Home Buyers Can Take Advantage of Applying Their Credit Rights

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 cognizant of. This is key as a homeowner or as a potential home buyer because your credit report will determine 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 rejected for a loan or offered a higher interest rate than you should receive. Mistakes on your credit report can be expensive.

Mistakes on Your Credit Report Often Go Unnoticed Until You Buy a Home

A mistake can remain on your credit report for years and may go by unobserved 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 sort through each and every month, while other errors are typos or other clerical errors. There may perhaps be a mistake with your social security number, your loan application or even a variation of your name that can ruin on your credit report.

Learn How to Handle a Mistake on Your Credit Report

The number of mistakes on credit reports led to the formation of FCRA, but unfortunately many home owners do not understand how to tackle the mistakes that are on their reports. Once you discover an error, it is important to be educated about what the next steps in correcting your credit are.

These are the rights that FCRA gives you:

- If you are denied a loan, that financial institution has to tell you if you are denied because of your credit report.
- You have the right to know at any given time what the contents of your credit report are.
- You have the right to dispute misinformation on your credit report with the credit reporting agencies.
- Information on your credit report that is incorrect must be taken off or corrected.
- You have the right to dispute wrong information with the source.
- Your credit report can not have old information.
- Lenders and other institutions must have your permission to access your credit report.

Be aware that the credit reporting companies are not liable for mistakes made on your credit report, they simply pass on the information that others have provided. It is up to you to keep track of the information on your reports and to challenge any inaccuracies. The companies are then required to investigate all disputes made by you. Incredibly, many consumers are not conscious of what is on their reports. They do not monitor it regularly, and are thus unable to ensure that they are dealt with fairly under FCRA. Remember, you have rights, but you must use them!

Do Not Quit on Getting Corrections Made to Your Credit Report

Many consumers do not regularly monitor their credit reports, or if they do, they do not set aside the time and effort to correct mistakes on their reports. You must acknowledge that you may have to dispute a mistake more than once. However, if you persist with the agencies and make your disputes, it will really pay off in the end when your credit score improves.