CREDIT
Your Rights as a Debtor
Decision Center
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IN THIS ARTICLE
ven if you have a clean credit record, it doesn't necessarily mean that you'll get a credit card. However, once you use a credit card - even if you abuse it - you have certain rights as a debtor. Some of those rights were enhanced in 1997 by amendments to the Fair Credit Reporting Act. You should be aware of these debtor's rights.
Here are the most important ones:
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You have the right to find out what your credit report says about you. Lots of people look at your credit report. Certainly when you request a new credit card, the lender looks at your file. So does a mortgage lender, a prospective employer or an insurance company.
You probably already knew that. But did you know that a "notification service" might look at your file and then report to lenders that you're falling behind on some of your other bills? There are also "location services" that help creditors track down delinquent debtors by providing names of next-door neighbors. If all these people can look at your credit record, shouldn't you know what it says?
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You have a right to an accurate and complete report. If the report you receive is not correct, you have the right to ask the credit bureau to fix it. The new fair credit law puts some additional responsibilities on both creditors and credit bureaus. For instance, they must investigate reports of erroneous material on credit reports and, if an error is found, they must report the correction to all three credit-reporting bureaus.
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You have a right to give your side of the story. Suppose you say that some information in your file is incorrect, but the creditor disagrees and refuses to remove it from your file. You can ask to have a statement attached to your file giving your side of the story. You should write a concise statement to attach to the reporting agency's file, but that may not be helpful if a computer scores your file.
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You have the right to a fresh start. Negative information must be erased from your file after seven years; a bankruptcy is erased after 10 years.
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You have the right to know who has seen your file and, if adverse action has been taken, you have the right to know about it. The new law expands on this. In the past, it was often difficult to figure out who had seen your report because the credit bureau used abbreviations. But under the new law, the full name of the company that asked for your report must be given. The bureau must also provide you with an address if you request it.
If you're turned down for credit, a job or a promotion, or if your insurance rates are increased because of information in your credit report, you must be told that and furnished with the name and address of the bureau that made the report.
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You have the right to confidentiality. That seems a bit odd, doesn't it, when so many people have the right to look at your credit file? In fact, your credit file can be examined without your permission for credit, employment and insurance purposes, as well as other business purposes. That might include an investor who plans to invest in a pool of mortgages - including yours - who wants to see how you're doing.
However, there are specific instances when people are not permitted to look at your report. For example, credit reports can't be used by lawyers for litigation purposes. If you're divorced - or in the process of divorcing - your former spouse may not look at your report. Check your report and see who has seen it.
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You have the right to sue the credit bureau, although it could be expensive and difficult to win.
Under the new law, credit bureaus must also respond quickly to investigate any information that you contend is inaccurate. If the bureau finds an error, they must send the correction to other bureaus immediately through an automated system.
"Mistakes can still happen," says credit expert Gerri Deitweiler, author of The Ultimate Credit Handbook. "But the new law gives consumers a better chance to get them straightened out." 
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Illustration by Terry Allen Copyright 1998 Microsoft Corporation