The Fair Credit Reporting Act came into law in 1970 to protect citizens’ credit information. Credit reporting agencies are bound by the act to provide accurate, factual, and up-to-date consumer information.
Most importantly, the act ensures that standardized scoring models get furnished with the right information when determining your credit score.
So, What Are FCRA violations?
Any misuse or misreporting of your credit information by the credit bureaus or users of the data, leading to damage to your financial standing, constitutes an FCRA violation.
To help you understand how creditors, credit reporting bureaus, and third-party collectors can breach your rights, here are the common examples of FCRA violations:
Reporting Inaccurate Information
Failure, on the part of creditors, to furnish reporting bureaus or any other agency or institution with accurate information is a violation.
Such inaccurate information can include wrong payment history and debt account balances. Errors can also be due to other people’s debts being reflected in your report.
Reporting Outdated Information
All the information reaching credit agencies is required to be up-to-date. The violation usually results from reporting negative information that has surpassed the prescriptive period as stated by the law.
For example, reporting a credit card default after 7 years or bankruptcy that’s over a decade old is a contravention of the FCRA.
Re-insertion of Damaging Information
Reinsertion of such items into your new report is a violation. The damaging entries include incorrect accounts, erroneous personal information, wrong payment date, and incorrect credit limits.
Infringing on Your Privacy
A major tenet of the FCRA is the privacy of your credit and personal data. To ensure privacy, the act outlines parties that are permissible to request and be furnished with your credit report.
Landlords, auto lenders, banks, student loan lenders, insurance companies, utility providers, mortgage lenders, and potential employers are some of the permissible parties.
Providing your report to a party without a valid need to review your financial information is a violation. To this end, the FCRA is among the major laws that constitute data privacy and protection in the US.
Lack of a Proper Investigation
The Financial Credit Reporting Act entrenches your right to dispute erroneous or incomplete information. Further, the reporting agency or creditor, as well as the FTC is required to conduct proper investigations into your claims.
Investigations are also required to be timely and it’s within your right to get appropriate updates during the fact-finding process.
Any failure in the investigative procedures, including failure to appraise your creditors about the dispute, is a violation.
Mixing Up Your Credit Information
It is possible for credit agencies to include financial information belonging to a stranger in your credit report. Such errors are due to duplicating entries between consumers sharing the same personal information.
For example, your report may be merged with that of a stranger having a name that’s similar to yours. There are also instances of people (erroneously) sharing the same social security number or account numbers.
Inaccuracies of this nature are bound to lower your credit score and limit the lines of credit that you can access.
The FCRA enforces your right to timely access to reports regarding your credit data and how it’s shared with others.
Specifically, creditors are to notify you when they provide credit bureaus with negative information regarding your credit.
Further, any organization or individual that uses such a report to make negative decisions about your job, loan prospects, studies, or rent status is required to notify you of how the report factored into the decision.
It’s also a violation by a reporting agency to conceal sources of negative information about your credit. Lastly, your rights are violated if a creditor doesn’t advise you on your right to dispute errors in your report.
Final Thoughts: What To Do If Your FCRA Rights Are Violated
Be it a creditor, agency, or information user, anyone who violates your FCRA rights does so in contravention of the law and is liable for conviction.
Accordingly, you can sue the party for damages due to refusal of credit, loss of a job, or other financial damages as a result of an infringement of your rights as a consumer.