What is the Fair Credit Reporting Act? The Fair Credit Reporting Act is federal legislation to protect you, the consumer, from invasion of privacy, unnecessary credit checks, and denial of fundamental services, such as right to shelter by a landlord or the right to work. It is a federal rule or statute, meaning that regardless of which of the 50 states in which you reside (assuming that you have obtained your U.S. citizenship), you are qualified to be protected by this rule and you may protect your legal rights through a lawsuit against infringing parties in a court of law, if they violate your rights under the Fair Credit Reporting Act. This federal or national law is not be be taken lightly since your right to privacy and your right to be free from defamation of character are enshrined within this Act which was passed by the legislature. But wait! Yo may be asking yourself , "Has someone used credit score to deny me access to some fundamental service?” Yes, very possibly! It is possible that some one has without your permission and illegally obtained a credit score and then decided to deny your application for some service for which you applied. In fact, there are even corporations who have denied people employment illegally because the employer failed to inform the applicants, or future employees, that they used their credit score (which could be inaccurate) as a basis for not hiring them. I know that this sounds crazy, but it’s true! This is the so-called “free America” and yet it violates the rights of its citizens regularly. If one didn’t know better, one might come away with the idea that the federal government allows employers or landlords to violate its citizen’s privacy on a regular basis. However, the federal government tries, albeit feebly, to apply the laws that are already on the books. Let’s hear from the Washington Post what the federal government had to do with one bad situation where a corporation was denying job applicants their rights: For the past few years, Electronic Data Systems corp., the big electronics arm of General Motors Corp., has been screening job applicants by checking out their credit histories. The problem is that EDS neglected to tell the unsuccessful applicants that information about them supplied by credit reporting agencies had played a role in their rejection, according to the Federal Trade Commission. That oversight violated federal law, the FTC charged, and yesterday EDS — without admitting it did anything wrong — agreed to overhaul its procedures and tell affected applicants what happened as part of a deal with the FTC to settle the charges ‘crenshaw). Let’s call a “spade a spade.” When the Washington Post writes that this General Motors corporation “has been screening job applicants,” we know what they really mean and cannot say in print. The Post means that EDS “has been *screwing* job applicants” by denying them a job in their company *only* because they missed a few payments on their electric bill and not based upon their skills and or educational qualifications for the job. Isn’t that a shame and a sad commentary on our society? The Washington Post tries to sound official, but it is truly tragic! What’s interesting here is that the FTC had positive evidence that Electronic Data Systems Corp. is violating federal law, but the government oversight agency allows the corporation to continue operating unhindered on the promise that it will “overhaul its procedures.” If this were an American citizen who had not paid their federal income tax for a few years, would they receive no penalty for late payment of taxes? Would they be allowed to continue on the promise that they would start paying their taxes in the future? Now, you may be starting to understand that the Fair Credit Reporting Act was set up, at least in theory, to protect your personal privacy and the privacy of your personal financial transactions. Why has the violation of your rights become such a big deal? It has become a big deal because the law has been ignored and violated by corporations who do not even receive a punishment for their wrong—doing. It is hard to believe that corporations can be treated so differently from citizens who should have more rights than artificial “persons,” who are legal creatures of the State who made them and allows their existence. Consumers can and will be prosecuted for misconduct, but corporations who violate Federal Law will be let off? Yes, it’s true. As more details are released regarding this case, it is discovered that this single corporation is not the only perpetrator of unjust and illegal hiring practices. Other employers are engaging in the same, shady practices and credit report bureaus have a monopoly on their trade. The article continues: The EDS case is part of a broader look at the credit checks by the FTC [Federal Trade Commission]. It is a sensitive issue because using credit reports to check on new hires is gaining favor among employers. The practice is legal and, at the same time that other screening devices such as lie-detectors have been restricted, it has become increasingly popular among corporations. Indeed, the credit reporting industry, which is concentrated in the hands of three large, highly automated companies, has begun marketing reports specially tailored for use by employers in screening job applicants. The companies are Equifax Inc., Trans Union Corp. and TRW Inc. However, critics contend that credit reports commonly contain errors that could improperly knock an applicant out of the running for a job. Currently, the main protection a job-seeker has is the Fair Credit Reporting Act, which requires that the applicant be notified if a credit report is a factor in their rejection (Ibid.). As this form of discrimination becomes more widespread, it makes people wonder how anyone is hired for a particular job at all! It is one thing for an employer to use a credit check to decide whether to hire an employee for the finance or accounting field. One would naturally expect that someone would