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Ever find faulty information on
your credit report? Or carry on a lengthy battle with a credit bureau while trying
to get inaccurate information corrected?
If so, the federal government
wants to hear from you. Even better, the feds want you to help them fix problems
with the credit reporting system.
Federal regulatory agencies and the Federal Trade
Commission are asking for comments from the public in an effort
to develop more accurate credit reports. They are looking for examples
of mistakes, corrected information ignored by the credit bureaus
and other problems that can hamper the accuracy and integrity of
your credit report.
Also, they want you to
offer your ideas to improve procedures and policies.
But don't wait. Public comments must be submitted
no later than May 22. The comments will be reviewed and analyzed
upon receipt. See the Bankrate story "Alert
feds of credit report errors" for information on providing
your comments.
"The
whole point is to help agencies to understand concerns and to draft a proposed
rule," says Peggy Twohig, associate director in the Division of Financial
Practices at the Federal Trade Commission. "The public will also have the
opportunity to comment on the proposed rule."
Guidelines and rules are needed to update Section
312 within the Fair and Accurate Credit Transactions Act of 2003,
or FACT Act. This act updates the Fair Credit Reporting Act. For
example, getting a free
annual credit report from each of the credit reporting agencies,
being able to obtain your credit score and putting a fraud alert
on your credit files are some of the new provisions provided by
the FACT Act.
Under Section 312, agencies must:
- Create guidelines to protect the accuracy and
integrity of information provided to consumer reporting agencies.
- Set rules for providers of the information to use,
to create policies and procedures to execute those guidelines.
- Establish standards that identify how providers
will be required to reinvestigate disputes dealing with the accuracy
of information in a consumer's credit report, based upon a consumer's
direct request.
Consumer reporting agencies, such as Experian, TransUnion
and Equifax, keep and maintain consumers' credit transactions. The
information collected can determine a person's ability to get credit,
employment, insurance, housing and other services. Providers of
a consumer's credit transactions or furnishers of the credit information
include banks, landlords, credit unions, debt collectors and insurance
companies. This information is provided voluntarily.
"Furnishers
don't get a direct benefit from reporting the information, especially good information,
but ultimately it helps the credit industry make better decisions because it helps
them measure risk and make better pricing decisions," says Nessa Feddis,
senior federal counsel to the American Bankers Association's Government Relations
Division.
The type of information that is reported varies. Some
furnishers might provide information to only one reporting agency,
or they may only provide negative information such as delinquent
payments and loan defaults. Studies show that variable reporting
can create a lower credit score, a tougher time getting credit and
a higher cost of credit.
"Until 1996, there was no legal liability for
those that furnished information to the credit bureaus," says
Twohig.
"At that time,
Congress added some liability for furnishers of information reported to credit
bureaus, but there were no rules or guidelines concerning the accuracy of information
when first reported. Congress also at that time added duties for furnishers when
they received a consumer dispute through a credit bureau, but furnishers did not
have any specific legal obligations when disputes about information they reported
came directly to them."
Federal officials say they are bringing Section 312
to the forefront after spending the past couple of years taking
on the task of developing and implementing nearly two dozen other
rules in the act that had specific deadlines.
If you would like to provide your comments, see the
Bankrate story "Alert
feds of credit report errors."
Bankrate wants to hear from you, too. So, please
tell
us about problems you have encountered with your credit reports,
including difficulty getting inaccurate information corrected.
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