To summarize your credit reporting rights, you have the right to:

	Obtain a copy of your credit report. Depending on where you live, you may receive a free copy of your report once a year, staring in December, 2004.
	Know who has received a copy of your report.
	Dispute inaccurate information.
	Even if negative information is included, to explain the circumstances.
	"Opt-out" to prevent credit bureaus from using your information for marketing.
	Complain to the appropriate government agency or file a lawsuit.

2. Credit Reporting Basics: What’s in a Credit Report?
What Is a Credit Score?

What is in my credit report?

Your credit report is actually a credit history. It is created by data about you from many different sources. Companies that have granted you credit make regular reports about your accounts to the three main CRAs: Equifax, Experian (formerly TRW), and TransUnion. If you are late in making payments, those to whom you owe money such as utilities, hospitals, landlords and others may report this information to the CRA. Your bank may inform the CRA if you overdraw your account or do not make credit card, auto loans, or mortgage payments on time. Your credit report may also contain information about delinquent child support payments.

The FCRA allows CRAs to report records of convictions of crime. However, it is not the practice of any of the three main CRAs to report criminal convictions on credit reports. Such information may, however, be reported in connection with an employer background check, an application for automobile insurance, or an application to rent a house or apartment. For more on these types of consumer reports, see www.privacyrights.org/fs/fs16-bck.htm (employment background checks) and www.privacyrights.org/fs/fs26-CLUE.htm (insurance reports).

In addition, your credit report contains your name and any name variations, your address, and previous addresses, telephone number (including unlisted number), Social Security number, year and month of birth, and employment information. Information in your report also includes matters of public record such as civil judgments, tax liens and bankruptcies. Because you have the right to know who has inquired about your credit file or has requested your report over the last six months, any copy of the report you receive must also include the identity of all such inquiries. Inquiries related to pre-approved offers, as well as your own inquiries, are not available to credit grantors. However, they are included in credit reports that you order for yourself.

How do credit scores affect my application? Can a credit reporting agency deny my application for credit?

CRAs do not make decisions regarding a consumer’s creditworthiness. Rather, the CRA compiles reports of what your file contains and passes that along to the potential credit grantor. Credit decisions are, in fact, generally made based upon a number of factors that comprise a "score." Inquiries made in connection with your applications for credit may also be a factor in your score. If, for example, you have applied for several credit cards or loans in a short period of time, this may result in a lower score. Inquires made in connection with pre-approved credit offers or those you make yourself should not result in a reduced score.

The practice of credit scoring is widespread and growing. Until recently, consumers have seldom gained access to their credit score and have not been able to learn the factors that went into the scoring. But a recent law in California gives mortgage applicants a right to see their credit score (California Civil Code 1785.10, 1785.15-1780.20, SB 1607 in the 2000 legislative session). And the credit industry is voluntarily loosening its grip on the credit score because of legislative and marketplace pressures.

To learn more about the topic of credit scoring, see the Federal Trade Commission’s (FTC) information at www.ftc.gov/bcp/conline/pubs/credit/scoring.htm. Additional information can be found at the Fair, Isaac and Co. (FICO) web site (www.fairisaac.com). FICO is the leading developer of scoring methodology. The credit score is often called a "FICO." The most recent changes to the FCRA give you new rights to know your credit score as well as an explanation of the factors that determined the score.

Is there anything that cannot be in my credit report? How long can information be reported?

Certain pieces of personal information cannot be in your credit report:

	Medical information (unless you give your consent).
	Notice of bankruptcy (Chapter 11) that is more than 10 years old.
	Debts (including delinquent child support payments) that are more than seven years old.
	For California residents, records of arrest, information, or misdemeanor complaints must be removed after seven years. But under federal law, records of criminal convictions may remain on a credit report indefinitely.
	Age, marital status, or race (if the request is from a current or prospective employer).

Certain kinds of information may remain on your report indefinitely. If, for example, you are applying for credit, insurance or employment above the dollar limits noted below, information can be reported beyond the usual seven- to 10-year deadlines.

	A credit transaction involving, or which may be expected to involve, an amount of $150,000 or more.
	Information about a job with a salary of more than $75,000.
	An application for credit or life insurance for more than $150,000.
	Tax liens that are not paid.

For additional information on the length of time that negative information can remain on your credit report, read the "Ask Max" section of the Experian web site, www.experian.com/ask_max/deleting_information.html.

