Do You Understand Your Credit Reporting Rights?

Did you know that you have the right to a free copy of your credit reports once every twelve months from annualcreditreport.com? Did you know that the credit bureaus have to maintain reasonable procedures to ensure the maximum possibly accuracy of your credit report data? Did you know that you have the right to physically walk into a credit bureau’s location and get a copy of your credit report?

These are just a few of the commonly known rights that we consumers enjoy thanks to the Fair Credit Reporting Act (FCRA for short). There are, however, a large number of rights with which you may not be familiar.

A sampling of those lesser known rights include:

• Your driving record history is a type of consumer report as defined by the FCRA.  This means you have the right to a copy of any report that contains your driving record history.

 

• Credit reports used for employment screening can’t be disclosed to potential employers until the applicant has given written permission. Unlike with credit related transactions, an employment credit report can’t be delivered without your written permission.

 

• If negative credit information is re-inserted into your credit report after it has been deleted due to an investigation, then you must be notified of the re-insertion within one week. The notification can be written or via some other mutually agreed upon format, such as email or verbal communication.

 

• Before a credit reporting agency can sell your credit report to anyone, they must verify that the “buyer” has a legal reason to obtain your credit report.  This is referred to as “permissible purpose.”

 

• If you apply for a mortgage loan, the lender must proactively provide you with a copy of the actual credit scores they obtained for underwriting — for free.  This has been a requirement since 2003. If you’ve closed on a mortgage loan since then, you should check your closing paperwork for your “credit score disclosure” document.

 

• If YOU choose to close a credit card account, the lender must report that the account was “closed by the consumer” on your credit reports.

 

• If you dispute ANY item on your credit report with the credit reporting agencies, they must place a notation on your credit report that indicates that the “consumer disputes this account and an investigation is in process.” While this initial investigation is in process, the FICO score will bypass the disputed item in their “debt” and “payment history” categories.

 

• Consumers have the right to dispute information on their credit reports, for free, if they believe the information is erroneous. The credit bureaus have up to 45 days to complete their investigation, but most take only a few weeks to complete. Once the investigation is complete, the credit bureaus must send you the results of their investigation.

 

• The credit reporting agencies MAY disregard and ignore your disputes if they believe they are frivolous. If you dispute the same item over and over, they can and will eventually stop investigating the item.

 

• You have the right to add a 100-word consumer statement to your credit reports to offer context to any item. The addition of the statement is free to the consumer. Having said that, most lenders don’t read the consumer statements and scoring models don’t take them into consideration. The consumer statement has become almost meaningless.

 

• While the Federal Trade Commission and the newly formed Consumer Financial Protection Bureau will share enforcement responsibility for the Fair Credit Reporting Act, consumers can hire private attorneys and bring suit to enforce their rights, as well. In fact, in 2011 there will be well over 12,000 claims under the various consumer credit protection statutes.

 

John Ulzheimer is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry. The opinions expressed in his articles are his and not of Mint.com or Intuit. Follow John on Twitter.