Federal Laws Protecting You and Your Credit Files
The Fair Credit Reporting Act (FCRA) is intended to ensure the accuracy and fairness of the credit reporting system—essentially the gathering of consumer information by credit bureaus and the sharing of that information with lenders, landlords, insurance companies and others. The law states who may access your credit report and the "permissible purposes" for obtaining your information. The FCRA also outlines how long negative information, such as a bankruptcy, may remain on your credit report. The FCRA requires that information on your consumer report be complete and accurate, and gives you the right to dispute errors and have them investigated, generally within 30 days. The law also allows you to block or "opt out" of having your information used by companies that make unsolicited offers of credit or insurance.
The Equal Credit Opportunity Act (ECOA), which prohibits discrimination in credit transactions
for a variety of factors (including race, color, sex and religion), also makes it illegal to discriminate against you because you have exercised your rights under the FCRA. For example, the ECOA requires a
creditor to notify you of an adverse action on an application. If the action was based on inaccurate information on your credit report, you may dispute the information without fear of intimidation or retaliation by the creditor.
The Fair Credit Billing Act, which establishes procedures for correcting errors on credit cards and similar accounts, includes consumer protections if you withhold payment while disputing a charge. One such protection directly involves your credit file, explains Janet Norcom, an FDIC attorney. "Once a creditor has received your notice of a billing error, it may not threaten to report you to a credit bureau for non-payment," she says. "Your credit rating is protected while you are settling the dispute."