Information contained in our credit reports can affect or even determine our future employment, and ability to buy a house or car. Thanks to the Federal Credit Reporting Act (FCRA), legislation enacted by the federal government in 1970, consumers are provided important protections and information with regard to their credit history and information.
The FCRA regulates the collection, dissemination, and use of consumer information, with the aim of protecting accuracy, fairness, and privacy. Prior to the FCRA, consumers had little protection against inaccurate data contained in these reports, or inappropriate use of these credit reports. The FCRA protects and informs consumers in these important ways:
Full and Free Disclosure Every 12 Months
Since 2003 consumers, are allowed a full and free credit disclosure of everything in their credit report, including their credit score, every 12 months. An amendment to the FCRA in that year mandates that consumers can request a free copy of their credit report from a credit reporting agency every 12 months, either through the agencies website or other contact points, or by going to the government authorized website www.annualcreditreport.com, which makes it easier to find and dispute inaccurate information.
Outdated Negative Information Must Be Removed
The FCRA requires that negative information that is more than 7 years old be removed from one’s credit report. This is an important protection for consumers, ensuring that outdated, irrelevant information does not have any impact on their employment or credit score.
Credit Report Used Against You
If anyone – an employer or a bank, denies you something (a job or a loan) based on your consumer report, they are required by law to inform you that they did so. This is important information to have, so that you can identify the causes and try to fix them before your next interview or bank loan application.
Limit Who Can View Your Credit Report
Last, the FCRA specifies who can access your credit report, such as a potential landlord, bank or employer. The random friend, associate, or stranger can’t access your credit file just out of curiosity.