Fair Credit Reporting Act and Bankruptcy

In 1970 Congress passed the Fair Credit Reporting Act (FCRA) to protect consumers from unfair credit and credit reporting agencies. The act is to “ensure that consumer reporting agencies exercise their grave responsibilities with fairness and partiality and respect for the consumer’s right to privacy.”

Under this act, among other things, you have the right to know what is on your credit report, what your credit score is, and the right to dispute incomplete or inaccurate information on your report.

If you are having a difficult time keeping up with your debt and your credit score is getting lower, you may want to consider filing bankruptcy to stop the reports of late and missed payments.

Credit Rating

Your credit rating is a valuable tool when you are trying to get credit for a purchase. Your credit rating is based on your employment, financial history and how much debt you owe. Other data collected is how prompt you are when making your payments. This information is obtained by lenders and prospective lenders from your entries on credit card and loan applications. This information is sent to one of the three major United States credit bureaus, Equifax, Experian, and Transunion. These companies keep a massive database of consumer information. The credit information is gathered and compiled into a score. This score let’s prospective lenders predict how good of a credit risk you are.

FICO Score

A credit score is based on a range of numbers called a FICO. FICO stands for Fair Isaac Corporation for the company that developed the scoring system. The number can range from 300 to a perfect score of 850 — the higher your score, the better your credit options and interest rates you will receive.

If you are looking for debt relief, contact a Dallas bankruptcy attorney to find out what options you may have.