How California’s Credit Reporting Law Affects Your Credit
Credit bureaus are information brokers, collecting and providing information about you to lenders. They maintain a file, or credit report, on each consumer that lists the person’s credit history. This information helps lenders determine whether to extend credit to you. Insurance companies, landlords, and employers use credit reports published by the three major credit reporting agencies (CRA) to judge your reliability and trustworthiness.
What Is a Credit Bureau?
A credit bureau collects personal data about consumers to generate their credit scores. The three major credit bureaus are Equifax, Experian, and TransUnion. Every time you apply for a line of credit, your lender will check one or more of these bureaus to pull your report and decide whether to approve your application. They can be affiliated with government agencies, banks, employers, insurance companies, and even utility companies.
What if There Are Errors in My Report?
The law establishes new rules for credit repair companies to follow when helping consumers get inaccurate information removed from their reports. If there is erroneous information on your report, you have the right to dispute it with the reporting company and demand that they conduct an investigation. If the reporting agency finds an error, they must remove inaccurate information from your report within 30 days.
California’s Consumer Credit Reporting Agencies Act
California’s credit reporting law is a set of regulations in the California Civil Code. Civil Code section 1785.25 specifically addresses the obligations of creditors and collection agencies that furnish information to credit bureaus about consumers. While the federal Fair Credit Reporting Act (FCRA) provides most of your rights to correct inaccurate information in your credit report, the CCRAA offers additional protections. This law helps protect consumers and gives them more control over how their personal information is used when they apply for credit, insurance, housing, or employment. The California Consumer Reporting Agencies Act dictates what creditors can report and how that information is used. California’s law regarding credit reporting puts you, the consumer, in control of your credit history.
The law allows you to:
- Review your credit report and make sure it is accurate
- Correct any inaccuracies on your credit report
- See who has accessed your credit report
- Challenge an item on your credit report
- Obtain a free copy of your credit report annually
Your Rights in the Law
Your credit repair attorney can help you dispute incorrect information and remove items from your credit report that should not be there. If a CRA fails to correct inaccurate consumer information after being notified by a consumer that there is an error, the consumer can bring legal action against them. The CRA is then liable for “any actual damages sustained, and any costs associated with prosecuting the action” and attorney’s fees.
Leverage Credit Reporting Law
California’s credit reporting law makes it easier for people to correct errors on their credit reports. It also allows them to sue a credit reporting agency if the agency fails to correct errors promptly. If you are denied a credit application—or if you were given worse terms than someone else with a better score—you may be able to file a lawsuit against the credit reporting agency or against the creditor who reported erroneous information. You can also sue businesses that report inaccurate information to the credit bureaus.
We Can Help
Your credit repair attorneys at Lakeshore Law Center will help interpret the California Consumer Credit Reporting Agencies Act and determine if you can correct your credit score. If you’re a resident of California in the communities of Yorba Linda, Los Angeles, San Francisco, San Diego, or Santa Ana, call us at (714) 854-7205 today to schedule an appointment.