Understand the Fair Credit Reporting Act (FCRA)

What you should know about your rights under the Fair Credit Reporting Act (FCRA)

Editor’s Note: FairShake is not an attorney, law firm, or financial advisor. Our content team conducts research to the best of our ability to ensure this content is accurate, but it does not replace professional financial or legal advice.

In this article

What is the FCRA?
Your rights under the FCRA
Pursue your rights under the FCRA

What is the FCRA?

The Fair Credit Reporting Act (FCRA) is a federal law that helps to ensure the accuracy, fairness and privacy of the information in consumer credit bureau reports.

The act details how a consumer’s credit information can be obtained, how it can be shared, how long it can be stored, and when it must be deleted.

The act is aimed at the three major credit reporting agencies (Equifax, TransUnion, and Experian). It also applies to:

• Specialty reporting agencies such as agencies that sell information about check writing histories, medical records, and rental history records.
• Businesses that use credit reports as part of their hiring process.
• Banking institutions like banks, credit unions, etc.

The FCRA was enacted in 1970 and has been amended twice to allow for growing problems such as identity theft, most recently in 2009.

The Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) are the federal agencies that oversee the FCRA. Many states have their own state laws related to credit reporting, enforced at the state level.

Also from FairShake:

• Your rights under the Fair Debt Collection Practices Act (FDCPA)
• Your rights under the Truth in Lending Act (TILA)
• Your rights under the Telephone Consumer Protection Act (TCPA)

What are your rights under the FCRA?

Your right to your credit information

The FCRA provides that each of the three credit reporting agencies will give you one free credit report each year. The three agencies must disclose your credit score to you as well, but they are allowed to charge a fee for that.

Additionally, if you are denied on a credit application, you are entitled to the information related to the denial.

Your right to dispute errors

Inaccuracies must be corrected or removed. If you found mistakes and reported them to the consumer reporting agency and they cannot verify that the information is in fact correct, they must remove it within 30 days.

You can (and should) dispute credit reporting errors.

Additionally, if you suspect your identity has been stolen, you can temporarily freeze your credit.

Limits others’ access to your credit info

Under the FCRA, he only people or companies allowed to access your credit report are those with “permissible purpose.”

Examples of parties with a permissible purpose are fairly broad, including:

• Lenders and creditors you are directly applying for credit with, like mortgage lenders and credit card companies
• Existing creditors you already have a relationship with
• Debt collection companies that your past debts may have been sold to
• Insurance companies, to underwrite insurance involving you
• Potential lenders who prequalify you for credit or insurance for marketing and solicitations
• Rental companies/landlords, phone and utility companies
• Certain government agencies

Employers or prospective employers must ask for and receive your permission before they may review your credit report.

You are also protected from having medical information in a consumer report, as creditors are prohibited from obtaining or using medical information when making a credit decision.

The FCRA also empowers you to request that you be removed from all unsolicited prescreened offer lists for credit and insurance. To start this process go to optoutprescreen.com or call 1-888-5-OPT-OUT (1-888-567-8688).

Protects your private financial information

The FCRA is the reason why businesses are not permitted to publish full credit card numbers on receipts. It’s also why only a partial Social Security number is included on your credit report.

Been treated unfairly by a debt collector? Tell us

How can you enforce your rights under the FCRA?

Some ways to pursue enforcement of your rights under the FCRA:

• Reach out to the credit reporting agencies at the earliest signs of identity theft.
• File a complaint with the Consumer Financial Protection Bureau here.
• File your dispute directly with credit reporting agencies, starting here.
• Take legal action against credit reporting agency. Tell us your complaint below to share with attorneys.