3. Accessing the Credit Report: Who Can See What?
How Can I Get a Copy?

Who has access to my report?

Anyone with a "legitimate business need" can gain access to your credit history, including:

	Those considering granting you credit.
	Landlords.
	Insurance companies.
	Employers and potential employers (but only with your consent).
	Companies with which you have a credit account for account monitoring purposes.
	Those considering your application for a government license or benefit if the agency is required to consider your financial status.
	A state or local child support enforcement agency.
	Any government agency (limited usually to your name, address, former addresses, current and former employers).

Generally, only an employer or prospective employer needs your written consent to obtain a report. An exception is Vermont where any user needs your oral or written consent. In practice, most potential creditors ask for your permission to review your report. Your permission is not required when inquiries are made in connection with a pre-approved credit offer.

Can I find out what is in my credit report?

Absolutely. Your right of access is mandated by federal and state laws. You may obtain a copy of your report by writing, calling the three CRAs, or ordering it online. Ordinarily, there is a charge of $8.00 - $9.00 in most states for your credit report. The charge is $8.00 if you live in California and free if you live in Colorado, Georgia, Maryland, Massachusetts, New Jersey or Vermont.

Free Credit Reports. Beginning in December 2004, consumers can get a free copy of their credit report annually. Free annual credit reports will be rolled out starting on the West Coast and ending in September 2005 on the East Coast. A centralized source with a toll-free number, web site, and mailing address will be established to order your free report in the near future.

Schedule for Phasing In Access to Free Credit Reports:

December 1, 2004: Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming.

March 1, 2005: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin.

June 1, 2005: Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, Oklahoma, South Carolina, Tennessee, and Texas.

September 1, 2005: Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, Vermont, Virginia, and West Virginia, Puerto Rico, and all U.S. territories.

There are certain times when you are entitled to a copy of your report free, no matter where you live. The new rule that gives you free access once a year does not affect your ability to get a free report in the circumstances listed below. You are entitled to a free credit report:

	If you have been denied credit (you must request a copy within 60 days).
	If you are unemployed and intend to apply for employment in the next 60 days.
	If you are on public welfare assistance.
	If you have reason to believe your file contains inaccurate information due to fraud or identity theft.
	If an adverse decision related to your employment has been made based in whole or in part on information contained in the report.
	If your report has been revised based upon an investigation you request.

To get a copy of your report you will have to give the CRA certain information. The information you need to provide may vary slightly, depending on the CRA you contact.

	Full name (and if a Jr., Sr., or II)
	Social Security number
	Driver’s license information
	Current address and your address within the last five years
	Date of birth
	Signature
	Home telephone number
	Employer

For a copy of your report write, call, or connect online with:

You may also obtain a copy of your credit report from companies who contract with the CRAs to sell their products. Many of these products are available on the Internet. Some companies sell a merged version of all three reports. They also provide credit monitoring services that alert you to activity on your report, such as any new credit accounts, the placement of negative information, inquiries from creditors, and so on.

To find such companies, use an Internet search engine and look for "credit reports" and "credit monitoring." Be careful to examine these companies and their offers carefully. You will be asked to disclose sensitive personal information in order to obtain your report. Do your homework before signing on the dotted line. And do not fall for the promises of "credit repair services" and "credit doctors" who advertise on television and on the Internet. The vast majority of such services are ineffective, even illegal. Additional information on credit repair services is provided below.

4. Dealing with Negative Information and Errors

How will I know if there is negative information in my report?

The best way to determine if you have negative information in your credit report is to order a copy and check it carefully. For a thorough review, you should check with all three CRAs since there may be some variations in the file each CRA maintains on you. This should be done at least once a year. Because the crime of identity theft is on the rise, we recommend that you check at least one of your credit reports each six months. After the effective date for free credit reports under FACTA, you will be able to contact a centralized source that will include information from all three CRAs.You should also check your credit report when you know it is going to be used to make important decisions, such as applying for an automobile or home loan, renting an apartment, or applying for a job. Reports should be ordered at least one to two months before you apply for credit or intend to rent. At these crucial times, you do not want to be surprised to find that your report contains negative information, especially if that information is inaccurate.

A creditor has the duty to report only accurate, complete, and updated information to a CRA. For example, if you close an account voluntarily, your creditor must report this fact in order to distinguish it from an account that is closed for nonpayment. If you disagree with a creditor's report of negative information, the creditor must put a notice of that dispute in your file before reporting to the CRA.

