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The Importance of having Good Credit.
A good credit rating is very important. Businesses inspect
your credit history when they evaluate your applications
for credit, insurance, employment, and even leases. They
can use it when they choose to give or deny you credit or
insurance, provided you receive fair and equal treatment.
Sometimes, things happen that can cause credit problems:
a temporary loss of income, an illness, even a computer
error. Solving credit problems may take time and patience,
but it doesn’t have to be an ordeal.
The Federal Trade Commission (FTC) enforces the credit
laws that protect your right to get, use and maintain credit.
These laws do not guarantee that everyone will receive credit.
Instead, the credit laws protect your rights by requiring
businesses to give all consumers a fair and equal opportunity
to get credit and to resolve disputes over credit errors.
This brochure explains your rights under these laws and
offers practical tips to help you solve credit problems.
The federal Fair Credit Reporting Act
(FCRA)
This agency promotes the accuracy and privacy of information
in the files of the nation’s consumer reporting companies.
Under the Fair Credit Reporting Act. You have the right
to receive a copy of your credit report. The copy of your
report must contain all the information in your file at
the time of your request.
Each of the nationwide consumer reporting companies – Equifax,
Experian, and TransUnion – is required to provide you with
a free copy of your credit report, at your request, once
every 12 months. The companies are rolling this out across
the country during a nine-month period. By September 2005,
consumers from coast to coast will have access to a free
annual credit report if they ask for it. For details, see
Your Access to Free Credit Reports at ftc.gov/credit.
Under federal law, you’re also entitled to a free report
if a company takes adverse action against you, like denying
your application for credit, insurance, or employment, and
you ask for your report within 60 days of receiving notice
of the action. The notice will give you the name, address,
and phone number of the consumer reporting company. You’re
also entitled to one free report a year if you’re unemployed
and plan to look for a job within 60 days; if you’re on
welfare; or if your report is inaccurate because of fraud,
including identity theft.
Solving Your Credit Problems.
Your credit report can influence your purchasing power,
as well as your opportunity to get a job, rent or buy an
apartment or a house, and buy insurance. When negative information
in your report is accurate, only the passage of time can
assure its removal. A consumer reporting company can report
most accurate negative information for seven years and bankruptcy
information for 10 years. Information about an unpaid judgment
against you can be reported for seven years or until the
statute of limitations runs out, whichever is longer. There
is no time limit on reporting information about criminal
convictions; information reported in response to your application
for a job that pays more than $75,000 a year; and information
reported because you’ve applied for more than $150,000 worth
of credit or life insurance. There is a standard method
for calculating the seven-year reporting period. Generally,
the period runs from the date that the event took place.
Credit Scores
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