We think it's important for you to understand how we make money. It's pretty simple, actually. The offers for financial products you see on our platform come from companies who pay us. The money we make helps us give you access to free credit scores and reports and helps us create our other great tools and educational materials.
Compensation may factor into how and where products appear on our platform (and in what order). But since we generally make money when you find an offer you like and get, we try to show you offers we think are a good match for you. That's why we provide features like your Approval Odds and savings estimates.
Of course, the offers on our platform don't represent all financial products out there, but our goal is to show you as many great options as we can.
The FCRA helps ensure you get fair treatment when it comes to credit.
This law gives you the right to access your own credit information, controls who else has access to it, and says you can dispute inaccurate or outdated information.
Passed in 1970 and updated a few times since, the FCRA took big steps to ensure every American can view their credit reports and dispute inaccurate information. While the legislation behind the FCRA is complicated for lenders, the benefits to consumers are quite clear.
Why the FCRA is important
Before the Fair Credit Reporting Act, the big credit reporting agencies — Equifax, Experian and TransUnion — had all of the leverage when it came to credit reports and credit scores. When this new law went into effect, consumers gained new rights and abilities related to their credit.
In the old days before the FCRA, you might not have been able to get a copy of your credit reports at all, meaning banks and other lenders could make decisions using information you didn’t know about.
The most important protections in the FCRA
The FCRA does more than just give you access to your credit reports and the right to dispute incorrect information. Here are some other important protections you get from the FCRA.
- Notice when credit information is used against you. Under the FCRA, lenders and employers must tell you if information from your credit file was used to deny you a loan or a job.
- Access to your credit file. You can get your Equifax and TransUnion credit reports for free any time at Credit Karma, but the all three major credit bureaus are required by law to give you an additional copy at your request at least once every 12 months.
- Access to a credit score (for a fee). At Credit Karma, you can get your VantageScore® 3.0 credit scores from TransUnion and Equifax for free! But under the FCRA, the three major bureaus have to give you access to your scores as well (though you may have to pay for them).
- Right to dispute incomplete or inaccurate information. If you are looking at your credit reports and spot something inaccurate, your first response is probably going to be anger. Once you calm down, you can file a dispute with the reporting agency that issued the report. In most cases, they have to correct the inaccuracy within 30 days.
- Right to remove old negative information. If you make a late payment or file bankruptcy, it shouldn’t be held against you forever. The FCRA requires agencies to remove most negative credit information after seven years and bankruptcies after seven to 10 years, depending on the kind of bankruptcy.
- Restrictions around who can access your reports. While you may want to pull up a credit report on your next online date before meeting for a coffee, that would be against the law without your date’s consent. Only those with a valid need, such as banks, nonbank lenders, landlords, employers and others with a legitimate business need can access your credit reports. But even in those situations — in the case of an employer, for example — you have to give permission first. This also helps prevent identity theft.
The FCRA doesn’t stop there, but those are some of the most important and most valuable aspects of this important law. Another rule allows you to opt out of prescreened offers based on your credit (bye-bye, junk mail!). The FCRA also provides additional rights and protections to identity theft victims and active military.
Know your rights to protect your finances
If you do find yourself a victim of identity theft or notice something amiss on your credit reports, you have the right to respond. By understanding the basics of the FCRA, you know where to turn if something does go wrong with your credit.
Filing a dispute
A 2012 Federal Trade Commission study found that 5% of consumers had credit report errors on one of their three major credit reports that could lead to paying more for financial products like loans or insurance. One in four consumers in the study found at least one error on their credit reports that could affect their credit scores.
To file a dispute, head to the website of the reporting agency that houses the erroneous data. You can file a report online at the agency website or get more information to file a dispute through other means. For TransUnion, head over to Credit Karma’s Direct Dispute™ tool and we’ll help you through the process.
Swat down identity thieves
Identity theft can quickly ruin your credit, so it’s important to monitor your credit for new information and look out for anything you didn’t do yourself. If you are a victim of identity theft or suspect you may become a victim, the FCRA provides a right to security freezes so that your credit reports can’t be accessed. You may also want to look into a credit file locks, which are usually a feature of products offered by the three major consumer credit bureaus (as opposed to guaranteed by law). Credit file locks and credit file freezes put a major hurdle in front of anyone trying to open an account in your name.
The Fair Credit Reporting Act has improved credit reporting and given consumers rights and resources to dispute inaccurate information. Take advantage of those rights to make sure you get the best interest rates and financial products available for you. Promoting the privacy, fairness and accuracy of your credit information is what the FCRA is all about.