What can I do if there are errors in my report?

There is no denying that errors can and do appear in credit reports. The July 2000 issue of Consumer Reports cited a study where more than 50% of the credit reports checked contained errors. A more recent survey conducted by the US Public Interest Research Group found that one in four credit reports contain serious errors. http://uspirg.org/uspirgnewsroom.asp?id2=13650&id3=USPIRGnewsroom& There are two main reasons errors may appear on your credit report. One is when you have been mistaken for another person with a similar name and their information ends up in your file. The other more serious cause of error is fraud. Someone may have intentionally gained access to your personal information and obtained credit in your name. Instances of identity theft are increasing.

See PRC Fact Sheet No. 17, "Coping with Identity Theft" www.privacyrights.org/FS/fs17-it.htm and Fact Sheet 17a, "Identity Theft: What to Do if It Happens to You" www.privacyrights.org/FS/fs17a.htm.

A survey conducted by the Federal Trade Commission in September 2003 found that nearly 10 million people were victims of identity theft in 2002 alone. For more on the FTC’s and other recent surveys, see www.privacyrights.org/ar/idtheftsurveys.htm.

Both state and federal laws provide you with the right to have errors corrected. Credit bureaus are regulated under the California Consumer Credit Reporting Agencies Act (California Civil Code section 1785 et seq.), the laws of other states, and the federal Fair Credit Reporting Act (15 USC 1681 et seq.). For information on the law in your state, contact your state’s consumer protection bureau or office of the Attorney General. National credit bureaus must have a toll-free number so you can contact them with your questions. Also, credit reports must provide an address to request an investigation of inaccurate information.

Once you have notified a CRA of your dispute, both federal and California law allow 30 business days for an investigation. The bureau must consider all the relevant evidence you give it, and errors must be corrected. If the CRA cannot verify negative information, it must be deleted from your file. You are entitled to receive a free copy of your corrected report. You may ask the credit bureau to send a corrected report to anyone who has requested your file in the past six months, as well as to anyone who has requested it in the last two years in relation to employment. Remember, when corresponding with the CRAs, be sure to make copies of all letters, and mail them certified return receipt requested. If you disagree with the result of the CRA’s investigation, you have the right to submit a 100-word explanation. The credit bureau must include the explanation in your file although the negative information will not be removed.Some consumers who have had errors corrected find the incorrect information reappears in their files at a later date. Both federal and California laws require credit bureaus to notify the consumer within five days of reinserting information. Negative information cannot be reinserted into your file unless the credit bureau takes the added step of having the source of the information certify that it is complete and accurate. Credit bureaus must provide the subject of the report with a toll-free number to dispute the reinsertion and the opportunity to include a dispute statement. However, even if you have had errors in your report corrected, it is wise to periodically check your credit report to make sure the errors do not reappear.

The recent FACTA amendments to the FCRA also place new obligations to investigate errors on companies that furnish information to a CRA.

Can I have negative information deleted if the entry is not an error?

After seven years, negative information in your report should automatically be deleted. Under federal as well as California law, the seven years begins 180 days from the date of the original delinquency. A Chapter 7 bankruptcy should be deleted after 10 years from the filing date. A Chapter 13 bankruptcy, which includes some debt repayment terms, remains on your credit report for seven years. Otherwise, negative information will remain in your file for the period allowed by law. However, you may include in your 100-word explanation any extraordinary circumstances that led to the negative information, such the loss of a job or illness. Companies or individuals promising quick fixes are almost always fraudulent. The important thing to remember is that no one can have accurate information removed from the credit file. The law offers some small protection to consumers who deal with so-called "credit doctors" or "credit repair clinics." Such companies are prohibited from charging a fee before completing a promised service.

A better alternative for help with re-establishing good credit is to contact a member agency of the National Foundation for Consumer Credit, such as the Consumer Credit Counseling Service. These nonprofit groups have offices in most cities. To find the office nearest you, call or write:

Beware of other credit repair services. Generally they promise a lot, charge a lot and, deliver little. For more information about credit repair services see www.ftc.gov/bcp/menu-credit.htm

5. Uses of Credit Reports for Marketing: What Is and Is Not Allowed?

Can the information in my credit file be used for any other purposes?

