What Is the Fair Credit Reporting Act?

The Fair Credit Reporting Act (FCRA) (15 U.S.C. § 1681 and following) is a federal law that governs how a credit reporting agency (CRA) handles your credit information. It's designed to protect the integrity and privacy of your credit information. The FCRA requires credit reporting agencies—and the entities that report your credit information to them and others—to ensure that your information is fair and accurate, and kept private. The FCRA protects your right to access and correct any inaccuracies in your credit report and provides you with remedies if a credit reporting agency or information furnisher violates your rights.

Who or What Is a CRA?

A "CRA" is any entity that collects and furnishes credit information about you. A common type of CRA is a credit bureau, such as Transunion, Equifax, or Experian. A CRA also includes a company or person who collects and sells your credit information (often in the form of background checks) to landlords, employers, or anyone else who makes a credit decision about you.

Obligations of a CRA

A CRA is obligated to:

• upon your request, provide you with the information it has on file about you (called your "file disclosure"), often for free
• provide you with your credit score upon your request, though you'll most likely have to pay a fee
• investigate disputed credit information in your file (subject to a few exceptions)
• correct or delete any inaccurate, incomplete, or unverifiable information within 30 or 45 days of receiving notice of your dispute, depending on the situation
• refrain from reporting old credit information, usually more than seven to ten years old
• limit disclosure of your credit file to third parties who have a legitimate need, such as a creditor, landlord, or employer, and
• withhold disclosure of your credit information to employers unless you consent.

Who or What Is an Information Supplier?

An "information supplier," which is also known as a "furnisher," is any entity that submits your credit information to a CRA. Usually, that means your creditor. But it could also mean any other third party that you have even a loose credit relationship with, such as a government entity to whom you owe taxes, costs, or fines.

Obligations of an Information Supplier

Under the FCRA, your creditor and any other information supplier:

• must not report to a CRA any information about you that it knows—has "reasonable cause" to know—is inaccurate
• has a duty to promptly update and correct any inaccurate information that it previously supplied to the CRA
• must tell you about any negative credit information it reports to a CRA within 30 days
• must notify the CRA when you voluntarily close an account with it, and
• must maintain a "reasonable procedure" to respond to identity theft notices by a CRA, and refrain from reporting information about an account that you previously reported was the result of identity theft. (15 U.S.C. § 1681s-2).

If you dispute the inaccurate information with your creditor, in writing, it can't continue to report the wrong information to the CRA until it investigates. It must also notify the CRA of your dispute.

Users of Credit Information

In addition to CRAs and your creditors, anyone who uses your credit information for employment, credit, or insurance purposes is covered by the FCRA. They must:

• notify you if they turn you down based on what they found in your credit report, and
• identify the CRA or information supplier who provided the report. (15 U.S.C. § 1681m).

Remedies

If any of these three types of entities (CRA, information supplier, or user) violates the rules in the FCRA, you might be able to sue them in state or federal court for damages. If you're in the military, you might have additional protections and remedies. Your state's laws could also offer additional relief and remedies. To learn more about your rights and remedies, talk to a lawyer. For more information on the FCRA in general, visit the Federal Trade Commission's section on credit reporting, which includes information about the FCRA.