Credit Reports

I sincerely believe […] that banking establishments are more dangerous than standing armies. – Thomas Jefferson

How does it work?
Most students already have a credit report on file at one or more of the three nationwide credit reporting agencies: Equifax, TransUnion, and Experian. This credit report follows you wherever you go. It provides prospective lenders with a summary, called a “consumer report”, of how you have paid or not paid your debts. Having a bad credit report can seriously limit your ability to obtain loans, to finance purchases, and, sometimes, to rent an apartment. For these reasons, it is important that you pay your bills promptly, that you not buy on credit when you cannot realistically meet payment terms, and that you periodically check your credit report at the three credit reporting agencies to insure its accuracy. This is done by obtaining your credit report.

Equally important is knowledge of your rights under the Federal Fair Credit Reporting Act with respect to your consumer credit report.

What is a consumer report?
Under federal law, a “consumer report” is defined as any written, oral or other communication of information by a consumer reporting agency, concerning a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used as a factor in determining a consumer’s eligibility to obtain such things as credit or insurance for personal, family, or household purposes, employment purposes or other authorized purposes.

What Is A Consumer Reporting Agency?
Under federal law, a “consumer reporting agency” is defined as any person, which for fees, dues, or on a cooperative nonprofit basis, regularly engages in the business of collecting and evaluating consumer credit information for the purpose of providing consumer reports to authorized third parties.

Who May Request Your Credit Report?
Federal law sets out the purposes for which your credit report may be used and who can request it. Prospective lenders, insurance companies, landlords, and employers are among those authorized to review your credit report.

What are your rights with respect to the information in your credit report?
Under the Federal Fair Credit Reporting Act (15 USC 41), you have certain rights whereby you can insure that your credit report is accurate and up-to-date. These rights include:

  • The right to know the contents of your credit report. The Credit Bureau may require that you review your file in person or submit a written request for a copy of it. You may have to pay a small fee.
  • The right not to have obsolete information in your credit report. Federal law sets forth categories of information that can be reported and, for each category, the length of time it may be reported.
  • The right to demand that the Credit Bureau or other consumer reporting agency investigate and delete inaccurate information that can no longer be verified.
  • The right to submit a brief written statement giving your version of any “disputed debts”.
  • The right to require the Credit Bureau to notify certain users of your credit report of the deletion of inaccurate information and to provide these users with a copy of your statement concerning a disputed debt. These users include any person you designate who has received your credit report for employment purposes within the past two years and all persons who have received your report for any purpose within the past six months.
  • The right to receive from the user of your credit report the name and address of the consumer reporting agency which reports adverse information which results either in your being denied credit or insurance or in your being charged a higher cost for credit or insurance.
  • The right to have the three major credit-reporting bureaus place an alert or a freeze on your credit report. An alert asks creditors to contact you before new loans or credit cards are issued in your name. A freeze allows for more protection than an alert, as it blocks access to your credit report. A creditor would be required to have you report a PIN to the credit report so that they could look at your credit history in relation to your application.

Remedies for Violations of your Rights
For willful violations of your rights, federal law authorizes a consumer to sue for and recover his or her actual damages, punitive damages, court costs and attorney’s fees. For negligent violations, a consumer is entitled to recover actual damages and attorney’s fees. To preserve these remedies, the consumer must file a lawsuit in state or federal court within two years from discovery and five years from the date the violation occurred.

Obtaining Your Credit Report

To order a copy of your credit report, contact one or all of the following credit bureaus. Remember, credit bureaus compile their own data independently and may list inaccurate information. A credit report from one credit bureau may not contain the same information as a credit report from another bureau.

It is your responsibility to make sure personal and credit information is accurate, particularly since lenders will use that information to determine whether or not you can obtain credit, mortgages, insurance, and employment.

Equifax
Equifax
P.O. Box 740241
Atlanta, GA 30374
1 (800) 685-1111

TransUnion

P.O. Box 2000
Chester, PA 19022
1 (800) 888-4213

 Experian (formerly TRW)

National Consumer Assistance Center
P.O. Box 2104
Allen, TX 75013
1 (888) 397-3742

The Big Three national credit bureaus typically charge consumers to review a credit report. There are situations, though, in which a report can be obtained at little or no cost. These include:

  • Being turned down for credit, employment, or insurance based on the report’s information within the last 60 days
  • Being unemployed or on public assistance
  • Being a victim of fraud

Links

Verified June 2011