Fair Credit Reporting Act

The Fair Credit Reporting Act — What It Means To You

The Fair Credit Reporting Act (FCRA) is a federal law created to promote accuracy, fairness and privacy of personal information gathered by credit reporting agencies (CRAs). The FCRA regulates the use of personal information by private businesses. Its purpose is to ensure that CRAs follow “reasonable procedures” to protect the confidentiality, accuracy and relevance of consumer credit information.

 

The formation of the FCRA

Retail Credit Co. was the first major CRA that is furnished by creditors and started in 1899.1 The agency purchased a number of smaller CRAs over time and began to sell consumer credit reports to insurers and employers. At the time, there were no laws governing how CRAs operated. By the 1960s, significant controversy had developed around their practices. Consumers were not allowed to see what was in their reports, which often contained outdated or inaccurate information.

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secured credit card

A Secured Credit Card — Your Stepping Stone on the Path to Building Credit

Many people find themselves in need of a credit card but are unable to qualify for one. For younger people without enough credit history, or someone that’s trying to repair bad credit, a secured credit card can be a good option.

Unlike an unsecured credit card, a secured card requires you to make a security deposit that serves as collateral for your credit line when the account is opened. Any deposit in excess of your account balance is refundable once you close the account.  You cannot use your security deposit to pay your monthly bill, otherwise a secured card works like any other credit card and offers significant advantages over a prepaid card, such as the opportunity to build a positive credit history, as payment behavior is reported to the major reporting agencies.

 

Secured card features

As with all credit cards, there are many choices for secured cards and it’s a good idea to do some research on which card fits your needs best.

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