What are my Consumer Credit Rights?
Federal law carefully regulates how information about your credit can be used. The two most important laws for credit-active consumers are probably the Equal Credit Opportunity Act (ECOA) and the Fair Credit Reporting Act (FCRA).
The ECOA mandates that every consumer who applies for credit has an equal chance to obtain it. This is not a guarantee that credit will be granted, but rather that the factors used to determine whether an application is accepted or rejected will be consistent and consistently applied for all applicants.
The FCRA ensures that consumers’ rights and privacy are protected even as the credit reporting industry makes it possible for credit histories to be transmitted so quickly that stores can offer instant credit to consumers who qualify.
How Can I Learn More About Credit and The Law?
The federal government maintains several informative World Wide Web sites with lots of information about consumer credit issues. These two relate to the FCRA specifically:
http://www.ftc.gov/bcp/conline/pubs/credit/fcra.htm (summarizes the law)
http://www.ftc.gov/os/statutes/fcra.htm (gives the actual text of the law)
Requirements for Accessing Credit Reports
To guard against abuse and to protect your privacy, the FCRA requires that before being allowed access to credit information, businesses must offer reasonable proof that they will be using the information for no other purpose beside those permissible under federal law.
The only time your credit report can be accessed without your permission is in prescreening for credit offers or if a judge subpoenas your credit information. You can opt out of prescreening by contacting the three major credit bureaus, although you will then receive no more pre-approved credit card offers.
Accepted or Rejected?
You have the right to know whether your application for credit was accepted or rejected within 30 days of filing it. If it was rejected, you have the right to know why. The creditor must either immediately give you the specific reasons your application was rejected or provide you with reasons if you ask for them within 60 days. Indefinite or vague reasons are illegal, so ask for specifics.
If you have been denied credit because of the contents of a credit report, the creditor must also provide you with information about how to contact the credit bureau that supplied the credit report. This is one of the few circumstances under which you are entitled to a free credit report directly from the credit bureau.
What If There Is Inaccurate Information in My Credit Report?
The law guarantees your right to dispute inaccurate information on your credit report free of charge. If you find an inaccuracy in your credit report, simply call or write to the credit bureau. The bureau will check with the source of the information and send you an update. The dispute process can take up to 30 days. If you still disagree with the information, you can add your own statement to the credit report. For more detailed information about how to contact the credit bureaus to dispute inaccuracies on your report, see our Dispute Information.