9 Credit Rights You Should Know: A Guide to Consumer Protections
Understanding your consumer credit rights can help you build credit, qualify for the best financial offers, and save money for decades to come. Laura gives a quick guide to the Fair Credit Reporting Act (FCRA) by reviewing 9 credit rights you should know.
Building and maintaining great credit is a fundamental part of a healthy financial life. You probably know that having no or poor credit means that you typically can’t get approved for credit accounts. And you can even be charged more for certain products, such as insurance, utilities, and cell phones, when you have subpar credit.
But you may not be fully aware of your credit rights. Everything, from who can access your credit information to how to deal with errors on your credit reports, is included in the Fair Credit Reporting Act (FCRA).
In this post, I’ll summarize what you should know about this federal law with a quick guide. You’ll learn nine credit rights that can help you build credit, qualify for the best financial offers, and save money for decades to come.
9 Credit Rights You Should Know
- Access your credit reports for free.
- Request your credit scores.
- Restrictions on who can access your credit reports.
- Dispute information in your credit reports.
- Have inaccurate information removed or corrected.
- Exclude negative information after certain time limits.
- Consent for an employer to access your credit data.
- Notification about adverse credit actions.
- Opt out of prescreened product offers.
Here’s more detail about each of these consumer credit protections.
1. Access your credit reports for free.
An important, but often under-utilized, right you’re given by the FCRA is the ability to review your credit reports and know what’s being reported about you. The three nationwide agencies, Equifax, Experian, and TransUnion, must provide you with your credit report for free every 12 months, if you request it.
You can get it directly from the agencies or from the official credit reporting site, annualcreditreport.com. However, there are many places where you can get your credit reports for free as often as you like, including:
- Fintech companies, such as Credit Karma and Credit Sesame
- Financial institutions, such as LendingTree
- Credit card issuers, such as Discover
To get a report, you must verify your identity by providing your Social Security number, current or previous address, and answer random questions about your accounts, such as the range of your monthly payment or the year you took out a loan.
You’re also entitled to a free credit report if:
- You’ve been turned down for new credit or adversely affected due to data in your credit file
- You believe you’re the victim of identity theft
- You’re receiving public assistance
- You’re unemployed, but looking for employment
2. Request your credit scores.
When you view your credit reports, you’ll notice that they don’t include credit scores. There are many different scores used by lenders and merchants that evaluate you based on the information in your credit reports.
Each of the nationwide credit agencies sells at least one credit score, which uses a proprietary calculation method. You have the right to request your credit score from the major credit bureaus. However, unlike the free credit report rule, the credit agencies can and usually do charge you for scores.
Instead of being forced to pay for them, I recommend signing up at Credit Karma or Credit Sesame, where you can get both your credit reports and scores for free. They may offer one or two different types of scores, show how they’re trending over time, and offer guidance for improving your credit.
3. Restrictions on who can access your credit reports.
Credit bureaus must limit who can see your credit information. The only people or companies allowed to access your credit reports are those with “permissible purpose.” For instance, companies where you’ve applied for a loan, credit card, or to lease an apartment. Here are more examples of companies and organizations that the law deems as having a valid need to access your credit information:
- Existing creditors you have a relationship with
- Debt collection companies
- Insurance companies, to underwrite various types of insurance
- Employers or prospective employers (with your permission)
- Phone and utility companies
- Certain government agencies or in response to a court order or subpoena
You also have the right to know who has requested your credit report in the last year or, for employment-related requests, two years.
4. Dispute information in your credit reports.
If you believe your credit report contains inaccurate or incomplete information, you can file a dispute with the credit agency. By law, the agency has 30 days to complete an investigation and resolve your dispute.
Don’t tolerate any errors in your credit files. The sooner you get them corrected, the sooner your credit scores may improve.