You may already know that you have the right to claim a free copy of your credit report once every 12 months. You might also know that you can dispute any errors appearing on your credit reports with the three credit reporting agencies (CRAs): Equifax, TransUnion, and Experian.
Both of these rights are conferred to you under a federal law known as the Fair Credit Reporting Act (FCRA). Here are the various rights and protections that law grants to American consumers:
The Right to Free Credit Reports
As mentioned above, the FCRA gives you the right to a free credit report (aka file disclosure) from each of the three credit bureaus once every 12 months. To claim these free reports, simply visit AnnualCreditReport.com – you don’t need a credit card. You may also be entitled to additional free reports under any of the following circumstances:
- You are an identity theft victim who has placed a fraud alert on your credit file.
- You receive public assistance.
- You’re unemployed but plan to apply for employment within the next two months.
- Someone has taken adverse action against you (a credit denial, for example) as a result of information on your credit.
The Right to Dispute
You have the right under the FCRA to dispute information on your credit reports which you believe to be inaccurate. When a CRA receives your dispute they have 30 days (sometimes 45 days) to investigate your claim. At the end of the investigation the disputed information must be either (a) verified as accurate, (b) corrected, or (c) deleted.
Regardless of the outcome, the CRA must inform you of the results of your dispute. This entire process is free of charge if you handle the dispute process on your own.
- Related: How to Dispute Credit Report Errors
Limits to How Long Negative Information Can Remain on Your Credit Reports
The FCRA places time limits that control how long negative information can remain on a consumer’s credit report. Though a few negative items are allowed to remain on your credit reports indefinitely (e.g., unpaid tax liens and unpaid Federal student loans), most derogatory credit entries must be purged from your credit after a period of 7 to 10 years.
The Right to Limit Access to Your Credit Reports
The FCRA also dictates who has “permissible purpose” to access your credit reports. Your reports cannot be legally accessed by the person you met on an internet dating site, for example, or your nosy next-door neighbor. However, permissible purpose to access credit reports can be granted in all the following circumstances.
- You can access your own credit reports as often as you like. If you have exhausted all your freebies, then you might be charged a fee (or you could search for a free online credit report provider as well).
- Your credit report can be accessed as part of a “credit related transaction.” In other words, if you apply for a loan, credit card, or new insurance policy, then a lender or insurance provider has the right to request your credit report.
- Your credit report can be accessed if a court order has been issued.
- Your credit report can be accessed for employment screening purposes. However, your written consent is required.
- If you have an account with a creditor, the FCRA also allows the account provider to access your credit reports as part of the account management process.
The Right to ‘Opt Out’ of Prescreened Offers
Have you ever checked your mail and discovered a pile of “you’re preapproved” credit card offers? If so, then there’s a good chance that at least a portion of your credit information was accessed by the company that sent you the offer.
If you no longer want companies to have access to your credit information for prospecting purposes, then you have the right under the FCRA to “opt out.” You simply need to visit OptOutPrescreen.com if you wish to exercise this right. This is also free of charge.
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John Ulzheimer is an expert on credit reporting, credit scoring, and identity theft. He has written four books on the topic and has been interviewed and quoted thousands of times over the past 10 years. With time spent at Equifax and FICO, Ulzheimer is the only credit expert who actually comes from the credit industry. He has been an expert witness in over 230 credit related lawsuits and has been qualified to testify in both federal and state courts on the topic of consumer credit.