Defending Your Credit: Know Your Rights

Apr 25, 2020 | Data Privacy

Defending Your Credit: Know Your Rights

For many people, a good credit score is a point of pride — and essential to their sense of financial well-being. After all, good credit can be the key to obtaining a mortgage or a business loan. It can ease the way to home improvement projects or dream vacations. It can even affect how much you pay for car insurance. Sometimes, though, even the most conscientious consumers suffer a blow to their credit rating, through no fault of their own. The problem could be as simple as a payment that a creditor failed to acknowledge, or as disastrous as a full-blown case of identity theft. Regardless of the cause, it’s important to respond quickly to negative and false information that can ruin your credit. Here’s what you need to know and the steps you can take.

What is the Fair Credit Reporting Act?

Enacted in 1970, the Fair Credit Reporting Act (FCRA) is designed to protect consumers from the harm that can result from mistakes made by credit reporting agencies. Provisions of the FCRA are designed to promote accuracy, privacy, and fairness in the way that such agencies gather financial information on consumers and what they do with it. Under the FCRA, consumers have certain rights that can help protect or restore their good credit rating. These include:

  • The right to know what’s in your file. Anyone can request a free credit report from the nationwide reporting agencies once every 12 months. You may also be entitled to a free report if you’ve been the victim of fraud or identity theft, if you’re on public assistance, or involved in legal action because of adverse information in your file.
  • The right to dispute false or incomplete information. If a credit report has been used to deny you credit, employment, or insurance, you have the right to know what the negative information is and where it came from. If that information is false or incomplete, you should contact the reporting agency to dispute it; the agency is required to investigate legitimate complaints. If the information turns out to be inaccurate or unverifiable, the agency is required to correct it, a process that usually takes no more than 30 days.
  • The right to have outdated information removed. Negative financial information that is more than seven yearold is typically removed from most reports, though bankruptcies may stay on your record for ten years.
  • The right to limit access to your file. Employers can’t access your credit reports without your written consent. No entity is supposed to access your file without a legitimate reason — for example, a credit card company or property management firm that is processing your application.

Dealing with Identity Theft

Some of the most stressful credit disputes have to do with charges made in your name by someone who’s stolen your personal financial information. Beyond simply notifying police, credit card companies, and the reporting agencies, there are additional steps you can take under the FCRA to protect yourself. You have the right to place a credit freeze on your report, which prevents any new accounts, loans, or services being opened in your name. (That could become an obstacle if you’re in the middle of taking out a mortgage, too, but it’s an effective way to prevent identity thieves from going to town at your expense.) Another alternative is to put a fraud alert on your report, which requires businesses to go through a verification process to confirm identity before issuing any new credit. Fraud alerts can last from one year up to seven years.

What if You Can’t Resolve the Dispute On Your Own?

Most credit reporting agencies are well-versed in the requirements of the FCRA and are willing to work with you to resolve disputes. But if you have gone through the dispute resolution process and aren’t satisfied with the result, you may want to consult an attorney. If a reporting agency or a user of its information is acting in violation of the FCRA, you may be able to file a lawsuit for damages in state or federal court.

The Consumer Protection Lawyers at FDazar

The attorneys at Franklin D. Azar & Associates have a long track record of success in championing the rights of consumers and working Americans. We are currently investigating cases involving abusive wage practices, employees whose 401(k) plans have been subject to excessive fees and mismanagement, improper fees charged by investment companies and banks issuing auto loans, and more. If you have suffered damages as a result of unfair business practices or corporate misconduct, the lawyers at FDAzar may be able to help. Speak with a member of our team today or contact us here. The consultation is free.