Understanding the Fair Credit Reporting Act
Your credit has a huge impact on your life. If it misrepresents you, it might stand in the way of your attempts to secure housing or property, and it could even prevent you from making purchases necessary to your survival. Fortunately, laws like 1970’s Fair Credit Reporting Act, or FCRA, guarantee consumers specific legal rights for controlling how their credit information is used. Here’s a breakdown of what the FCRA might mean for you.
What Is the FCRA?
The Fair Credit Reporting Act lays down ground rules for consumer credit reporting agencies, or CRAs, including the minimum steps they need to take to ensure their data is as accurate as possible. In addition to needing to provide you with notice about the information they store, CRAs like Equifax, TransUnion and Experian must update their data on a routine basis. For instance, negative information such as delinquencies and paid tax liens can only stay on your report for seven years, while bankruptcies have to be removed after ten years. If a CRA wants to start reporting negative information it previously removed because you filed a dispute, it needs to notify you in writing within five days.
The FCRA also regulates creditors, collection agencies, courts and other institutions that provide CRAs with the information they use to create your credit reports. These entities need to ensure they only give CRAs complete, accurate data and investigate all problems promptly by taking some form of action within 30 days of a dispute being filed. They also have to send you one month’s notice about any negative information that could show up on your report.
Finally, the FCRA dictates what employers, lenders, insurers and others can do with reports. There are a limited range of acceptable purposes for using a report, and those who wish to do so generally require your permission. Misuse of such data is also punishable by law.
What Should I Do When I Suspect My FCRA Rights Have Been Violated?
The FCRA permits consumers to file lawsuits seeking different sums based on the circumstances of their cases. For instance, you may be able to sue for statutory damages if someone’s abuse of your report harmed you. If you lost money as a result of their actions, you can sue for actual damages. Many consumers attempt to recover the attorney’s fees and court expenses they incur in their pursuit of justice. It’s also worth noting that you can sue for punitive damages, or fines designed to teach the violator not to commit similar actions in the future.
Of course, as with any legal action, you need to build a strong case to maximize your chances of winning an award. With suspected FCRA violations, the key determining factor is whether you can prove that the violation was willful, or taken in a manner that was intentional, negligent or reckless. There are also fines for frivolous lawsuits and abuses of FCRA protections, so it’s critical to have your case evaluated by an attorney before taking formal action. If you suspect your credit reporting rights have been violated, contact Anchor Law Firm for a free consultation now.