Your Legal Rights

Who Can Access My Credit Report?

Federal law states that only certain people can obtain a copy of your credit report and that your credit report can only be used in a certain manner. You may request a copy of your credit report at any time but only those associated with one of the following may legally review your report:

• Application for a government license
• Credit transaction or legitimate business inquiry
• Hiring and promoting purposes
• Insurance

There are two exceptions to this rule, however. You may give written permission for someone else to access your credit report and a court or federal grand jury may obtain a copy of your credit report through subpoena.

What Creditors Can And Can Not Consider

The Equal Credit Opportunity Act (ECOA) passed in 1974 and then amendments to it in 1976, made it unlawful for lenders to discriminate on the basis of:

• Sex
• Marital Status
• Race
• Color
• Religion
• National Origin
• Age
• Receipt of Public Assistance

Lenders can consider:

• How much money you make
• How long you've lived where you live now
• How much your home, car or other assets are worth
• How much money you have in the bank
• Whether you pay your bills on time
• How long you've worked for the same company
• How much money you owe to others

These factors are commonly divided into what's called "the 3 C's of consumer credit":

• Character: This includes your length of residency and employment, which give lenders an indication of your personal character. Other ways lenders evaluate financial character is by reviewing your existing credit relationships: credit cards, bank loans, mortgages, etc.
   
• Capacity: Living expenses, open credit limits, current debts and other payments give lenders an idea of how much money you are already paying out and your ability to pay back any future debts.
   
• Collateral/capital: This allows creditors to secure a loan. Thus, the worth of these assets is important to the decision to extend credit/loans.

How Long Does Information Stay On Your Credit Report?

Federal law specifies that past errors can't haunt you or your credit report forever. Late payments, accounts that have been turned over to a collection agency, judgments filed against you in court, and most other blemishes are removed in seven years. The seven years is calculated from either the date of the original delinquency or by the date of filing (if it's a matter of public record). The length of time that bankruptcy remains on your credit report depends on which type of bankruptcy you have filed. Chapters 7, 11 and 12 remain for 10 years. A Chapter 13 (in which you do pay at least a portion of your debts) remains on your credit report for only 7 years. Inquiries also remain on your credit report for varying lengths. Depending on the type of inquiry, this can be between one and two years. Positive information remains on your report indefinitely.