need to keep track off numbers on a regular basis in these fields. But if a prospective employee is being hired for a non-financial job, how is their credit score relevant to their job-related skills? For example, if a job applicant has a degree in the Information Technology field and has perhaps missed a few payments on one of their credit cards, how is that relevant to their ability to put computers together for clients or to troubleshoot computer networking issues? In fact, someone who is very “tech-savvy” and who spends quite a bit of their time working on computers may not have time to worry about bills and personal finance and might have a low credit score. Thus, their level of “credit-worthiness” might be an inaccurate portrayal of their ability to get things done in the workplace. What all of this means is that you, as an American consumer, have to be even more paranoid about how others might be using your credit score to deny basic services to you. Ideally, it would be nice to *not* have to worry about obtaining a job or finding a decent apartment rental at an affordable price. But the reality is much different. Discrimination is an everyday phenomenon. Landlords who might have the best or even the *only* apartment rentals for which you would qualify have the advantage over you. In the chess game of life, you have to be very careful about how you move against them when they have already plotted how to move against you. If the apartment complex owner requires you to put your “social security number” on your rental application, ask him or her how that information would be used. Make sure that you read your lease or rental agreement completely and carefully. Check all of the “fine print”! Is there any stipulation (or conditional statement) that allows your landlord to continue to use your credit score against you after you have met the requirements for the initial credit check? If so, do not even bother wasting your time. It’s not worth it!! If your landlord can continue to use your personal, private information against you, then you should not take the time and effort to do business with this corporation. Your landlord might include language about continuing to check your private credit score and that might be illegal. However, the fact that the landlord’s use of your personal information is illegal does not mean that he or she will be stopped unless he or she is sued in court which you may or may not have the time and resources to finish. If this landlord (who looks to be shady or potentially discriminatory based on the language used in the rental application) is the only owner of rental properties in that particular town or city, then remember your insights as a renter! Take the time to consider moving to a new area or looking for a job in a different region. The one factor that landlords have working against their questionable and sometimes shady practices against tenants/renters is that they are subject to competition from other landlords. You might just find a different landlord who has rental units in the same basic geographical area who does not require your “social security number” or who is not as strict about your background information. On the other hand, if you do believe that you have been the victim of discrimination, not primarily based upon your payment history, but upon some other aspect of your personal character, such as your religious belief, then you should cry foul amid contact a lawyer. The landlord cannot deny your rental application based upon your gender or religion, as specified in this article by NOLO. For example, if you are holding a Bible, or Qur’an, or Torah, when you are touring the apartment with your landlord and your landlord seems especially interested in your religious background or faith and asks plenty of questions about your religious commitment and if you are later denied in your application for the apartment rental, you may be eligible to report that fact to the Housing and Urban Development by visiting their site and searching under “I Want To...” and finding and clicking on “File a Discrimination Complaint” or calling the following number: (202) 708-1112. There is no guarantee that you will be able to find a rental home or apartment in your geographical area, but it might help reduce the level of discriminatory practices in your neighborhood. Also, if the discrimination is obvious or blatant enough, you may be able to find a lawyer who will go after the landlord for civil damages (monies), particularly if it is demonstrable as a sustained and regular practice of the landlord to engage in discrimination against a certain class of people. Both Donald Trump and his father, Fred, who started their rental real estate business, have been charged with racial bias in conducting their operations. They were sued by the Justice Department for not allowing any African Americans to rent homes in their projects. One African American couple, the Cashes, even sued Trump for obvious discrimination since they were able to send in white people who immediately got the apartment when the African American couple had just been told that there were no vacancies (Mahler & Eder). In the situation of the violation of your FCRA rights, the landlord would likely try to use your credit score as a legitimate reason for rejecting your rental apartment application. Thus, you would have to show that someone else (who was not discriminated against) who had a lower credit score than you was able to secure the apartment. During the course of your life, eventually someone, including our own government, is probably going to invade your privacy without cause. This may put you at a significant disadvantage when it comes to violations of your privacy and the use of your credit report from one of three agencies. You have to fight back and prove that some corporation unlawfully denied you some benefit based on an artificial credit score. Summary and Explanation The following information is not presented as legal advice. In terms of an expert legal