The Fair Credit Reporting Act (FCRA) (15 U.S.C. §§ 1681 and following) is a federal law that governs how credit reporting agencies handle your credit information. This law protects the integrity and privacy of your credit data.
The FCRA requires these agencies—and the entities that report your credit data to them and others—to ensure that your information is fair, accurate, and kept private. The FCRA protects your right to access and correct any inaccuracies in your credit reports.
It also provides legal remedies if a credit reporting agency or information furnisher violates your rights.
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.
Under the FCRA, a credit reporting agency must:
To learn more about your FCRA rights, see "What Are Your Rights Under the Fair Credit Reporting Act?" below.
An "information supplier," also known as 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 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.
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." Sometimes the file disclosure is free. Other times, you might have to pay a fee.
You can get one free credit report every 12 months upon request from each nationwide credit reporting agency (Experian, Equifax, and TransUnion). To get your free reports, go to annualcreditreport.com.
You can also get a free file disclosure in some situations, like 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—like 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.
If any of these three types of entities (credit reporting agency, information supplier, or user) violates 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.
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.
For more information about the FCRA, contact your state or local consumer protection agency, your 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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