In bygone days, lenders contrived all sorts of crazy ways to determine your credibility…
Like where you’ve lived, where you’ve worked, and even your ‘moral standing within the community.’
Sounds a little haphazard, doesn’t it,{{contact.first_name}}?
Hence, in 1970, the government passed the Fair Credit Reporting Act (FCRA) to reign in malpractice among credit bureaus.
FICO scores were introduced to pre-empt discrimination and provide a more quantitative approach in determining one’s credit viability.
Laws now regulate the type of information obtained by credit bureaus, how long it is kept for, and how it is shared.
The type of information collected may include:
- Payment history
- Past loans, current debts, employment information, previous addresses
- And whether you have filed for bankruptcy, owe child support, or have any criminal record.
Laws also regulate who is allowed to see your credit report and under what circumstances they are permitted to obtain it.
For example, lenders can check your score when you apply for a mortgage, car loan, or new credit (this is called a hard credit inquiry).
In most cases, the credit bureaus will require your consent before releasing your information to third parties.
Laws also dictate that you are able to check your own credit score without any repercussions.
So, who’s with us in celebrating the 70s?!
Not just for good rock and roll, but also for the introduction of fair credit reporting :)
If you require any additional information pertaining to the legalities of your credit and data collection, we encourage you to reach out at any time!
