Consumer's Guide to Credit Reporting

If you've ever applied for a charge account, a personal loan, insurance, or a job, someone is probably keeping a file on you. This file might contain information on how you pay your bills, or whether you've been sued, arrested, or have filed for bankruptcy.

Companies that gather and sell this information are called "Consumer Reporting Agencies" or "Credit Bureaus." The information sold by Consumer Reporting Agencies to creditors, employers, insurers, and other businesses is called a "consumer report." Consumer reports generally contain information about where you work and live and about your bill-paying habits.

In 1970, Congress created a law which gives consumers specific rights in dealing with Consumer Reporting Agencies. The Fair Credit Reporting Act protects you by requiring that Consumer Reporting Agencies furnish correct and complete information to businesses for use in evaluating your application for credit, insurance, or a job.

Here are answers to some questions about consumers reports and Consumer Reporting Agencies.


Was I denied credit because of a "bad credit report"?

If you applied for and were denied credit, the Equal Credit Opportunity Act requires the creditor who denied you credit to tell you the specific reasons for your denial. For example, the creditor must tell you whether the denial was because you have "no credit file" with a Consumer Reporting Agency or because the Consumer Reporting Agency says you have "delinquent obligations." This law also requires that creditors consider, upon your request, additional information you might supply about your credit history.


How do I locate the Consumer Reporting Agency that has my file?

If your application was denied because of information supplied by a Consumer Reporting Agency, the company that denied your application must provide you with the name, address and telephone numbers of the Consumer Reporting Agency. Otherwise, you can find the Consumer Reporting Agency that has your file by calling those listed in the Yellow Pages under "credit" or "credit rating and reporting." Since more than one Consumer Reporting Agency may have a file about you, call each one listed until you locate all agencies maintaining your file.

The three major national Consumer Reporting Agencies are Equifax, Experian (formerly TRW) and
Trans Union. Their addresses are as follows:

Equifax
P.O. Box 105496
Atlanta, GA 30348-5496

Trans Union
Consumer Disclosure Center
P.O. Box 1000
Chester, PA 19022

Experian
P.O. Box 2002
Allen, TX 75013

Do I have the right to know what the report says?

Yes, if you request it. The Consumer Reporting Agency is required to give you all the information in your report and, in most cases, the sources of that information. You also have the right to be told upon request the name of anyone who received a report on you in the past 12 months, and you may also request the address and phone number of each such person. (If your inquiry concerns a job application, you can get the names of those who received a report during the past two years.) The Consumer Reporting Agency will also provide you with a written summary of your rights under the Fair Credit Reporting Act.

Is this information free?

Yes, in certain circumstances. If your application was denied because of information furnished by the Consumer Reporting Agency, and if you request a copy of your report within 60 days of receiving the denial notice you are entitled to the information without charge. You are also entitled to one free report once in any 12 month period, if you certify in writing that you:

  • Are unemployed and intend to apply for a job in the next 60 days;
  • Are receiving public welfare assistance; or
  • Believe that your report is wrong due to fraud.

If you don't meet one of these requirements, the Consumer Reporting Agency may charge a reasonable fee, usually about $8.50.

What can I do if the information is inaccurate or incomplete?

Notify the Consumer Reporting Agency in writing. Include your name, address, date of birth and social security number. Send the letter by a means that generates a receipt (certified mail, Federal Express, etc.). Keep a copy of the letter and the receipt.

Be as specific as possible. The agency is required to delete or reinvestigate the items in question. If the new investigation reveals an error, a corrected consumer report will be sent to you, and upon your request, to anyone who received your report in the past six months (Job applicants can have corrected reports sent to anyone who received a copy during the past two years.). If you dispute the accuracy of the information in your file and the Consumer Reporting Agency deletes it, the agency cannot put the disputed information back into your file without notifying you in writing.

If you contact a Consumer Reporting Agency to dispute the accuracy or completeness of information in your file, the agency may forward your dispute to the creditor or other person who furnished the information to the agency. If the creditor furnishes false information to the Consumer Reporting Agency in response to its inquiry, you have the right to sue the creditor.

You should also contact the creditor or other source of information directly. Many creditors have a special address for this purpose, and have a duty to avoid reporting inaccurate information. Also, if you tell anyone that you dispute the accuracy of information, then that person must note that the information is disputed whenever it is provided to a Consumer Reporting Agency.

What can I do if the Consumer Reporting Agency won't modify the report?

The new investigation may not resolve your dispute with the Consumer Reporting Agency. If this happens, have the Consumer Reporting Agency include your version of the disputed information in your file and in future reports. You may submit a written statement of any length to be included in your file, although if the Consumer Reporting Agency helps consumers write a clear summary of the dispute, the statement may be limited to 100 words. At your request, the Consumer Reporting Agency will also show your version or a summary of your version to anyone who recently received a copy of the old report. There is no charge for this service if it's requested within 30 days after you receive notice of your application denial. After that, there may be a reasonable charge.

Do I have to go in person to get the information?

No, you may also request information over the phone. But before the Consumer Reporting Agency will provide any information, you may have to establish your identity by completing forms they will send you. If you do wish to visit in person, you'll need to make an appointment.

Are reports prepared on insurance and job applicants different?

If a report is prepared on you in response to an insurance or job application, it may be an Investigative Consumer Report. These are much more detailed than regular consumer reports. They often involve interviews with acquaintances about your lifestyle, character, and reputation. Unlike regular consumer reports, you'll be notified in writing when a company orders an investigative report about you. This notice will also explain your right to ask for additional information about the report from the company you applied to, or you may prefer to obtain a complete disclosure by contacting the Consumer Reporting Agency. Note that the Consumer Reporting Agency does not have to reveal the sources of the investigative information.

If an employer intends to take any adverse action against you based on a consumer report, whether or not it is an investigative consumer report, the employer must first give you a copy of your report and a summary of your rights under the Federal Fair Credit Reporting Act.

How long can Consumer Reporting Agencies report unfavorable information?

Generally seven years. Adverse information can't be reported after that, with certain exceptions:

  • Bankruptcy information can be reported for 10 years;
  • Information reported because of an application for a job with a salary of more than $75,000 has no time limitations;
  • Information reported because of an application for more than $150,000 worth of credit or life insurance has no time limitation;
  • Information concerning a lawsuit or judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer.

Can anyone get a copy of the report?

No, it's given only to those with certain specified permissible purposes.

Do I have to be told or consent before someone asks for a report about me?

No, a person may request a consumer report without telling you, if they have reasonable grounds to believe that they will engage in a transaction with you to which your creditworthiness is relevant. For example, if you visit a car dealer and ask about buying a car on time, the dealer has the right to run a credit report. But if you just ask about buying a car, it doesn’t.

However, a Consumer Reporting Agency may not provide a consumer report to an employer unless the employer has your written permission. Also, your written permission is needed before medical information may be reported by a Consumer Reporting Agency for credit, insurance, or employment purposes.

What if I think a Consumer Reporting Agency has violated my rights under the law?

You should seek the advice of an attorney. In some cases, but not always, a Consumer Reporting Agency or other person who has violated the Fair Credit Reporting Act must pay damages and your attorney's fee. You have TWO YEARS in which to bring suit.

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