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The Importance of Understanding Your Credit Report

On Behalf of | Jan 14, 2013 | Consumer Protection

Your credit report is the foundation of your credit score.  Because we live in a financially driven society understanding your report and the laws enacted to protect you if there are errors on your report are now more important than ever.

Educating yourself on the consumer laws, known as the Fair Credit Reporting Act (“FCRA”), is essential.  If you have inaccuracies in your credit report, it your responsibility to identify the error and take the appropriate steps to correct it.  We cannot rely on the credit reporting agency or the creditor reporting the information despite that it is their legal obligation to investigate into your claims.

Your credit report is a summary of your credit history.  It reports your accounts both open and closed, negative and positive.  It contains information about where you have lived and worked, whether you have a judgment against you from a lawsuit and whether you have filed for bankruptcy or have tax liens.  All of the information contained in your report will affect your ability to obtain a loan, open a bank account or credit card, get a job, be approved for a mortgage and even rent an apartment…making checking your report for errors and accuracy extremely important to your financial well-being.

While it is important to review your report regularly, you must review it with a clear understanding of your rights under the FCRA so you can protect yourself from errors and inaccuracy.  The FCRA provides the consumer protection, should a report contain inaccurate information.  It holds both the credit reporting agency(ies) and the creditor(s) responsible for the errors after you put them on notice by disputing the inaccurate information.

Under the FCRA you have a right to dispute the inaccurate information with the credit reporting agencies and they are obligated under the law to provide a response to your dispute within 30 to 45 days of receipt.  As a consumer attorney, I encourage you to dispute in writing and provide supporting documentation, if available,  to accompany your dispute.  I advise against on-line disputes.  While it provides a quicker response to your request for investigation, it is not as thorough, limits what information you can provide to the credit bureaus, and usually ends up in needing a second dispute.  While waiting for your dispute results or if the response is not the end result you were hoping for, the FCRA allows you to add a 100 word statement to your report explaining any accounts or information you disagree with.  The credit reporting agency will include your statement on all future reports and will even redistribute reports that were requested in the recent past including your consumer statement.    Moreover, if the information that remains on your credit report is inaccurate or misleading, and that information causes harm in the way of lost credit, insurance or employment opportunities, then you are entitled to recover money for those damages, along with attorney fees and costs.

If you need assistance in reviewing your report or clearing up information that is inaccurate and negatively affecting your credit report, contact SmithMarco P.C. for a free case review.