opinion on how to interpret your rights under this federal legislation, a lawyer would need to be consulted. However, put in simple English, you can still grasp and apply the basics of your rights under the Fair Credit Reporting Act without a lawyer. The commentary on the summary provided by the Consumer Financial Protection Bureau is presented within brackets and placed in italics. That is the section where I, as a non-legal expert, present how this information might be construed or applied in your particular situation. “The federal Fair Credit Reporting Act (FCRA) promotes the accuracy, fairness, and privacy of information in the files of consumer reporting agencies. There are many types of consumer reporting agencies, including credit bureaus and specialty agencies (such as agencies that sell information about check writing histories, medical records, and rental history records). Here is a summary of your major rights under the FCRA. For more information, including information about additional rights, go to https://www.consumerfinance.gov/learnmore/ or write to: Consumer Financial Protection Bureau, 1700 G Street N.W., Washington, DC 20552.” [Commentary: This federal law, the FCRA, is designed to protect you, the consumer ,from manipulative and unscrupulous institutions who offer you products and services only iii exchange for you not only paying back the original amount that you borrow from them to obtain these goods and/or services but also paying the excessive interest being charged to your account based on that original loan amount. Watch the fine print of the financial transactions that you are undertaking as a consumer and compare the terms and stipulations to which you are consenting with the federal laws which the institutions are required to follow under the FCRA.] You must be told if information in your file has been used against you. Anyone who uses a credit report or another type of consumer report to deny your application for credit, insurance, or employment - or to take another adverse action against you - must tell you, and must give you the name, address, and phone number of the agency that provided the information. [Commentary: In this type of situation, a bank or credit card company may not make an adverse judgment against you unless they point out to you why they have done so. Of course, any company is not allowed to run a “credit check” or “creditworthiness investigation” on you personally unless you authorize them to do so by applying for some financial benefit from them.] You have the right to know what is in your file. You may request and obtain all the information about you in the files of a consumer reporting agency (your “file disclosure”). You will be required to provide proper identification, which may include your Social Security number. In many cases, the disclosure will be free. You are entitled to a free file disclosure if: [Commentary: Do not fall for online scams where they attempt to charge you money to view your your credit report! Also, never provide your Social Security number online to some outfit which claims to provide a free credit report. Always make the request in writing, f you need to do so, to a legitimate Credit Reporting Bureau or Agency. Those agencies and addresses are provided in the final section: What Does That Mean for Me? Be very wary and suspicious of online websites which attempt to access your private credit file or to improve your credit score by following their online program. Generally, they want to charge you money for services which are, in fact, free when you have the correct information at your disposal.]
[Commentary: This could happen in any number of ways. A landlord could have denied you an opportunity to live in an apartment rental which he or size owns. Many homeless people are turned away from legitimate apartment rentals because they do not have the appearance that is desirable to obtain the apartment. Or, maybe the applicant has not held a job in over six months. What becomes significant about credit checks is how they might be easily abused by landlords. For instance, a landlord might initially approve of your application for a rental bond, but run another credit check (illegally) six months later to determine if you still have a decent credit score. If your score has been lowered because you missed a few payments on one of your credit cards, that should not affect time original contractual agreement that you had with your landlord. Nevertheless, a landlord could use your new (and illegally obtained) credit score to *raise* your current rent, even though your initial contract was for a certain amount per month. Thus, your landlord could, theoretically, continue to use your credit score *against* you, even though you have made every payment faithfully according to time original contract that you signed with your landlord. This is is a sad situation and one that might require a lawyer if your landlord persists in breaking the law.]
[Commentary: You have a basic right to a free copy of your credit report if someone has stolen or is currently attempting to steal your identity or there is suspicious activity on your account which you did not authorize. For instance, if you have left your wallet or purse somewhere and do not relocate it within 24-48 hours, you may want to not only contact any credit card companies with whom you have an open account, but one or more of the credit reporting agencies as well.]
[Commentary: There could be many reasons why inaccurate informational has been posted to your credit file. You may have paid your bills on time, but one or more of your creditors will still report inaccurate data whether due to a clerical error or some other reason. When disputing particular items which you may have paid but which may not have shown up in your creditor’s records, make sure to ask for specific data regarding any unpaid invoices when you are requesting that a credit reporting agency investigate your case and the inaccurate or misleading report which it many contain.]
