The Fair Credit Reporting Act (FCRA) and the recent update to this law called the Fair and Accurate Credit Transactions Act (FACTA) protect consumers from inaccurate information reported by credit bureaus and the privacy of that information. what does this mean to you?

When you make purchases on a credit card, make payments to your accounts, open new bank or credit accounts, borrow money, buy a house or a car, and even fund your education, your financial information is reported by creditors and lenders to a credit office.

The three major credit bureaus that serve as clearinghouses for this information are Equifax, Experian, and TransUnion. Each lender and credit company may report your information to a different bureau, depending on the location of the business and the service agreement between the companies, so each credit bureau may print very different information on your credit report.

Under the FCRA, you have the right to know what’s in your credit report if you ask. You can contact each of the credit bureaus separately and pay for a report at any time. However, if a business denies you credit, employment, or insurance, you can request a free copy of your report within 60 days. Simply ask the company that denied you credit for the name and contact information of the credit bureau they use. In addition, all three agencies must provide a free copy of your report in cases where you have been a victim of fraud or identity theft.

Due to recent changes to FACTA, you will be entitled to one free copy of your report from each agency per calendar year, effective in all states as of the end of 2005. (You can request this at http://www.annualcreditreport .com) For example If you request a report from Equifax in June 2005, you can request a free report in June 2006. Credit bureaus must also provide you with a list of everyone who has requested your report in the last year.

The FCRA requires all credit bureaus and information providers, such as lenders, credit card companies, or landlords, to correct any inaccuracies they become aware of in your report. If you find inaccurate or incomplete information on your credit report, notify all three bureaus by phone and follow up in writing by certified mail, return receipt requested, so you have documentation of all bureau requests and responses.

Also send a written correction request to the information provider. If the provider finds that the inaccuracy is proven, it must notify all national credit bureaus of the correction. If the dispute results in a change, the credit bureau must provide you with the results in writing and a free copy of your adjusted report.

Privacy is a serious issue when it comes to your personal information, and the FCRA includes provisions to protect the privacy of your credit report. Your employer or a potential employer can only get access to your credit history with your consent. An employer, insurer or creditor cannot access a report containing your medical information without your approval. Under the FCRA, only people with a legitimate business need, such as a credit application or rental agreement, can obtain a copy of your credit report.

FACTA has allowed consumers to place a fraud alert on their credit report with a phone call to the credit bureau. In cases where you suspect you are a victim of identity theft, or have simply lost your identifying information, you can prevent would-be thieves from accessing your credit.

You can also get records from businesses where a thief has used your personal information without your consent, as long as you have a copy of the police report detailing your identity theft. These records are invaluable in the process of clearing your name after such a crime.

Also new to FACTA is the requirement that mortgage lenders and credit bureaus provide consumers with their credit scores upon request. In addition, if an information provider is submitting negative information to a national credit bureau for inclusion in your credit report, they must now notify you in writing before doing so.

These laws, the FCRA and its more recent counterpart, the FACTA, have made significant strides in protecting the consumer from potentially harmful errors and privacy violations.