What is the Fair Credit Reporting Act?

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If you’ve been researching what to do when you’ve experienced unfair credit reporting, you’ve probably encountered the Fair Credit Reporting Act in your research. Here are the specifics about how it can help you and what you should do if you’ve experienced unfair credit reporting.

The Fair Credit Reporting Act Simplified

The Fair Credit Reporting Act (FCRA) was signed into law in 1970, and its goal is to make sure that credit reporting agencies are accurate and fair in their reporting and that they make every effort to protect a consumer’s privacy. The Act regulates the reporting agencies, the people who use consumer reports, and the people who use consumer information.

The FCRA’s language is also supposed to empower consumers to report any mistakes on their credit reports. In 2003, an amendment was added that allows consumers to get a free credit report every year from each credit reporting agency so that the consumer can spot mistakes and get them corrected on the report.

If a third-party debt collector reported a debt to a credit reporting company and negatively affected your credit score, your rights as a consumer were violated under the FDCPA. Learn more about what to do when a creditor reports your credit score to credit reporting companies.

The Fair Credit Reporting Act and the FDCPA

Let’s say a third-party collector threatens you by stating that if you don’t pay the debt he’s inquiring about, he’ll report that on your credit report. If he’s trying to collect on a debt that you’ve already paid and then reports that on your credit report, he’s adding false information to your credit report.

The FCRA has stipulations to protect you from this, but this is also an FDCPA violation. In other words, the third-party collector may be breaking two laws at once, which is egregious. If this happens to you, consider hiring an FDCPA attorney to protect you. If you win your case, your credit report and score should return to normal, and you may even get compensation.