The Fair Credit Reporting Act Guards Future Home Buyers from Mistake

By: Lee Bell
Submitted: 2008-10-07 18:00:43
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Knowing What Is on Your Credit Report Can Pay Off when Purchasing a Home

Lenders, banks and other lending institutions all use your credit report to figure out whether or not you qualify for a home loan and if you do, what rate of interest you will qualify for. Several factors on your credit report have a direct influence on your credit score. Regrettably, mistakes are often made on your credit report that can cost you money or prevent you from getting the loan that you need in order to buy a home. To help consumers make sure that the information on their credit report is accurate, Congress passed the Fair Credit Reporting Act (FCRA). This piece of legislation imparts to the consumer more power over their credit report.

Unfortunate Mistakes Frequently Happen on Credit Reports

It is a sad truth that mistakes occur quite often on credit reports. Each of the three credit reporting bureaus receive nearly one billion entries per month. With all of this data passing through, it is easy to see that the situation is rife for trouble. Some of the causes that mistakes are made include clerical errors. Perhaps that nice girl at the department store typed in your application incorrectly. Or, maybe the loan officer's assistant misread your social on your loan forms. Sometimes, we use different versions of our names to apply for different things.

Property Buyers can Fight Back when Credit Report Mistakes Occur

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

  • Lenders must inform you if you are denied 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 dispute incorrect information with the credit bureaus.
  • Inaccurate data must be removed from your report or fixed.
  • You can dispute inaccurate information with its source.
  • Your credit report must not contain old information.
  • Only those with your permission may gain access to your credit report.

Be aware that the credit reporting companies are not responsible for mistakes made on your credit report, they simply pass on the information that others have turned in. It is up to you to keep tabs on the information on your reports and to challenge any inaccuracies. The companies are then required to investigate all disputes made by you. Incredibly, many consumers are not aware of what is on their reports. They do not monitor it regularly, and are thus can not ensure that they are treated fairly under FCRA. Remember, you have rights, but you must exercise them!

Do Not Give Up on Getting Corrections Made to Your Credit Report

Many consumers do not consistently monitor their credit reports, or if they do, they do not take the time and effort to correct mistakes on their reports. You must recognize that you may have to dispute a mistake more than once. However, if you persist with the agencies and make your disputes, it will really pay off in the end when your credit score goes up.

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Article source: Expert Articles

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