5 Things to Know About Consumer Credit Reports

Banker Resource
August 7, 2013 — 1,497 views  
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In this “don’t ask, don’t tell” world, the Fair Credit Reporting Act has made it a little easier for the consumers to know what barred them from getting a loan or other type of credit. There are certain rules that credit reporting agencies must follow while creating a consumer credit report, and if they do not follow them, consumers may have a claim against them.

Consumer Rights under FCRA

There are four main consumer rights under the FCRA through which a consumer can file a Fair Credit Reporting Act Litigation. Among these four, the first says that if some information about a consumer has been used against him to deny credit to him, he must be informed of that information. Also, the consumer can demand to know in full what data has been captured against him for consumer credit. Consumers have the right to request and acquire all of the data captured against them by any agency and are permitted to have a free disclosure after every 12 months.

Consumers can also request for a credit score – which is a numerical credit rating for them according to the information held by the various credit bureaus. In case the information recorded about them is inaccurate or incomplete, the consumer can also dispute such information. The FCRA benefits credit consumers in this manner.

How Credit Reports Help To Get a Loan

A consumer credit report shows things like missed payments, maxed-out credits, inquiries, number of credit accounts open, and income-debt ratios. If a consumer does not have any missed payments or maxed-out credits in his name, his credit report will help him in obtaining a loan. Similarly, if the consumer’s income is more than his debts, and he does not have too many credit accounts open, loan hassles will be less. To ensure this, consumers must not open a credit account unless required and should close all unused accounts.

Where and How to Obtain a Credit Report

A credit report can be obtained from any Credit Reporting Agency (CRA). The FTC fee for requesting a report is currently set at $9.00. However, the states of New Jersey, Colorado, Maryland, Georgia, Massachusetts and Vermont have laws for free reports for their residents. The states of Minnesota, Maine, Montana, Connecticut and California have a reduced fee according to their laws.

When Are Credit Reports Available For Free

A free consumer credit report from any CRA is available every year. However, free reports are also available to individuals who are unemployed or on welfare, or whose reports have been tampered by fraud. If any adverse actions are taken against any consumer by an entity, then such a consumer is also entitled to a free report.

Building a Case for Fair Credit Report Litigation

To build a strong case for Fair Credit Report Litigation, the credit report of the consumer should be obtained first. Next, the report should be scanned thoroughly for any inaccuracies. Disputes against these errors can be submitted, backed by evidence. Consumers should also remember that the agencies should not show any negative information which is above seven years old, nor should it show bankruptcies of over ten years old. Inaccurate or unverifiable data should be corrected within 30 days.

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