Yes. The practice of generating and selling lists for use in "pre-approved" credit and insurance offers is allowed by law. TransUnion, Experian and Equifax all engage in selling lists of consumers who meet certain criteria in order to receive a "firm" offer of credit or insurance. This is the source of the many pre-approved credit offers most consumers receive in the mail. "Pre-approved" and so-called "firm" offers of credit, however, can be somewhat misleading. A creditor may legally look at your report before making the offer. If you respond, the creditor may again access your report before you are actually granted credit. They can deny your credit application at that time. This is explained in the fine print on the pre-approved offer.

The law does not allow CRAs to compile and sell information from credit reports for the purpose of direct marketing. Although CRAs have engaged in this practice in the past, the Federal Trade Commission in March 2000 ruled that TransUnion violated the FCRA by the sale of personal credit information for target marketing purposes. To read the FTC’s full opinion, see www.ftc.gov/opa/2000/03/transunion.htm.

TransUnion has appealed the FTC’s decision and the matter is now under review in federal court. Equifax states it does not sell lists used for direct or target marketing. Experian, on the other hand, sells lists of consumers to marketers derived from consumer surveys, demographics sources, and public records. Experian states that it does not sell information obtained directly from credit reports for marketing purposes. See www.experian.com/direct_marketing/manage_data/customer_information.html.

You can remove your name from any list compiled by a CRA, whether the list is for pre-approved credit offers or direct marketing. To "opt-out," that is, to remove your name from mailing lists compiled by credit bureaus, call the toll-free number all CRAs are required by law to maintain for this purpose:

Call (888) 5-OPTOUT or (888) 567-8688 to opt out of pre-approved offers of credit.

This phone number can be used to remove your name from the list of all three CRAs. You may also write to the CRA.

The 1997 amendments to the FCRA allow a subsidiary of a bank holding company to share its customers’ credit reports and information from credit, employment, or insurance applications with other affiliates of that company. The 1997 amendments to the FCRA give you a right to opt-out of the sharing of affiliate information. Look for opt-out instructions in the fine print of your credit card bills and bank statements. You will be provided with an address to contact to alert financial services companies of your opt-out preferences.

The FCRA amendments require that if an adverse action is taken based on affiliate-shared information, you are to be notified. The consumer organization U.S. PIRG (www.pirg.org) has warned that the sharing of customer information among affiliates in effect establishes subsidiaries that act like credit bureaus but are exempt from the act.

At one time, a loophole in the FCRA enabled the credit bureaus to sell the "directory information" from credit reports, called "credit headers." This information included name, address, previous addresses, telephone number, date of birth, and Social Security number. The FCRA’s opt-out provision that applies to pre-approved offers of credit did not apply to credit headers. You were not able to opt-out of the sale of your credit header information by the CRAs. This information was sold to many information brokers who in turn sold it for a variety of investigative purposes.

The sale of credit headers has been highly controversial. Several bills have been introduced in Congress to prohibit the sale of headers, or at the very least to restrict the sale of Social Security numbers, which are contained in credit headers. The practice of selling credit headers was stopped in 2002, when a federal appeals court ruled that such sales violated another federal law, the Gramm-Leach-Bliley Act, which provides privacy protections for consumers’ personal financial information. www.ftc.gov/opa/2002/07/tuglbappeal.htm

6. Enforcing Your Rights: Filing Suit and Complaining
to Government Agencies

What can I do if my rights under the FCRA have been violated? Where can I complain?

You may sue a CRA or a company that provides data to a CRA in federal or state court. If you win, you may be entitled to recover an amount for damages you have actually incurred or a maximum of $1,000, whichever is greater. You may also recover court costs and attorney fees. In addition to filing your own lawsuit, you may complain to the FTC or your state Attorney General’s Office. Although government agencies do not represent individual citizens, agencies charged with enforcing laws such as the FCRA do investigate reported violations. In most cases, an agency’s primary source of information is complaints from the public.

While the FCRA is generally enforced on the federal level by the FTC, compliance by those who use or furnish information to a CRA may be enforced by other federal agencies such as the Federal Deposit Insurance Corporation and the Comptroller of the Currency. Complaints of violations of the FCRA may also be filed with those agencies. Other federal agencies with authority to enforce the FCRA can be found at the end of this fact sheet.

7. Investigative Consumer Reports: Employment, Insurance,
and Rental Housing

How does an investigative consumer report differ from a credit report?

