Establishing a credit history is important for individuals wishing to borrow funds to purchase property for residential or commercial purposes. When applying for a loan, lenders will obtain a credit report that includes a detailed and factual record of an applicant’s credit payment history. A credit history is built by making payments towards any type of debt including credit cards, car loans, student loans and mortgages.
Credit reports are provided by a credit bureau for purposes permitted by law, generally as part of a loan application. Experian, Transunion and Equifax are the three primary Credit Reporting Agencies (CRA) in the United States. Bureaus collect the information in credit files directly from creditors along with government agencies such as legal court systems.
Identity theft and errors in credit reporting can damage credit files. To ensure accurate credit history reporting, a credit monitoring service can be purchased. Credit monitoring services often provide complete credit reports and updates monthly.
The Fair Credit Reporting Act (FCRA) is a United States federal law that protects consumer rights by regulating the collection, distribution, and use of consumer information, including consumer credit information. Consumer protection under the FCRA includes:

  • The right to receive a copy of your complete credit report with all information on file included at the time of the request
  • The right to receive the name of anyone who obtained your credit report in the last year for general purposes or in the last two years for employment purposes. If your application for credit was denied based on information received in a credit report, the company must provide the name and address of the CRA that supplied your information.
  • The right to receive a free credit report when your credit application is denied because of information supplied by a CRA. To obtain the free report, you must request it within 60 days of receiving a denial notice.
  • The right to contest the accuracy of information in your report. Both the CRA and the company that provided your information to the CRA are obligated to investigate your dispute. If your dispute is not resolved to your satisfaction, you are entitled to add a summary explanation to your credit report.