[Commentary: if this applies to you, you may have to document your status. It may actually be easier to request an initial free copy of your credit report fro in one or more Credit Reporting Bureaus than to document your status of receiving public assistance. Try one of the Credit Reporting Bureaus. If that one does not offer a free copy, then inform them that you are going to seek a free copy from a different Credit Reporting Bureau. They may “change their tune” very quickly!].
[Commentary: See the commentary under “you are on public assistance.” This still might be faster than attempting to document your temporarily unemployed status.] In addition, all consumers are entitled to free disclosure every 12 months upon request from each nationwide credit bureau and from nationwide specialty consumer reporting agencies. See https://www.consumerfinance.gov/learnmore/ for additional information. You have the right to ask for a credit score. Credit scores are numerical summaries of your credit-worthiness based on information from credit bureaus. You may request a credit score from consumer reporting agencies that create scores or distribute scores used in residential real property loans, but you will have to pay for it. In some mortgage transactions, you will receive credit score information for’ free from the mortgage lender. [Commentary: You have the right to not only ask for your score, but to refuse that some outside agency or corporation attempt to access your score. Admittedly, this might be ail uphill battle, but you still have the right to protest when your personal information is being sold to outsiders. What the Federal Government and the FTC, in particular, has done to accommodate your right to privacy is to require that Credit Reporting Bureaus *only* provide information to banking institutions who plan to tender a specific offer of credit to you. The Bureaus cannot randomly sell your credit information to some company who wants to send you " junk mail” or to otherwise invade your personal privacy. This is actually an improvement over the loose regulation which used to exist for the Credit Bureaus (Crenshaw 1993).] You have the right to dispute incomplete or inaccurate information. If you identify information in your file that is incomplete or inaccurate, and report it to the consumer reporting agency, the agency must investigate unless your dispute is frivolous. See https://www.consumerfinance.gov/learnmore/ for an explanation of dispute procedures. [Commentary: Always err on the side of questioning your credit report. No one is paying the Credit Bureaus to do their job accurately amid corporations who would like to dig into your personal information to know how to market you with all types of worthless products are the only ones motivating Credit Bureaus. Thus, it is imperative to question false reports which have been transmitted to the Credit Bureaus about your payment history. Question everything and make the Credit Bureaus do their job to verify the accuracy of the information that they are given. An example would be a vindictive landlord who reports to a Credit Bureau that you missed your last rent payment. In fact, you had paid a deposit which was to be used as your last month’s rent. However, your landlord claims or alleges that there was some unusual “wear-and-tear” in the apartment incurred during your rental period and they used the deposit to rectify that “wear-and-tear.” What happened in reality was that there was no unusual “wear-and-tear” and your landlord pulls this stunt on virtually every tenant that they have. Press the Credit Bureau to find out the real story and not allow a false report that you did not pay your final month’s rent to go on your permanent payment history!] Consumer reporting agencies must correct or delete inaccurate, incomplete, or unverifiable information. Inaccurate, incomplete, or unverifiable information must be removed or corrected, usually within 30 days. However, a consumer reporting agency may continue to report information it has verified as accurate. [Commentary: What this statement of your rights does not spell out is how you go about appealing what you have deemed to be an arbitrary negative attachment to your credit file reflecting your payment history incorrectly. It cannot be stressed enough that you put your concerns about false information on your report into writing. Take the effort to provide concrete evidence (where available) that you have satisfied a particular creditor who may still be trying to report an old debt which was taken care of previously. If you canceled a cell phone contract, but your former company thinks that you are still a customer and continues to bill you as though you are an existing customer, that is going to represent a big problem which you may have to document in writing. Photocopy all letters where you are cancelling contracts with vendors for future disputation purposes!] Consumer reporting agencies may not report outdated negative information. In most cases, a consumer reporting agency may not report negative information that is more than seven years old, or bankruptcies that are more than 10 years old. [Commentary: This is the seven/ten rule that many consumers have not taken the time to straighten out with Credit Bureaus. Credit Reporting Agencies can be very lazy unless you bring up specific points to their attention. You may have to follow up in writing when they do not clear off old or previously satisfied debts.] Access to your file is limited. A consumer reporting agency may provide information about you only to people with a valid need - usually to consider an application with a creditor, insurer, employer, landlord, or other business. The FCRA specifies those with a valid need for access. [Commentary: Goodness! That is so broad that you almost need to read every stipulation under the FCRA. The portion of federal law which concerns “permissible