Fair Credit Reporting Act - Credit Rights for Home Buyers

The Fair Credit Reporting Act, or FCRA, was made into law by Congress to make sure that the information on your credit report is legitimate. This Act gives you, as the consumer, many rights that you may not be cognizant of. This is important as a homeowner or as a potential home buyer because your credit report will establish whether or not you qualify for a loan. If you do qualify, the information on your credit report will serve as the foundation for what interest rate the mortgage lender offers you. If there are mistakes on your credit report, you could be rejected for a loan or offered a higher interest rate than you should receive. Mistakes on your credit report can be costly.

Mistakes on Your Credit Report Are Often Unobserved Until You Buy a Home

A mistake can remain on your credit report for years and may go by unnoticed until you try to make a major purchase like a home. Some mistakes are caused by the sheer volume of paperwork that the three credit reporting agencies deal with each and every month, while other errors are typos or other clerical errors. There could be a mistake with your social security number, your loan application or even a variation of your name that can create havoc on your credit report.

Property Buyers can Fight Back when Credit Report Mistakes Occur

Due to FCRA, you have seven basic rights in regards to your credit reports. These are:

-Lenders must tell you if you are refused credit (or loans) because of your credit report.
-You have the right to know what is on your credit report at any time.
-You can challenge incorrect information with the credit bureaus.
-Inaccurate data must be removed from your report or fixed.
-You can dispute incorrect information with its source.
-Your credit report must not contain old information.
-Only those with your permission may look up your credit report.

It is important to realize that credit reporting agencies report and are not accountable for whether the information on your report is accurate. That responsibility lies on the consumer's shoulders. When you begin a dispute with one of the agencies, keep meticulous records and always make sure you have a copy of the proof that you submit to them to dispute the item. Also, look into all three agencies for inaccurate information and start a dispute with all three agencies for each item that is wrong.

Vigilance is the Optimum Way to Guard Your Credit Report and Good Name

Please know that you may have to dispute information several times. Maintain records of these disputes and any supporting evidence you use. It is always a smart idea to dispute information at all three bureaus at the same time. These companies do not compare notes on reports and there is no other way of ensuring that all inaccuracies are taken care of. Know your rights and specifics about how long particular data may stay on your credit report. Be vigilant, and you will be able to feel better about your credit score.