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What Is The Fair Credit Reporting Act And How Does It Affect You As A Consumer?

By Derek Brown
Published: Saturday, December 11th, 2010

Credit reports started about a hundred years ago. It was used primarily to address the needs of merchants of assessing their prospective customers. How the credit report looks like before is actually different from how it looks like at present for the reports compiled way back history includes only the negative financial information about the people. Merchants share this information with each other however this remains inaccessible for the customers.

It is quite funny to know that you might have a record that’s running without your knowledge. It is like you are under a private surveillance where you are totally clueless what things are written about you at the end of the day. That is exactly the problem. People cannot do any kind of verification of what is negatively written about their financial and debt management. Moreover this information that is of high risk of being erroneous is shared by merchants thus the spreading of wrong data can always happen.

It was just in 1971 that the act to address the needs to protect consumers came into existence. The Fair Credit Reporting Act was passed to aim at increasing accuracy in credit reports. Credit reports are crucial information that can actually influence people’s lives either in a devastatingly negative way or in a positive manner. This act provides consumers specific rights when it comes to credit reporting.

Now people have the right to be informed. The private surveillance before can no longer be existent now that credit reporting agencies who are compiling your credit related activities are mandated by the law to provide consumers free copy of their credit report once every 12 months.  Aside from your free credit report copy you also must be furnished with a print of the list of people who requested for an access to your file. Going further with your right to information companies who are turning your applications down for instance a loan application must provide you with the name, address and contact information of the credit bureau to which they had the basis to turn you down.

The right to privacy is also dealt with by the Fair Credit Reporting Act. People who are trying to access your credit file can only be entertained by the credit bureaus if their concerns were approved by the FCRA other than that your information is off limits. For your current or prospective employers to have an access to your information they will need to have a written report from you allowing hem to view your data.

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