Three applause for FCRA!
- Your credit report and credit history play a big role not only in managing your day-to-day finances, but also in helping you make big financial moves like buying a home.
- FCRA facilitates credit monitoring and remediation.
- You also have absolute control over who has access to your credit history.
You probably already know how your credit report and credit score affect your financial life, for better or worse. Unfortunately, the history of consumer credit and the history of legal protections for consumers are not perfectly aligned. Prior to the Fair Credit Reporting Act, which was enacted 52 years ago on October 26, 1970, there were no guarantees of fairness, accuracy or privacy regarding what credit bureaus do with your financial information. was.
Thanks to the FCRA (which has been revised and expanded several times over the last 52 years), the three major credit bureaus (Experian, TransUnion and Equifax) are now required to comply with credit reporting regulations. Read on to learn some ways the FCRA can help you as a consumer.
1. FCRA will help you apply for new credits
The first advantage of FCRA is exactly what you would expect. Have you ever applied for a new credit card and been declined? Don’t worry, it’s in our best interest and it happens for many reasons. , you may have too much credit or a history of late credit card payments. If you have been denied new credit, you may have received formal notice from the creditor in the form of a mailed or digital letter (if you already have an account with the company) detailing the reasons for the denial. There is a nature.
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It’s part of the FCRA, and while rejections may sting, it’s nice to have access to information about why. That way, you’ll know what to change in the future, like raising your credit score or using less of your credit card, before applying for another new card.
2. FCRA helps monitor your credit
Staying on top of critical financial data is very important and credit monitoring is a major part of it. That’s why it’s a good idea to check your credit report regularly so that you’re always on top of the accounts in your name. If you’re ready to make a big financial move, like buying a home, you can see what your mortgage lender knows about you and your credit history when you apply for a mortgage. There are some shady companies that tell you the only way to see your credit report is to pay it off, which is wrong thanks to the FCRA.
AnnualCreditReport.com gives you free credit reports every week from each of the three major credit bureaus through the end of 2023. When it comes to finances, knowledge is power. The FCRA also allows you to freeze your credit, making it inaccessible to potential new creditors (although the current company you hold credit with can see your data). The Internet has made identity theft more common. Freezing your credit will prevent scammers from opening new accounts in your name without your knowledge.
3. FCRA helps repair your credit
Thanks to FCRA, you can access your credit report for free, so you can fix your credit if necessary. Check your credit report carefully for errors such as accounts that don’t belong to you or accounts that are reported as delinquent when you don’t. Unfortunately, credit report errors are very common. In 2021, a Consumer Reports survey found that he found them in a third of respondents. If you find any errors, you have the right to dispute them and have them removed from your report.
The FCRA also includes provisions for opting out of receiving pre-screened credit offers. Whether you’re looking to get your credit back or simply hate receiving tons of credit card offers in your daily email (or both!), visit OptOutPrescreen.com and pick your name from one of these mailing lists. can be deleted. .
4. FCRA will support all finances
Finally, the FCRA helps a lot with finances in general. If you are looking for a new job and your potential new employer wants you to have a background check, including a credit check, you must agree to have it done. You also have the right to be notified if your credit score or history has been used to disqualify you from receiving a job or new insurance policy and which credit bureau provided the information.
Overall, the Fair Credit Reporting Act does a lot to make financial management easier. Before it passed, it was much harder to be an individual consumer in this country. So should you!
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