The Fair Credit Reporting Act (FCRA) requires credit reporting agencies and the entities that report your credit data to ensure that your information is fair, accurate, and kept private. The FCRA also protects your right to access and correct any inaccuracies in your credit reports.
In addition, it provides legal remedies if a credit reporting agency or information furnisher violates your rights.
The Fair Credit Reporting Act (FCRA) (15 U.S.C. §§ 1681 and following), passed in 1970, is a federal law governing how credit reporting agencies handle your credit information. Under the FCRA, you have the right to know what information is in your credit reports, the ability to dispute inaccurate information, and the opportunity to request corrections.
The law also restricts who can access your credit reports, generally limiting it to entities that have a legitimate need (called a "permissible purpose"), like lenders, employers (with permission), and insurance companies.
The FCRA is designed to protect consumers by regulating the collection and dissemination of consumer credit information. It also protects the privacy of your credit data. The law limits access to sensitive personal information and gives consumers more control over who sees their credit data.
This law also requires credit reports to be accurate. The FCRA helps reduce instances of credit discrimination and unfair treatment based on inaccurate credit data. Ultimately, the FCRA sets standards for how credit reporting agencies collect, use, and share credit data and holds these agencies accountable.
Again, the FCRA regulates consumer reporting agencies. A "consumer reporting agency" is any entity that collects and furnishes credit information about consumers. A common type of consumer reporting agency is a credit reporting bureau, such as Transunion, Equifax, or Experian.
A company that collects and sells your credit information, often in the form of background checks, is also considered a consumer reporting agency. These companies often sell data to landlords, employers, or anyone else making a credit decision about a consumer.
The FCRA also regulates furnishers of credit information.
Under the FCRA, a credit reporting agency must:
To learn more about these FCRA rights and others, see "What Are Your Rights Under the Fair Credit Reporting Act?" below.
An "information supplier" or a "furnisher" is any entity that submits your credit information to a credit reporting agency. Creditors are furnishers. A furnisher might also be a third party with whom you have a loose credit relationship, like a government entity to whom you owe taxes, costs, or fines.
Under the FCRA, your creditor and any other information supplier:
If you dispute the inaccurate information with your creditor in writing, it can't continue to report the wrong information to a credit reporting agency until it investigates. It must also notify the agency of your dispute.
In addition to credit reporting agencies and your creditors, the FCRA governs anyone who uses your credit information for employment, credit, or insurance purposes. These users of your credit information must:
The FCRA regulates the credit reporting industry so that the collection and processing of consumers' credit data is fair, accurate, and private, which directly impacts lending, employment, and insurance decisions.
The FCRA provides consumers with the right to dispute inaccurate information in their credit reports, ensuring that any errors or outdated information don't unfairly impact their credit scores. If you find incorrect data, you can submit a dispute to the credit reporting agency, which must investigate and correct any inaccuracies, usually within 30 days. This dispute process allows consumers to maintain accurate credit histories and ensures that creditors and other entities making decisions based on credit reports have reliable information.
The FCRA also helps consumers spot potential identity theft by allowing them to review their credit reports annually, free of charge. (However, the credit reporting agencies now provide free weekly access to your reports.)
The FCRA provides consumers with various rights. For instance, you have a right to make sure that the information in your credit files is correct. You also get specific privacy rights and the right to find out what's in your credit files.
Again, under the FCRA, you have the right to dispute the accuracy and the completeness of items in your file. The distinction between accuracy and completeness can be significant. For example, your credit report might state accurately that a creditor sued you. But this information could be incomplete. Say you later paid the debt or weren't actually liable for it. You can dispute the information about the lawsuit because it's incomplete.
Inaccurate, incomplete, or unverifiable information usually has to be removed or corrected within 30 or 45 days.
In most cases, a consumer reporting agency may only report negative credit information for up to seven years. Bankruptcies can stay on your credit reports for seven years (Chapter 13 bankruptcies) or up to ten years (Chapter 7).
You have the right to get all the information about you contained in the file that a consumer reporting agency prepared, again, called a "file disclosure." Usually, the file disclosure is free.
Under the FCRA, you can get one free credit report every 12 months upon request from each nationwide credit reporting agency (Experian, Equifax, and TransUnion). However, during the COVID-19 pandemic, the agencies voluntarily started providing free weekly credit reports online, a service that's now permanent. To get your free reports, go to annualcreditreport.com.
You can also get a free file disclosure in some situations, such as if:
Specialty credit reporting agencies must also give you a free report every 12 months if you ask for it.
You may ask for your credit score from consumer reporting agencies that create or distribute scores. But you'll usually have to pay a fee for it.
However, you'll get your credit scores from the lender for free in certain mortgage transactions.
If someone uses your credit report or another type of consumer report to take some other adverse action against you, such as denying your application for credit, insurance, or employment, they must let you know. They also have to give you the name, address, and telephone number of the agency that provided the information.
A consumer reporting agency generally can't give your file to your employer or a potential employer without your written consent.
The FCRA provides certain rights for victims of identity theft and military personnel. For example, identity theft victims may ask businesses for a copy of transaction records relating to the theft.
Military personnel may place a year-long active duty alert on their credit files with the three major credit bureaus. If you put a fraud alert on your files, a creditor has to take extra steps to verify the identity of a person applying for credit under your name before going ahead with the transaction.
The FCRA allows credit reporting agencies to include your name on lists that creditors and insurers use to make offers to you, even though you didn't initiate the process. The FCRA also gives you the right to opt out of receiving these offers, preventing the agencies from providing your credit information for these offers. (15 U.S.C. § 1681b(c) (2024).) You can opt out for five years or permanently.
If you feel a notation on your credit report doesn't fully explain the situation (or if f you dispute an item in your credit report, but the credit reporting agency refuses to correct it), you have the right to add an explanatory statement to your credit reports. Once you file a statement a credit reporting agency, the agency must include your statement, or a summary of it, in any report that includes the disputed information.
If any of these three types of entities (credit reporting agency, information supplier, or user) violate the rules in the FCRA, you might be able to sue them in state or federal court for damages.
The FCRA lets you sue a credit reporting agency (or another person or entity that violates the law) for negligent or willful noncompliance with the law within two years after you discover the harmful behavior or within five years after the violation, whichever is sooner.
Under the FCRA, you can put a credit freeze (or "security freeze") on your credit files. A freeze prevents a credit reporting bureau from releasing your credit information to a third party. So, for example, if a thief tries to use your Social Security number and other personal information to apply for a mortgage loan or another form of credit, the creditor would reject the application because it couldn't check your credit.
You should request a credit freeze at the three national credit reporting agencies if you know someone has stolen your identity or you think you might become a victim of identity theft.
Learn how credit freezes can help protect your credit data from fraudulent use in "What's a Credit Freeze and When Should I Use One?"
Read "Most Common Violations of the FCRA" to find out how creditors and consumer reporting agencies often violate the FCRA.
Find out why you should avoid credit repair companies in "Don't Use a Credit Repair Clinic."
Also, visit our Fair Credit Reporting Act topic page to find additional articles on this federal law and related topics.
For more information about the FCRA, contact your state or local consumer protection agency, state Attorney General, or a local attorney.
Also, many states have laws similar to the FCRA. Some of these laws provide even more protection for consumers than federal law. Talk to a consumer protection lawyer or debt settlement attorney to learn more about protections under state law and potential remedies for violations.
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