The Complete Guide to Your Free Credit Report: Knowing Your Rights

The Fair Credit Reporting Act, otherwise known as FCRA, is a government agency that is designed to protect consumers by monitoring the accuracy and fairness of practices involving credit bureaus, medical record access, rental history data and other data collection companies. They also work to protect consumer privacy and reduce fraud.

How Credit Agencies Work

Credit Agencies gather consumer information from companies and then sell this information to other companies who want to make application decisions on potential clients or consumers. It is important to note that credit bureaus and credit scoring companies are For Profit agencies, not government agencies.

Originally credit reports were used by creditors who were looking to approve loan applications. Today rental agencies use them for apartment application approvals, utilities and companies like cell phone providers use them to determine down payment requirements. Car insurance companies use them to establish rate plans and employers use them as a parameter in the hiring process. As credit reports and credit scores become more vital, it becomes imperative for consumers to know what’s in their report and what to do in the event of errors.

Who Has Access to a Free Report

  • All consumers can get a free report from each of the three credit bureaus once every 12 months. These include Equifax, Trans Union, and Experian.
  • Adverse Action. If you have been turned down for credit you can get a free copy from the agency the approving company used, within 60 days of the written notice of the decline.
  • Consumers who experience fraud or identity theft.
  • Consumers who receive public assistance.
  • Unemployed persons who will be looking for employment in the next 60 days.

If a company site is hacked or your credit information is compromised, you generally will have access to a free report along with a free year of credit monitoring. You must take action to receive this benefit as it is not automatic. This is not a right granted by the FCRA, but a common industry practice.

Rights Offered by The FCRA

  • Right to be notified if you have been denied credit or received less than favorable terms due to your credit report. The company making the decision must send you a letter and identify the agency that provided the information for their decision. You can then use this letter and get a free report to review its accuracy. This is considered an adverse action.
  • Right to know what information is in your file, and thus giving you free access to your report once per year.
  • Right to request your credit score (though they have the right to charge you for the score.) Also be aware that the score they provide may not be the exact score that was used in the credit decision. To learn more about credit scores visit
  • Right to dispute inaccurate or incomplete information. The reporting company must generally correct inaccuracies within 30 days of a dispute.
  • Agencies may not report negative information that is outdated. This translates to 7 years for late payments and other negative information. Inquiries remain for 2 years and bankruptcies for 10.
  • Companies must have a valid reason to access your credit file. This often means you signing a consent form giving them permission to receive a copy of your credit file.
  • Right to opt-out of prescreened offers. You can do this on a company by company basis or for all companies. Each company listed on the soft hits section of the report will have a number you can call to opt out. You can also call 888-5 OPTOUT (888-567-8688) for an overall opt-out.
  • Right to sue for damages if inaccurate information is not corrected.

Dispute Process

With approximately 80% of credit reports containing errors, understanding the dispute process and your rights, will help ensure that your credit file is an accurate depiction of how you pay your bills and manage your debt and credit.

Online access to credit also offers an online dispute process. You can click on the dispute button, put in your comments about what is inaccurate and start the process right there. This makes it easy to dispute items but there are a couple additional steps you should take to receive the best results.

  • Contact the credit bureau about the inaccurate information. As mentioned, this can be done online. However, any supporting documentation should be mailed to the agency so they will have accurate information to make a decision in your favor. Just saying or noting the information is wrong will often result in the data being left unchanged.
  • Contact the creditor and dispute the information with them. Do this in writing and include all supporting documentation you have. If the information on your credit file is found to be incorrect, it is illegal for the organization to continue to report the negative information on your credit file.

Credit bureaus and creditors are under increased pressure to report consumer information more accurately. Several lawsuits have been filed enforcing the rights given to consumers through the FCRA. See for more details.

Once a dispute has been filed, the credit agency has 30 days to investigate your dispute of inaccurate or incomplete information. The reporting organization must now re-verify the information, show evidence that it is accurate or provide complete inaccurate information. Failure to do so will result in the information being removed from your report.

Common examples of inaccurate or incomplete information may include: a foreclosure that was completed but still shows as an open account in process. Accounts that have been sold may be reported twice by both the original and new company. Collection agencies and the original lender may create duplicate reporting of the same debt. Collections that have been paid off or settled and not updated.

Upon completion of the investigation you will be notified in writing of the results and receive a new copy of your credit file. If you are still not satisfied or a company refuses to correct inaccurate information you may place comments on the file noting your dispute and provide a statement.

At this point you also have the right to file a complaint with the Federal Trade Commission (FTC). They have the duty of enforcing the laws regarding consumer protections including those involving the rights in the FCRA. A dispute with the FTC can be filed online at

Understanding your rights, and keeping track paperwork can be the difference of correcting an inaccurate file, or having to wait for seven years until the negative information ages off the report. Computers and online access have made it easier to access and dispute inaccuracies on your credit report. Take advantage of these rights to ensure you have the best credit file possible.

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