In 1970 a Federal law was enacted by Congress to protect consumers from inaccuracies on their credit reports. This law is called the Fair Credit Reporting Act or the FCRA and it was intended to promote the fairness, truth and confidentiality of individual information compiled on credit reports by credit reporting agencies.
The main credit reporting agencies are TransUnion, Equaifax and Experian. They are in the industry of collecting and compiling information used for credit evaluation and other purposes.
A consumer now has the right to argue and dispute any information found on a credit report on the foundation of completeness and correctness. After a dispute is received the credit bureaus have 30 to 45 days to attest to the correctness and the ownership of the disputed credit. If they are not capable to offer that verification within the time frame then the negative listing must be deleted from the report.
The FCRA has also specified other responsibilities to the credit reporting agencies. Each year the credit bureaus must give a free credit report to any consumer who requests one. Prior to 2003 the consumer had to pay for this report but a 2003 amendment changed this and now they must make available one report each year at no fee to the consumer. If credit is denied on the foundation of information provided in the report the bureau with the harmful reporting must also provide a report upon demand.
The FCRA gave consumers the right to dispute and contest any information found on the report. If information is deleted as a result of the dispute the credit-reporting agency cannot put back the negative information without contacting the consumer in writing.
The FCRA also defined a limit as to how long negative information can stay on a report. Typically if must be removed within 7 years from the time of delinquency with the exemption being a bankruptcy that can last for 10 years and a tax lien that can stay on the report for 7 years after it is paid off.
The credit reporting agencies receive many disputes and it has been estimated that as many as 40% of disputed information is not verified within the time limit and must be removed from the report. Consumers can use that fact for their advantage however; reliable and accurate information should always remain on the report even if it is negative.
Credit repair on credit reports can be accomplished due to the rights given by the FCRA. The consumer can do credit repair themselves or there are also professional companies that concentrate in credit repair. It takes time and patience to be successful at credit repair but it can be accomplished.
