The Fair Credit Reporting Act
The Fair Credit Reporting Act (FCRA) is a federal law (15 U.S.C. § 1681) designed to ensure accuracy, fairness, and privacy of consumer information in credit bureau files. It regulates how credit reporting agencies collect, use, and share data, protecting consumers from inaccurate reporting and identity theft while requiring transparency in credit, employment, and insurance screenings.
Federal Trade Commission (.gov)
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Core Purpose
- Accuracy & Integrity: Ensuring consumer reporting agencies (CRAs) maintain accurate and up-to-date data.
- Fairness & Privacy: Restricting access to credit reports to only those with a “permissible purpose,” such as creditors, insurers, or landlords.
- Regulation: Governing the activities of credit bureaus and the accuracy of information provided by data furnishers.
- SecurityScorecard
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Key Consumer Protections
- Free Credit Reports: Right to one free report annually from each national bureau (Equifax, Experian, TransUnion).
- Dispute Rights: Right to dispute inaccurate information, requiring CRAs to investigate and resolve errors, typically within 30 days.
- Adverse Action Notification: Right to know if a report was used against you to deny credit, employment, or insurance.
- Identity Theft Protection: Rights to place fraud alerts and security freezes on reports.
- Obsolete Info Removal: Restrictions on reporting negative information, generally limiting it to seven years (ten years for bankruptcy).
- NCUA (.gov)
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Regulated Parties
- Consumer Reporting Agencies (CRAs):Entities that assemble or evaluate credit information, including nationwide bureaus and specialty agencies (tenant screening, employment history).
- Users of Consumer Reports: Lenders, employers, landlords, and insurance companies that use reports to make decisions.
- Furnishers of Information: Banks, credit card companies, and lenders that provide consumer credit information to reporting agencies.
