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The Federal Fair Credit Reporting Act [FCRA] contains laws that are intended to assure that your credit reports are accurate, that they are private, that you have the opportunity to see your credit reports, and that there is a means to allow you to correct errors on your credit reports.
THE FAIR CREDIT REPORTING ACT REGULATES CREDIT REPORTING AGENCIES
Credit reports are maintained by Credit Reporting Agencies [CRAs]. The three CRA’s are TransUnion, Equifax and Experian. Mortgage lenders, car lenders, credit card companies and collection agencies provide information to CRAs about your payment history. CRAs also get information from public records about lawsuits you are involved in and any tax liens that are recorded against you.
CREDIT REPORTING
TIME-LINES
Payment History: Your payment history remains on your credit report for 7 years. This means that any 30-day late payments will remain on the reports for 7 years.
Public Records: Lawsuits and bankruptcy filings will remain on the credit reports for 10 years.
IF YOU HAVE TO SUE, YOUR ATTORNEYS FEES ARE PAID BY THE CREDIT REPORTING AGENCIES
If you find errors on your credit reports and you take the necessary steps to correct the errors and the Credit Reporting Agencies fail to correct the errors, the FCRA provides a way for you to sue the Credit Reporting Agencies and the underlying creditors that furnished the information. If you have to sue to correct errors, the FCRA also provides that the CRA must pay all the attorney’s fees for your attorney in addition to paying for any harm that you suffer as a result of their failure to correct errors on the credit reports.
CREDIT REPORTING AGENCIES
WHAT SHOULD AND SHOULD NOT BE ON YOUR CREDIT REPORTS
Things you will find on your credit reports:
- Mortgage loan, vehicle loan and credit card Payment History
- Charge-Offs
- Collection Accounts
- Student Loans
- Bankruptcy Filings
- Lawsuits
Not everyone reports information to credit reporting agencies. You will only find information about consumer installment loans [mortgage loans and vehicle loans], consumer revolving loans [credit cards and other consumer bank loans], and activity by collection agencies. You will not find medical debts on your credit report unless the bill has gone to a collection agency. You will not find business vendor accounts.
More than anything else, your credit report determines what credit is available to you. Far more than your income or your asset base, your credit report determines what loans are available to you and what the terms of those loans will be. Even a slightly higher interest rate can force you to pay tens of thousands of dollars more on a mortgage loan. With car loans the difference in available interest rates can be even more dramatic. Your credit reports can even determine what jobs are available to you. Many people have errors on their credit reports. It is essential that you correct errors on your credit reports to assure you are getting the best possible terms on loans and to assure that your opportunities are based on your actual credit history.