Exercise Your Credit Rights

Exercise Your Consumer Credit Rights

Have you been exercising…your credit rights?

Have you checked your credit report in the past year?

In a study reported by the National Foundation of Credit Counseling, 65% of adults haven't.

Your credit report is a long, data-rich document containing all of the information a lender would need to know to determine whether to extend credit to you. This information is what is used to calculate your credit score, a three-digit number that reflects your creditworthiness.

Your credit report and credit score can significantly influence a lending decision. If you plan to apply for a home loan, auto loan, credit card, or even a rental application for an apartment, you need to know what's going on in your credit life.

Here are the key rights as a consumer that you should know and exercise to protect your credit health:

1. Every consumer is entitled to a free copy of your credit report from each of the three credit bureaus—Equifax, Experian, and TransUnion—once a year. Why is this so important? Inaccuracies and outdated information can cost your credit score as much as 100 points. Make sure you know what's going on in your credit life and dispute any errors on your report.

Tip: Stagger your three free reports so that you receive one every four months each year. You'll need to look a bit harder if you want to find your free credit score online.

2. If a company denies your application for credit, a loan, or employment, you can get a free copy of your report. Contact the credit bureau that provided your report to the company within 60 days of receiving notice of the denial. Quick phrase/description mentioning that this is new/recent part of Dodd-Franks Act, or whichever legislation it came from

Tip: Do you know why you were denied? Use your free credit report to scan and be aware of derogatory marks and credit blemishes that may be compromising your financial opportunities. Additionally, keep monitoring your credit for free throughout the year on Credit Karma. You can't get a free credit score with your report from AnnualCreditReport.com, so use Credit Karma to watch your score for better credit health.

3. If you're unemployed you're entitled to receive a free credit report, as long as you're planning to look for a job within 60 days.

Tip: This is a perfect opportunity to check your report for potential inaccuracies that may affect your application for employment, so you can dispute and have them wiped from your record.

4. You have a right to know who requested a copy of your report in the past year, two years for requests related to employment. This is important because your report can only be viewed if the request was initiated or approved by you, and you should know who's peeking at your credit.

Tip: This consumer right helps you make sure any inquiries into your credit report were made on your behalf. Know if a credit check, such as one from a landlord or lender, will result in a hard inquiry, which will cost you points. Remember that too many hard credit inquiries can severely damage your credit score, so don’t apply for a lot of credit at once.

5. You have the right to dispute mistakes or outdated information on your credit report for free. Under the Fair Credit Reporting Act, both the credit bureau and the creditor must correct inaccurate or outdated information on your report; it'll lift your score to get rid of those credit report errors.

Tip: Start by contacting the credit bureau and the creditor for which you have an inaccuracy and dispute the error. For detailed instructions on how to dispute credit report errors, see the FTC's website.

6. You're entitled to add an explanation on your credit report if any credit dispute is not resolved. You'll have to make a special request to the credit reporting company if you want those who have received a copy of your report in the recent past to receive the explanation, and this sometimes incurs a fee.

Tip: This right is useful if a dispute was not settled to your satisfaction. Lenders or employers that see your credit report in the future may assess you differently if there is a detailed explanation as to why there is a certain derogatory mark on your credit report.

Bottom Line: These are just a handful of the rights you have when it comes to your credit. Fortunately, since the federal Fair Credit Reporting Act (FCRA) originally passed in 1970, your information as a consumer is protected. Take advantage of these rights put forth by the U.S. government so that you’re the one responsible for your credit.

Credit Karma™ is a completely free credit management service that provides free credit scores, personalized savings recommendations, and financial education. We believe free access to one's credit score is a fundamental consumer right. Credit Karma helps more than 2.6 million consumers realize the everyday cost savings of having a good credit score. Visit us at www.creditkarma.com.

Want My Free 31-Step Money Guide*?

Subscribe for free. Get my guide *31 Days to Improve Your Financial Life, welcome series, and regular Five Things digest. Join 30,000+ other followers.

Powered by ConvertKit


  1. Jenna, Adaptu Community Manager says:

    Love this tip: Tip: Stagger your three free reports so that you receive one every four months each year. Thanks for sharing!