What is a FICO Score?
FICO scores are a type of credit score developed by Fair Isaac & Company. FICO scores use credit bureau information to obtain a score which indicates how likely someone is to make their loan payments on time. FICO scores range from approximately 300 to 850. The higher the FICO score the more likely someone is to make their payment and vice versa.
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What is the Fair Credit Reporting Act?
The Fair Credit Reporting Act governs credit reporting. Details can be found at the Fair Credit Reporting Act Home Page.
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What is a credit score?
Credit scores are numerical values that rank individuals according to their credit history. Your score is based on your past payment history, the amount of credit you have outstanding, and the amount of credit you have available.

When evaluating your loan application, lenders try to evaluate your ability and willingness to repay your loan. They judge your ability to repay by looking at your income and stability of your current employment. To judge your willingness to repay, the lenders look at your past credit history. Generally, if you have paid your bills on time in the past, you will continue to do so.
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How can credit score affect the interest rate I receive?
FICO scores are used in determining the price of a loan because they are believed to be good predictors of a borrower’s ability and willingness to repay the loan. Many mortgage loans are sold to investors who will pay a more favorable price for loans because they are less likely to default. Thus, applicants with a lower FICO score may pay higher prices for their loans because of the higher risk of default and loss. The Fair Credit Reporting Act is in place to protect individuals from unfairly high FICO Scores.
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Do I have a right to know what's in my credit report?
Yes, if you ask for it. The Credit Reporting Agency [CRA] must tell you everything in your report, and in most cases, the sources of the information. The CRA also must give you a list of everyone who has requested your report within the past year -- two years for employment related requests.
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Is there a charge for my credit report?
Sometimes. There's no charge if a company takes adverse action against you, such as denying your application for credit, insurance or employment, and you request your report within 60 days of receiving the notice of the action. The notice will give you the name, address, and phone number of the CRA. In addition, you're entitled to one free report a year if (1) you're unemployed and plan to look for a job within 60 days, (2) you're on welfare, or (3) your report is inaccurate because of fraud. Otherwise, a CRA may charge you for a copy of your report. By September of 2005, the Federal Trade Commission will require that all citizens will be able to obtain one free credit report per year from a centralized source set up by the three major CRAs.
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What can I do about inaccurate or incomplete information?
Under the law, both the CRA and the information provider have responsibilities for correcting inaccurate or incomplete information in your report. To protect all your rights under this law, contact both the CRA and the information provider.
First, tell the CRA in writing (this can be done on the World Wide Web) what information you believe is inaccurate. CRAs must reinvestigate the items in question - usually within 30 days -- unless they consider your dispute frivolous. They also must forward all relevant data you provide about the dispute to the information provider. After the information provider receives notice of a dispute from the CRA, it must investigate, review all relevant information provided by the CRA, and report the results to the CRA. If the information provider finds the disputed information to be inaccurate, it must notify all nationwide CRAs so that they can correct this information in your file.

When the reinvestigation is complete, the CRA must give you the written results and a free copy of your report if the dispute results in a change. If an item is changed or removed, the CRA cannot put the disputed information back in your file unless the information provider verifies its accuracy and completeness, and the CRA gives you a written notice that includes the name, address, and phone number of the provider.

Second, tell the creditor or other information provider in writing that you dispute an item. Many providers specify an address for disputes. If the provider then reports the item to any CRA, it must include a notice of your dispute. In addition, if you are correct -- that is, if the information is inaccurate -- the information provider may not use it again.
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What can I do if the CRA or information provider won't correct the information I dispute?
A reinvestigation may not resolve your dispute with the CRA. If that's the case, ask the CRA to include your statement of the dispute in your file and in future reports. If you request, the CRA also will provide your statement to anyone who received a copy of the old report in the recent past. There usually is a fee for this service.
If you tell the information provider that you dispute an item, a notice of your dispute must be included anytime the information provider reports the item to a CRA.
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How long can a CRA report negative information?
Seven years. There are certain exceptions:
• Information about criminal convictions may be reported without any time limitation.
• Bankruptcy information may be reported for 10 years.
• Information reported in response to an application for a job with a salary of more than $75,000 has no time limit.
• Information reported because of an application for more than $150,000 worth of credit or life insurance has no time limit.
• Information about a lawsuit or an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer.
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Can anyone get a copy of my report?
No. Only people with a legitimate business need, as recognized by the FCRA. For example, a company is allowed to get your report if you apply for credit, insurance, employment, or to rent an apartment.
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Can my employer get my report?
Only if you say it's okay. A CRA may not supply information about you to your employer, or to a prospective employer, without your consent.
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Can creditors, employers, or insurers get a report that contains medical information about me?
Not without your approval.
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What should I know about "investigative consumer reports"?
"Investigative consumer reports" are detailed reports that involve interviews with your neighbors or acquaintances about your lifestyle, character, and reputation. They may be used in connection with insurance and employment applications. You'll be notified in writing when a company orders such a report. The notice will explain your right to request certain information about the report from the company you applied to. If your application is rejected, you may get additional information from the CRA. However, the CRA does not have to reveal the sources of the information.
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How can I stop a CRA from including me on lists for unsolicited credit and insurance offers?
Creditors and insurers may use CRA file information as a basis for sending you unsolicited offers. These offers must include a toll-free number for you to call if you want to remove your name and address from lists for two years; completing a form that the CRA provides for this purpose will keep your name off the lists permanently.
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Do I have the right to sue for damages?
You may sue a CRA, a user or -- in some cases -- a provider of CRA data, in state or federal court for most violations of the FCRA. If you win, the defendant will have to pay damages and reimburse you for attorney fees to the extent ordered by the court.
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Are there other laws I should know about?
Yes. If your credit application was denied, the Equal Credit Opportunity Act requires creditors to specify why -- if you ask. For example, the creditor must tell you whether you were denied because you have "no credit file" with a CRA or because the CRA says you have "delinquent obligations." The ECOA also requires creditors to consider additional information you might supply about your credit history. You may want to find out why the creditor denied your application before you contact the CRA.
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Some of the FAQs were taken from Hometown Mortgage Solutions, Inc. and the Federal Citizen Information Center