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The Fair Credit Reporting Act and its Benefits

By Andy Snyder
Published: Sunday, October 25th, 2009

If borrowers can always be updated in the content of their credit reports, the financial business of crediting will never be the same. Through the free flow of credit report information, the individuals who want to borrow money will be given an edge to become more credit worthy. Before a lending company approves a loan proposal the borrower’s credit worthiness is initially diagnosed to know whether the credit will be an investment or a liability. Free credit reports are now available and even mandated by the law as a privilege. Credit report advice works best with the most accurate credit reports. If a borrower or the company is able to get hold of such report, the lending process would be speed up and even become efficient.

The credit system has been gaining preferences over money in the past few decades, most particularly after World War II. The time where people start preferring the use of credits over money marked the need for governments to provide safety nets for its citizens and companies alike from the possible setbacks of bad credits. Credit report advices are given importance to highlight the needed accuracy on this sensitive type of report. A bad credit report is sometimes worse than having no credit report at all. The exaggeration of the bad parts of the information documented by the credit bureaus can lead to a very bad precision score record. Among the mandated laws on credit reports, Fair Credit Reporting Act is one of the pioneering mandates on free credit reports.

The Fair Credit Reporting Act or FCRA promotes the utilization of credit report advice in establishing a good credit reputation. FCRA is known for its twelve main features.

  1. The FCRA ensures the access to a consumer’s free credit report. The three main credit bureaus are annually required to give free credit reports to consumers which can be accessed through telephone, mail and internet. These free credit reports are then interpreted through credit report advice.
  2. FCRA allows the consumers to challenge any information included in the free credit report in the issues of “completeness and accuracy”.
  3. FCRA provides the proper ways on how to file and pursue a dispute.
  4. If negative information is inserted, the information can not be reinserted without notifying the consumer in five days.
  5. Allows credit bureaus to neglect consumer disputes if they deem the disputes as irrelevant.
  6. Credit Reporting Agency or CRAs may not entertain negative information in excessive periods of time.
  7. Information furnishers are defined as the agencies responsible for gathering data for the credit report.
  8. Information furnishers are obligated to only report 100% accurate information in the FCRA.
  9. FCRA allows consumers to directly dispute the information from the furnishers in addition to the CRAS.
  10. Furnishers should inform the consumer that they have found negative information on the consumer’s credit report.  
  11. Negative information corresponds to a dispute with the information furnisher and CRAs.
  12. FCRA is a good dispute method as long as consumers see that this is not the end of credit repair.

Credit report advice allows the consumers or borrowers to know a way around the technicalities of their credit reports. With the help of laws like the FCRA, the borrowers and lenders are given a leveled ground in compromising their interests.

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