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Consumers Should Know Credit Report Rights

By Faye Mergel
Published: Sunday, September 6th, 2009

Credit specialists advise consumers to be more mindful of their rights to avoid being cheated or scammed. A couple of weeks ago, the Federal Trade Commission (FTC) imposed $77,000 worth of civil penalties on two railway companies for violating the rights of employees and job applicants. Quality Terminal Services and Terminal Services fired employees and rejected job applicants because of their credit reports. Last August 13, United States District Court for the District of Colorado ruled that the practice of these two companies is against the Fair Credit Reporting Act (FCRA). A court also included “permanent injunction and other equitable relief to its ruling.

Consumers Should Know Credit Report RightsCompanies cannot fire employees because of negative items on found or stated in their reports, no matter how numerous they may be. More importantly, employers cannot look into an individual’s credit report or record without asking permission or getting information. When firing job applicants, a company must show the report and inform applicants how to get one. Finance experts add that unless they know their rights, consumers will not be able to protect themselves against unfair practices like this.

Experts encourage consumers to check their reports annually so they can be protected against impartial practices by employers. Under this Fair and Accurate Credit Transactions Act (FACT Act), consumers have a right to one free credit report from each of the three biggest reporting companies in country: TransUnion, Equifax, and Experian. The FTC also cooperated with three major credit bureaus to create annualcreditreport.com, which allows consumers to get credit reports online for free.

Experts say that an increasing number of identity thefts are one of the major reasons why consumers should check their reports more often. By knowing some information about a consumer, a person can open a new account under somebody else’s name. A consumer will just then be surprised that a credit company is calling to ask payment for a loan or debt he has not made. Most bureaus encourage consumers to be careful about important information such as credit-card numbers, ATM pin numbers, PPS numbers, passports, and dates of birth. Experts advise consumers to be more active in protecting their personal and financial information and to remember people whom they give it to.

Credit specialists also warn consumers that inaccurate information and typos in their credit report will harm credit scores. They should check if all the information in their accounts is accurate and updated. Efforts of consumers to settle payments promptly will be wasted if their credit reports have not been updated on a regular basis.

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