Wrongful Credit Reporting Rules
The guidelines for proper credit reporting are outlined in the Fair Credit Reporting Act (FCRA) of 1977. The FCRA defines the proper methods for reporting accounts to ensure that each individual possesses a fair and accurate credit report.
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Facts
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The FCRA allows consumers to dispute entries in their credit reports that are being reported incorrectly. Individuals may file disputes with both the credit bureaus and the creditor that is reporting the error.
Time Frame
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Section 611 of the FCRA states that each credit bureau has 30 days to investigate a formal dispute by a consumer by attempting to verify the item's accuracy with the creditor that is reporting it. If the account cannot be verified, it must be removed from the consumer's credit history.
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Benefits
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The strict rules concerning wrongful credit reporting allow individuals to remove errors from their credit reports that would otherwise damage their credit scores and impair their ability to qualify for loans, credit cards, employment and even housing.
Considerations
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Each consumer is entitled to a free annual credit report from each credit bureau in order to review it for reporting errors.
Effects
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Individuals are permitted to sue creditors that refuse to change incorrect entries on their credit reports.
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References
Resources
- Photo Credit Image by Flickr.com, courtesy of Casey Serin
