FCRA - Use it to Protect Your Credit Score

Credit for Homeowners - Fair Credit Reporting Act

The Fair Credit Reporting Act, or FCRA, was passed into law by Congress to make sure that the information on your credit report is authentic. This Act gives you, as the consumer, many rights that you may not be aware of. This is important as a homeowner or as a potential home buyer because your credit report will establish whether or not you qualify for a loan. If you do qualify, the information on your credit report will serve as the basis for what interest rate the mortgage lender offers you. If there are mistakes on your credit report, you could be denied for a loan or offered a higher interest rate than you should receive. Mistakes on your credit report can be costly.

Mistakes on Your Credit Report Often Go Unnoticed Until You Buy a Home

A mistake can remain on your credit report for years and may go by unnoticed until you try to make a major purchase like a home. Some mistakes are caused by the sheer volume of paperwork that the three credit reporting agencies deal with each and every month, while other mistakes are typos or other clerical errors. There may be a mistake with your social security number, your loan application or even a variation of your name that can ruin on your credit report.

Homeowners Must Take the Initiative Regarding their Credit Report

When you discover that there is a mistake on your credit, or if you suspect that there might be a mistake, it is important to understand the rights that FCRA gives you as a consumer. First of all, a lender must let you know if you have been denied credit because of your credit report. Next, you have the right to know what is on your credit report anytime you what to see it. You also have the right to dispute information that is incorrect on your credit report. According to the law, any information that is not correct on your credit report must be changed immediately. You credit report can not contain outdated information, additionally you have the right to dispute wrong information with the original creditor. Lenders and other financial institutions must obtain your permission before they can access your credit report.

The credit reporting bureaus are not accountable for the data on your credit report. To monitor whether or not the information is accurate is is the responsibility of the consumer. If you initiate a dispute, the credit reporting company is required to follow up on it with you. The problem is that many individuals do not habitually monitor their credit reports, and therefore they are completely surprised when they find out that there is a mistake on their credit report. FCRA protects your rights as a consumer, but unfortunately many people do not use or understand their credit rights.

Persistence is the Secret to Protecting Your Credit

Unfortunately, it is very true that if you do discover a mistake on your report you may have to dispute it several times before it is expunged from your credit report. During this time, it is very important that you keep detailed records of the dispute and be sure to keep copies of any evidence you use to sustain your claim. Also, consider making the dispute with all three national credit agencies at the same time, since a mistake on one agency's report that is corrected will not be fixed on the other reports unless you make the dispute with those agencies as well. Learn the details about how long information can stay on your credit report and you will gain the reward of an improved credit score.