Fair Credit Reporting Act Flashcards, test questions and answers
Discover flashcards, test exam answers, and assignments to help you learn more about Fair Credit Reporting Act and other subjects. Don’t miss the chance to use them for more effective college education. Use our database of questions and answers on Fair Credit Reporting Act and get quick solutions for your test.
What is Fair Credit Reporting Act?
The Fair Credit Reporting Act (FCRA) is a federal law that was enacted in 1970 and is monitored by the Federal Trade Commission. It governs how consumer credit information is collected, maintained, and used. This legislation seeks to protect consumers from inaccurate or incomplete reporting of their credit history, as well as providing them with the right to access their own personal credit reports for free. The FCRA also mandates that creditors provide a written explanation when denying an application based on the applicant’s credit score or report.Under this act, any individual who has requested a copy of his/her own report must be provided with one at no cost; however, if they require additional copies then fees may apply. The FCRA also requires that all agencies involved in collecting data such as financial institutions and debt collectors must provide accurate and up-to-date information to any agency requesting it for use in assessing an applicant’s creditworthiness. Such agencies are also not allowed to include derogatory remarks pertaining to bankruptcies more than ten years old on an applicant’s file unless specifically asked by the customer themselves. In addition, these same agencies must inform applicants whenever there have been inquiries made into their account within two days of such inquiry occurring. Moreover, it is important for consumers to understand what rights they have under this act so that they can ensure their personal data remains protected against potential misuse or abuse from unscrupulous parties. For instance, individuals have the right to dispute incorrect or outdated items on their files through writing a letter directly addressed to the particular bureau where said item exists; furthermore; this correspondence should clearly outline why said item needs correction before being properly investigated by those responsible for maintaining its accuracy. Finally, consumers are entitled receive notification should any decision about granting them new loans or lines of credit be adversely affected due lack of reliable information found within their reports thus giving them ample time resolve whatever issue may exist prior submitting another request elsewhere which could lead further delays down road instead solving underlying problem quickly without hassle associated with multiple attempts obtaining financing elsewhere without success each time around because one technicality left unresolved previously caused denial first attempt even though all other qualifications might otherwise meet required criteria set forth respective lender(s).