Fair Credit Reporting Act in general
The Fair Credit Reporting Act (FCRA) is a federal law governing credit reporting agencies and requiring them to ensure that the information they receive and publish is a fair and accurate description of the credit history of a customer.
The FCRA is primarily concerned with the way credit reporting agencies use the credit history details that they provide. The legislation aims to protect consumers from disinformation that is being used against them. It provides very specific guidelines on the methods used by credit reporting agencies to obtain and verify the information and describes reasons for the release of information.
The legislation also extends to banks, credit unions and companies providing medical records and records of writing or rental background checks, as well as any entities using credit reporting information for recruiting purposes.
The FCRA has often come up in media coverage when advocacy groups challenge the integrity of collecting information credit reporting agencies and the right of customers to contest the information and delete it from their credit report.
Summary of Your Rights Under the Fair Credit Reporting Act
- You need to be informed whether information was used against you in your case.
Anybody who uses a credit report or any other type of consumer report to deny your credit, insurance or employment application –or to take any other negative action against you– must tell you the name, address and telephone number of the agency that provided the information.
- You are entitled to know what’s on your file.
You should ask for and receive all the information about you in a consumer service agency’s reports (your “file disclosure”). You will be asked to properly identify which may include your Social Security number. In many instances, it will be safe to report it. You are entitled to a free disclosure of the file if:
- an individual has taken negative action against you due to details in your credit report;
- You are the victim of identity theft and warn yourself to fraud;
- your file contains inaccurate information as a result of fraud; or
- you are on public assistance; or you are unemployed but plan to apply for a job within 60 days.
Therefore, all customers are entitled to one free disclosure every 12 months at the request of each regional credit office and national specialty consumer reporting agency.
- You are allowed to request a credit score.
Credit scores are numerical summaries of your creditworthiness, based on credit bureau knowledge.
- You are entitled to challenge knowledge which is incomplete or inaccurate.
If you find missing or inaccurate information in your file, and report it to the consumer 2 reporting agency, the agency will decide if your dispute is not frivolous.
- Limited access to your computer.
A consumer reporting agency may provide information about you only to people with a legitimate need – usually with a creditor, lender, employer, landlord, or other business considering an application. The FCRA sets out those with a valid access requirement.
- Consumer reporting agencies must correct or delete information which is inaccurate, incomplete or unverifiable.
Inaccurate, incomplete, or unverifiable information, usually within 30 days, must be deleted or corrected. A consumer reporting agency may however continue to report information that it has checked as reliable.
- Customer reporting agencies may not disclose the negative information obsolete.
In most cases, a consumer reporting agency may not disclose negative information older than seven years, or bankruptcies older than 10 (ten) years.