The Fair and Accurate Credit Transaction Act
The Fair and Accurate Credit Transaction Act or FACT Act was passed to combat identity theft, protect your privacy, and improve your access to credit reports. The intention is to improve the overall accuracy of your credit information. The FACT Act is an amendment of the FCRA.
Free Credit Reports.
After September 1, 2005, you can receive a copy of your credit report for free from each of the 3 major reporting agencies (CRAs). The limit is once every 12 months. This allows you to monitor the number of accounts and outstanding balances, to discover and correct errors in your credit report. This helps you stop fradulent accounts opened in your name.
You can get 1, 2, or all reports at the same time. Or, you can request these reports throughout the year. Some financial advisors suggest you review at least one credit report every 4 months. This scheduled review helps you detect errors and monitor changes in your credit report.
Do not expect a report from one of the three main agencies to contain all the information from the other agencies. If you want a complete picture of your credit history, for a point in time, you must see the reports from all the agencies.
Fraud Alerts.
If you reasonably believe fraud or identity theft has happened, or are military personnel on active duty, you can place an alert on your credit files. This gives potential creditors notice that you must proceed with greater caution when granting credit.
Information to Handle Fraud.
The provisions for preventing the spread of incorrect credit information will help you recover your reputation after being a victim of identity theft.
- CRAs must stop reporting allegedly fradulent information once you establish that you have been a victim.
- Creditors or businesses must provide copies of business records of fradulent activities or transactions related to them.
- You are allowed to report accounts affected by identity theft directly to creditors (in addition to CRAs) to prevent the spread of incorrect credit information.
Credit Scores.
You have the right to get your credit score. The credit score is a numerical summary of your creditworthiness. It is based on information from the CRAs. You may request a credit score from CRAs that create or distribute scores used in mortgages, but you will have to pay for it. For some mortgages, you will get credit score information for free from the lender.