The FACTA or Fair and Accurate Credit Transactions Act came into force in 2003. It is a law that was enacted to protect the rights of the consumers by the federal government. The new law amended the earlier FCRA or Fair Credit Reporting Act that had come into force in 1970. The key aim of the FACTA Act is to lower the risks associated with identity theft. It does so by regulating the handling of information on consumer accounts like SCNs or Social Security Numbers. It is the FTC or Federal Trade Commission, Office of Thrift Supervision, Comptroller of the Currency, National Credit Union Administration, Federal Deposit Insurance Corporation, and the Federal Reserve System’s Board of Governors that enforced the FACTA. The act lays down certain requirements to protect privacy of information, restricts the ways of sharing, disposal and accuracy of consumer information
Check out some of the other key details related to the Fair and Accurate Credit Transactions Act:
- Any system that is engaged in the printing of payment card receipts should employ truncation of PAN or personal account number. The aim is to ensure that the complete account number of a consumer cannot be seen on the slip.
- It is possible for a consumer to put an alert message on his/her file if there is a suspicion of being victims of scam or fraud.
- All the 3 major agencies for credit reporting should provide credit reports to the consumers without any kind of charge.
Simplifying the FACTA (Fair and Accurate Credit Transactions Ac) further for ease of understanding
After FACTA was enforced, consumers are now in a position to request for their credit reports absolutely free of cost. They can get this report once every year. The 3 key credit reporting agencies such as Transunion, Experion and Equifax are supposed to supply these reports on request,
Requirements were placed on the lenders of mortgages to share consumer information like factors contributing to a mortgage loan’s price and credit scores as a part of the FACTA. The act also specifies standards, which require both the regulators and the lenders to show more proactiveness to spot identity thefts prior to its occurrence by examining the suspicious patterns.
Defining a credit report
It is a report that has the detailed credit history of an individual. It is the function of the credit bureaus to gather relevant information so that the credit reports can be created based on such information. On the other hand, the lenders use these reports as well as some other details for ascertaining the creditworthiness of loan applicants. The United States of America has 3 top credit reporting bureaus whose names have been already mentioned in an earlier section of this discussion. Each of these three bureaus gathers information on the personal details of the consumers as well as their habits of bill-paying for creating an individual and unique credit report. While a majority of information shared by the three bureaus appears similar to one another, small distinctions do exist between all these three credit reports.
Simplifying the ‘credit report’
A credit report constitutes of personal information of consumers like previous and present addresses, employment history and social security numbers. The reports also consist of a summary of credit history like the type and number of accounts, which are in good standing or are past due. They also include account information in detail related to dates on which an account was first opened, credit limits and high balances.
A credit report also includes account details that were shared with credit agencies like information about wage garnishments and liens and credit inquiries. Usually, a credit report contains negative information if any for a period of 7 years. On the other hand, a bankruptcy filing may be retained on the reports for around a decade.
How to read a credit report?
A credit report usually classifies information into 4 separate sections. On the top of this report, you will find your personal information. In several cases, the top section can also contain the Social Security Numbers or variances of the name of the consumers. The reason could be because an entity such as a lender would have reported the information in an incorrect manner.