purposes” of releasing you r credit report to outsiders is provided below. It is important to note that employers and/or landlords who do not have a “valid need,” do not have the right to tamper with your personal information and credit score and use that against you. If they do use (or even access) such information illegally, they can be sued by you for violations of federal or state privacy laws.] You must give your consent for reports to be provided to employers. A consumer reporting agency may hot give out information about you to your employer, or a potential employer, without your written consent given to the employer. Written consent generally is not required in the trucking industry. For more information, go to https://www.consumerfinance.gov/learnmore/. [Commentary: What this entails is that you ought to check carefully over every employment application that you fill out. Unless the employer needs your private information, such as a social security number, and unless they indicate the purposes for which they will use that information, do not continue to fill out the application. It is not worth your effort to prostitute your personal, private information to a prospective employer unless they gauranttee in writing to you for what purpose they will access the information.] You may limit “prescreened” offers of credit and insurance you get based on information in your credit report. Unsolicited “prescreened” offers for credit and insurance must include a toll-free phone number you can call if you choose to remove your name and address from the lists these offers are based on. You may opt out with the nationwide credit bureaus at 1-888-5 -OPTOUT (1-888-567-8688). [Commentary: Another option that you have to attempting a universal refusal to receive credit card offers is to contact specific banking institutions which have very high interest rate and inform them that you wish to have your name removed from their mailing lists. That way, each high-interest vendor who is potentially using your information illegally has a direct message from you to discontinue their “services. “] You may seek damages from violators. If a consumer reporting agency,or, in some cases, a user of consumer reports or a furnisher of information to a consumer reporting agency violates the FCRA, you may be able to site in state or federal court. [Commentary: To start court proceedings against a violator of your FCRA rights, you will mostly likely need to find an experienced lawyer who knows consumer law very well. Otherwise, be prepared to engage in hours of research on your case. Identity theft victims and active duty military personnel have additional rights. For more information, visit https://www.consumerfinance.gov/learnmore/ [Commentary: These special situations are covered in more depth at the government websites and are offered to those who might need more consumer protections due to the way in which their personal information has been used.] What Does That Mean for Me? The primary purpose of the Fair Credit Reporting Act is that you, the consumer and American citizen, ought to be protected against unscrupulous bankers and other opportunists who would like to get rich quick off of you and take your hard-earned savings. In addition, it protects you from future employers or landlords who might illegally use your credit score as a basis to discriminate against you when you have not given them written authorization. You cannot allow them to do that to you and your rights spelled out in the FCRA as well as the United States Constitution will not give a great deal of leeway to those who would like to unlawfully use your personal credit information for their own marketing aid other invasive purposes. Here are some of the top Credit Reporting Agencies in the United States along with their physical addresses. Never, ever provide your social security number online!! Always write to the physical locations of the Credit Reporting Agencies in order to clear up mistaken or inaccurate information that they may have on file. So many scam artists online are trying to “phish” or lure you into providing your personal information into their website. Never fall for this trick, no mailer how “free” or “easy” they tell you it will be to obtain a copy of your Credit Report! Take a good, old-fashioned “pen and paper” and write to the Credit Reporting Agency listed below to obtain your credit report: Equifax Credit Information Services, LLC P.O. Box 740241, Atlanta, GA 30374 https://www.equifax.com/ [Some websites will list this information and give you (800) numbers to call. Do not call the phone numbers. Only write to the actual address of the company.] Experian National Consumer Assistance Center P.O. Box 4500, Allen, TX 75013 [Some websites will list this information and give you (800) numbers to call. Do not call the phone numbers. Only write to the actual address of the company.] https://www.experian.com/ TransUnion Consumer Relations P.O. Box 2000, Chester, PA 19016-2000 [Some websites will list this information and give you (800) numbers to call. Do not call the phone numbers. Only write to the actual address of the company.] https://www.transunion.com/ If you are an American citizen, your state will likely provide more information to you about the Fair Credit Reporting Act. Some states have even passed their own privacy rules and regulations which protect you, as a consumer, over and above existing federal law in the FCRA. To learn more, contact your state or local consumer protection agency or your state Attorney General.
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AuthorI'm James Smith, a current Certified Credit Counselor (CCC) and former employee of one the big three credit reporting agencies. I'm here to help you on your path towards a better credit rating and to inform you of your legal rights under the Fair Credit Reporting Act (FCRA). ArchivesCategories |