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Most people recognize how important credit scores and credit reports are because they affect significant parts of people’s lives. Such aspects of their lives include attempts to get jobs or places to live. Unfortunately, few understand the Fair Credit Reporting Act (FCRA) and how it can help them. Here, we will explain how the FCRA can benefit consumers.
The FCRA was passed in 1970 and has accrued several amendments since. The act helps protect consumers by regulating how credit reporting agencies (CRAs) obtain and share their information. In addition, the FCRA determines what these agencies must do to protect the information.
The FCRA can Help You to Improve Your Credit Score
Getting turned down for a credit card or a loan often feels frustrating, especially when unsure why. Some reasons for the denial include late payments or high balances on current credit cards. Whatever the reason, the FCRA requires the creditor to provide you with a notice explaining the denied application. This notice can help you improve your credit by advising you on how to improve your credit. Such advice includes making payments on time, paying your debts, or something else.
The FCRA Allows You to Obtain a Free Credit Report
It is crucial to check your credit periodically. This vigilance allows you to see what lenders will see when they obtain your credit. In addition, you can ensure you do not fall victim to identity theft. Checking your credit report will let you see any accounts listed in your name, which may reveal any fraud.
If you find unexpected accounts, quickly dealing with them will limit the damages caused by the fraud. One way the FCRA helps in identity theft is by allowing people to freeze their credit. This option will prevent identity thieves from opening new accounts in your name. Fortunately, you can check your credit for free because the FCRA requires all three major credit reporting agencies to provide a free credit report once a year upon request.
The FCRA requires CRAs to Remove Errors from Your Credit Report
When you obtain your credit report, it is vital to check it thoroughly for errors. Errors in credit reports are sadly common and can damage your credit. If you find an error, you have a right to dispute the error with the CRA from which you obtained the report. The CRA must investigate the dispute. If the information is incorrect, the CRA must remove it.
Final Thoughts
The FCRA does a lot to help consumers protect their credit, and it can help even more if you are aware of its benefits. So, take the time to learn more about what the FCRA can do for you. You may increase your credit score by learning more and applying their advice.
Background checks don’t have to be complicated. Try running a Self Background Check today and give yourself a head start.
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