Some credit reporting agencies and investigation companies compile what is known as "investigative consumer reports." Such reports are defined under the FCRA as a "consumer report or portion thereof in which information on a consumer’s character, general reputation, personal characteristics, or mode of living is obtained through personal interviews with neighbors, friends, or associates…". An investigative consumer report is normally used in limited circumstances including employment background checks, insurance, and rental housing decisions. An investigative consumer report does not contain information about your credit record that is obtained directly from a creditor or from you. For example, an investigative consumer report should not contain information about a late payment. This type of report cannot be used to grant credit. Because the information in these reports is so detailed and may be sensitive, FCRA imposes stricter regulations on CRAs that compile investigative reports (federal FCRA, 15 USC 1681d sections 604, 606, and 614).

California’s law that governs background checks is somewhat different from the federal FCRA. For more information, see www.privacyrights.org/fs/fs16a-califbck.htm. California has a separate law (CA Civil Code §1785 et seq.) that governs credit checks.

Federal law requires the requester of an investigative consumer report for employment purposes to obtain permission to conduct the report. An exception would be, for example, if an employee were being investigated for possible criminal activity. If the information obtained in the report is used by the employer to make a negative hiring decision, the employer must give the applicant a copy of the report. You have the same rights to correct and dispute inaccurate information in an investigative report as you have in a credit report.

If you want more information on investigative consumer reports used for employment purposes, see www.ftc.gov/bcp/conline/pubs/buspubs/credempl.htm. See also PRC Fact Sheet 16, "Employment Background Checks: A Jobseeker’s Guide," www.privacyrights.org/FS/fs16bck.htm.

8. For More Information

General information:

Federal Trade Commission. The federal government agency that oversees the credit reporting agencies is the Federal Trade Commission (FTC). It has developed several informative brochures on credit-related topics. If you have a complaint about a credit bureau, you may report to the FTC online, by mail, or by calling the toll-free number.

Consumer Action. The San Francisco-based nonprofit organization Consumer Action provides numerous brochures in several languages on credit-related topics. This organization also maintains a hotline and provides advice and referrals on a variety of consumer problems.

Credit bureaus. The three credit bureaus are also a source of information. See their addresses and websites above. See also their trade organization, the Consumer Data Industry Association, www.cdiaonline.org.

Surveys and reports

	A Consumer Federation of America (CFA) survey released July 2003 shows consumers lack essential knowledge of credit reporting and credit scores, www.consumerfed.org/072803creditscores.html.
	A more recent survey by US PIRG found a high degree of inaccuracies in credit reports. http://uspirg.org/uspirgnewsroom.asp?id2=13650&id3=USPIRGnewsroom&
	Another report released by the U.S. Federal Reserve in 2003 closely examines the credit reporting industry and the content of credit reports. www.federalreserve.gov/pubs/bulletin/2003/0203lead.pdf
	Read the book, Credit Scores & Credit Reports: How the System Really Works, What You Can Do, by Evan Hendricks, Privacy Times, 2004, www.creditscoresandcreditreports.com.

Credit reporting laws:

	Federal law -- Fair Credit Reporting Act: 15 USC 1681 et seq. For the full text of the FCRA, see www.ftc.gov/bcp/conline/edcams/fcra/index.html
	California Consumer Credit Reporting Agencies Act: California Civil Code section 1785 et seq. See www.leginfo.ca.gov/calaw.html
	California Investigative Consumer Reporting Agencies Act: California Civil Code section 1786 et seq. See www.leginfo.ca.gov/calaw.html

Government agencies:

	Federal Trade Commission, see above
	U. S. Comptroller of the Currency, (800) 613-6743, www.occ.treas.gov
	Federal Deposit Insurance Corporation, (202) 393-8400, www.fdic.gov
	Federal Reserve Board, (202) 452-3693, www.federalreserve.gov/pubs/complaints
	California Department of Consumer Affairs, (800) 344-9940, www.dca.ca.gov

Consumer organizations:

	U.S. Public Interest Research Group (USPIRG), www.pirg.org/consumer/credit/index.htm
	California Public Interest Research Group (CALPIRG), www.calpirg.org
	Consumers’ Union, www.consumersunion.org
	Consumer Action, www.consumer-action.org (and see above)

The Privacy Rights Clearinghouse developed this guide with funding from
the Rose Foundation Consumer Privacy Rights Fund.

Copyright 2004 UCAN. Reproduced from http://www.privacyrights.org/fs/fs6-crdt.htm. Home