Consumers may find their loan or insurance applications denied for being a risk borrower or client. Lenders or brokers may tell them that this is because the consumers aren’t worthy of the service because of their bad credit history. Consumers who believed they have a good credit score and credit proper behavior might remain at awe.
Fair and Accurate Credit Transactions Act of 2003 or FACT Act aims to enhance the usage of credit information and provide consumers greater access to the information. It also has to goal of providing accurate consumer report and preventing identity theft.
Checking the annual reports can help both the credit bureaus and the consumers as well. Disputes or errors will be the first consideration when checking the reports. Errors can stay on the reports for years if the credit reports are not checked or if the errors are ignored. The errors can be converted to damage when it is an error involving one of the most damaging pieces of information such as judgments or foreclosure. FACT Act provides steps on how a consumer must make in instances of credit reports dispute.
The consumer must contact the credit bureaus directly or indirectly, that is through a reseller. The process won’t cost the consumer charges so it is advisable to do this promptly. The bureaus will conduct a reasonable but careful investigation within thirty days after the notice of dispute was received. The period will be extended to forty-five days if the consumer provides any information relevant to the investigation during the thirty-day period. Upon the deletion of errors or correction of the credit report, the bureaus must notify about the corrections to any person designated by the consumer who have received the credit report. Notifications must be sent to persons who have received the report for employment purposes for the past two years or for other purposes for the past six months.
After the investigation, if the consumer reporting agency, to their own belief, states that the report stands on what it contains and that there are no inaccuracies, the consumer has the right to provide a statement that will clarify inaccuracies in their own words limited to only one hundred words or less. The statement must be attached to the credit file and anyone receiving the reports will be able to view the statements as well.
A free credit report may also be obtained in circumstances of “adverse actions”. Adverse actions, according to the FACT Act, involve a denial or cancellation or any unfavorable change in terms or amount of any insurance or credit. It also includes denial of employment or relevant decisions. The consumer has a right to ask for a free credit report within 30 days after the action from the credit agency indicated by the lender, employer or insurer. The credit agency must disclose the sources of information contained in the reports and the parties who requested the reports.
Consumers are advised not to ignore the law and to be well aware of it. Part of being an educated consumer is being knowledgeable of his or her rights and laws that will affect future financial status.
