In 1970 Congress enacted a federal law to guard consumers from inaccuracies on their credit reports. This law is known as the Fair Credit Reporting Act or the FCRA and it was passed to guard consumers and promote the fairness, accuracy and privacy of personal information compiled by credit reporting agencies on credit reports.
The main credit reporting agencies are TransUnion, Equaifax and Experian. They are in the business of collecting and compiling information used for credit evaluation and other purposes.
The FCRA gave consumers the entitlement to argue and contest any information found on a credit report on the foundation of truthfulness and completeness. After a dispute is issued the credit reporting bureaus have 30 to 45 days to confirm the ownership and the truth of the disputed accounts. If they are not able to offer the substantiation within the time frame then the disputed information must be deleted from the credit report.
The credit reporting agencies also have other responsibilities under the FCRA. Each year a free credit report must be provided to any consumer who requests one. Before 2003 the consumer had to give a fee for this report but an amendment in 2003 altered this and now it is provided at no charge. A report must also be provided if the consumer has been denied credit on the foundation of what is provided in the report.
A consumer has the right to question any information on his or her report. As per the FCRA if information is deleted as a result of the consumer’s dispute the credit reporting agency cannot put back the negative information without notifying the consumer in writing.
The FCRA also defined a limit as to how long negative information can stay on a report. On average if must be removed within 7 years from the time of delinquency with the exception being a bankruptcy that can last for 10 years and a tax lien that can remain on the report for 7 years after it is paid off.
The credit reporting agencies receive many disputes and it has been projected that as many as 40% of disputed information is not verified within the time limit and must be removed from the report. Consumers can use that fact for their benefit however; true and correct information should always remain on the report even if it is unhelpful.
Credit repair on credit reports can be accomplished due to the rights given by the FCRA. The consumer can do credit repair themselves or there are also professional companies that concentrate in credit repair. It takes time and persistence to be triumphant at credit repair but it can be accomplished.
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