You must give consent to you potential employer before they can look at your report. You may notice that on employment applications now you will see a request for this consent. Again, if you are denied a job because of your credit, you have a right to know where the credit information came from.
And if you are in the military and you are a part of identity theft, there are additional rights you may have, as stated on this FTC website.
We will get the incorrect information removed from Mary’s report, and save her several hundreds of dollars per month…thanks to the Fair Credit Reporting Act.
Ron Bennett (NMLS 57792, MLO-57792) is a Sr. Mortgage Advisor in Washington State. Contact Ron at 253.561.9704 and visit him on Facebook. Ron’s military experience: last rank – Master/First Sergeant (E-8); 35 years of service; U.S. Army.