Fair credit reporting act gets tweaked by congress

Votes due this fall in both Houses

San Diego, CA- A H.R 2622 is a bill working its way through Congress and is titled "Fair and Accurate Credit Transactions Act of 2003. It amends the current Fair Credit Reporting Act to "prevent identity theft,
improve resolutions of consumer disputes, improve accuracy of consumer records, make improvements in the use of, and consumer access to credit information, and for other purposes."

When approved by Congress, the House may vote in September and the Senate later in the fall, the new provisions will make it easier for consumers in all fifty states to deal with their credit files. Among
the provisions are a free copy, annually upon request, of credit reports from each of the three credit reporting agencies (CRAs), disclosure of credit scores, which are used by lenders when making lending decisions,
the latter is similar to a California law already on the books. Further, when requesting your free credit reports, the proposed law includes a provision whereby the CRA's must notify consumers of their right to get
their credit scores and also include an explanation of factors that may have a negative affect on your score.

Another provision calls for creditors to notify a consumer whenever negative information is going to be sent to a CRA for inclusion on your credit file. This provisions would drastically reduce the number of inaccurate reports going into files because the consumer will know in advance. Currently creditors submit negative information to the CRA's and never have to notify the consumer. Under this provision, consumers
would know in advance if a lender was making a false report on a late pay or other delinquency, for instance, and therefore may dispute it in advance of it hitting credit files.

Further, to help consumers who are actively shopping for a mortgage, automobile or other type of loan, avoid having an incredible number of inquiries on their credit reports as a result, would receive a special
notification from the CRA that these inquiries are lowering the consumer's credit score.

A new provision in H.R. 2622 would support the use of a helpful option known as "rapid rescoring" which would be used when applying for a mortgage. Example: A consumer makes application for a mortgage and
some negatives appear, which the consumer is unaware of, and as a result is offered a mortgage at a sub-prime rate of interest. Consumers currently have the right to ask the loan officer to reveal the data the
lender obtained and point out any mistakes, however errors could not quickly be corrected for the borrower to qualify for the market interest rate. With the new provision for so-called "rapid rescoring" consumers
may ask for a rescoring which could be done in about 72 hours thereby enabling a consumer to get the market interest rate. The lender must request the rescoring from dozens of qualified credit bureaus to rescore your files based on documentation you submitted about the mistakes. Individual consumers may not contract with CRA's to perform rescoring.

More information about agencies that engage in rapid rescoring may be
found at www.ncrainc.org

More information about H. R. 2622 may be found at:
http://financialservices.house.gov/media/pdf/108hr2622ai.pdf

For help correcting credit file mistakes and free information about the credit file correction process, please visit: www.icfe.info. To receive the same information by mail, please send $1 and a self-addressed, 60 cent stamped envelope to: ICFE, Credit File Mistakes, PO Box 34070 San Diego, CA 92163-4070.

For more information contact: Paul Richard, RFC - ICFE Executive
Director at 619-239-1401