Credit for Homeowners - Fair Credit Reporting Act

The Fair Credit Reporting Act, or FCRA, was passed into law by Congress to make sure that the information on your credit report is authentic. This Act gives you, as the consumer, many rights that you may not be aware of. This is key as a homeowner or as a potential home buyer because your credit report will establish whether or not you qualify for a loan. If you are eligible, the information on your credit report will serve as the basis for what interest rate the mortgage lender offers you. If there are mistakes on your credit report, you could be denied for a loan or offered a higher interest rate than you should receive. Mistakes on your credit report can be costly.

Mistakes on Your Credit Report Are Often Overlooked Until You Buy a Home

A mistake can linger on your credit report for years and may go by unnoticed until you try to make a major purchase like a home. Some mistakes are caused by the sheer volume of paperwork that the three credit reporting agencies deal with each and every month, while other errors are typos or other clerical errors. There could be a mistake with your social security number, your loan application or even a variation of your name that can create havoc on your credit report.

Homeowners Must Take the Initiative Regarding their Credit Report

When you discover that there is a mistake on your credit, or if you suspect that there might be a mistake, it is important to employ the rights that FCRA gives you as a consumer. First of all, a lender must let you know if you have been denied credit due to your credit report. Next, you have the right to know what is on your credit report whenever you what to see it. You also have the right to dispute information that is incorrect on your credit report. According to the law, any information that is not correct on your credit report must be changed immediately. You credit report can not have outdated information, and you also have the right to dispute wrong information with the original creditor. Lenders and other financial institutions must obtain your permission before they can access your credit report.

It is essential to realize that credit reporting agencies report and are not accountable for whether the information on your report is right or wrong. That responsibility remains on the consumer's shoulders. When you begin a dispute with one of the agencies, keep careful records and always make sure you have a copy of the evidence that you submit to them to dispute the item. Also, check all three agencies for inaccurate information and start a dispute with all three agencies for each item that is incorrect.

Persistence is the Secret to Protecting Your Credit

Unfortunately, it is very true that if you do discover a mistake on your report you may have to dispute it several times before it is removed from your credit report. During this time, it is very important that you keep detailed records of the dispute and be sure to keep copies of any evidence you use to support your claim. Also, consider making the dispute with all three national credit agencies at once, since a mistake on one agency's report that is corrected will not be fixed on the other reports unless you make the dispute with those agencies also. Learn the details about how long information can stay on your credit report and you will gain the reward of an improved credit score.