by Dan Cunningham

The FCRA or the Fair Credit Reporting Act is a Federal law that was originally enacted by Congress in 1970 to encourage the equality, truth and the privacy of personal information compiled on credit reports by credit reporting agencies. It has often been amended to further protect consumers and the last amendment took place in December of 2003.

Credit reporting agencies are companies that are in the business of collecting, compiling and selling information on consumers for the goal of credit evaluation. The three main credit-reporting agencies are TransUnion, Equifax and Experian.

The FCRA gave consumers the right to dispute and contest any information found on a credit report on the foundation of truthfulness and completeness. After a dispute is issued the credit reporting bureaus have 30 to 45 days to confirm the ownership and the correctness of the disputed accounts. If they are not able to offer the substantiation within the time frame then the disputed information must be deleted from the credit report.

The credit reporting agencies have a number of other tasks under the FCRA, which include providing a credit report to the consumer. Prior to 2003 the consumer was required to pay for this report but an amendment in 2003 has given consumers the right to receive one free credit report from each of the main credit reporting agencies one time per year. All the consumer has to do is demand it. If credit is denied on the basis of what is enclosed in a report, the bureau with the uncertain information must also provide a report.

Oftentimes when a negative mark is disputed it is removed from the account. Under the FCRA the disputed information cannot be reinstated without the credit bureau contacting the consumer in writing.

The FCRA also defined a limit as to how long negative information can stay on a report. On average if must be removed within 7 years from the occasion of delinquency with the exclusion being a bankruptcy that can last for 10 years and a tax lien that can stay put on the report for 7 years after it is paid off.

The credit reporting agencies receive many disputes and it has been projected that as many as 40% of disputed information is not verified within the time limit and must be removed from the report. Consumers can use that fact for their benefit however; truthful and accurate information should always remain on the report even if it is unhelpful.

A FCRA gave consumers the right to argue inaccuracies and errors and to do the work to repair their credit. Credit repair takes time and patience but it can be accomplished by doing it yourself or by hiring a professional company that specializes in credit repair.