Have you ever tried to pay for things with a check and the transaction was declined even though you had money in the bank? It might be because a consumer reporting agency gave the retailer negative information about your credit history – including your checking account history – or indicated that you could be a bad credit risk for other reasons.
While consumer reporting agencies help businesses avoid losing money due to bad checks, the system is only as good as the information it provides. If the report on your credit history is inaccurate, you’ve got bigger problems than the embarrassment and inconvenience of being turned away at the checkout line.
The Fair Credit Reporting Act (FCRA) helps ensure the accuracy, fairness, and privacy of the information provided by consumer reporting agencies. The FCRA also holds consumer reporting agencies and the creditors that provide the information in your credit report responsible for correcting inaccurate or incomplete information in your report.
Today, TeleCheck Services, Inc., agreed to pay $3.5 million to settle Federal Trade Commission (FTC) charges that it violated the FCRA by, among other things, failing to correct mistakes in consumer reports and refusing to investigate disputes.
The recommendations TeleCheck and other consumer reporting agencies make in their reports affect your ability to do just about everything – from buying groceries at the supermarket to buying a home. So it’s important to know your rights and take steps to make sure your credit report says the right things about you.
If your check is declined at checkout, ask the merchant to give you the contact information for the reporting agency. Then ask the agency why your check was declined and, for a copy of your annual credit report, free of charge. Note that the agency will have information only on the checks you’ve written to businesses that use that particular agency’s services.
Since the FCRA also entitles you to a free credit report every 12 months from each of the three national credit reporting agencies, it’s a good idea to make it a habit of checking for errors – and to dispute those errors as soon as possible.
To learn more about your credit report and credit scores, check out this video.