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The Fair Credit Reporting Act (FCRA)
The Federal Fair Credit Reporting Act is the main law for consumers and companies as it relates to the credit reporting system we have here in the United States. It not only protects consumers by specifying their rights, it also lists the responsibilities of companies who collect the credit information, distribute the credit reports, and use the information.
In general the Fair Credit Reporting Act covers more than just credit reporting companies such as credit bureaus. It now defines and covers all consumer reporting agencies that gather, retain, compile, issue, and use credit reports, insurance reports, employee background reports, tenant screening, bank bad check and overdraft reports, and other consumer reports based on consumer reporting information such as consumer credit experiences, court records, and other personal consumer information.
- Layman's Guide to the Fair Credit Reporting Act Law (FCRA) - Here are the sections of the FCRA with a simplistic description of the contents of each section. Note we are not attorneys or lawyers, and the descriptions are not legal interpretations you can rely on. For specific legal advice, you should contact your lawyer with questions or review the exact text of the law.
- Summary of Your Rights under the FCRA - Here is a summary of your rights under the FCRA. It covers issues such as confidentiality, credit report disputes, obsolete information in your report, the permissible uses of your information, identity theft, and free credit reports.
- Rights Under Law to Free Credit Reports - There are circumstances under the Fair Credit Reporting Act and under the Fair and Accurate Credit transactions Act (FACTA) of 2003 where consumers are entitled to copy of their credit report for free.
- Complete Copy of the Fair Credit Reporting Act Law - We provide a convenient copy of the law.
- Section 601- The popular name of the law is the "Fair Credit Reporting Act" or the FCRA for short -- go to Section 601.
- Section 602 - Why Congress found a need for the law, i.e. a credit reporting system that is fair and accurate to the consumer, and protects the privacy and specifies the permitted uses of consumer information -- go to Section 602.
- Section 603 - Important definitions of key terms used in the Act. For example, a person is defined as an individual or an organization, but a consumer is defined only as a natural person. The law also defines what is a consumer report, a consumer reporting agency, consumer reports for employment purposes, and adverse actions -- go to Section 603.
- Section 604- This section is about the situations in which consumer reporting agencies may provide a consumer report. These situations are also called the "Permissible Purposes" to obtain a report. The section also lists some purposes where a consumer report may not obtain a report, e.g. marketing, curiousity, law enforcement -- go to Section 604.
- Section 605- Controls the time limit of when consumer information can be reported. In general that is 7 years for adverse data other than bankruptcy which can be up to 10 years. This section also controls when the time period limit starts running -- go to Section 605
- Section 605A- About Identity Theft including filing initial fraud alerts, extended alerts and active duty alerts -- go to Section 605A.
- Section 605B- In certain situations the Consumer Reporting Agencies (CRA's) must block information as a result of Identity Theft --
go to Section 605B.
- Section 606- One of the main point of this section on investigate consumer reports, like employment reports, is that there are required disclosures that must be made to consumers -- go to Section 606.
- Section 607- Compliance section, which means that CRA's must maintain reasonable procedures to avoid violating Section 604 and 605 of the Act, such as providing obsolete information or furnishing reports for non permitted purposes -- go to Section 607.
- Section 608- When a government agency can see your report and what they can see -- go to Section 608.
- Section 609- What must be disclosed to consumers upon request -- go to Section 609.
- Section 610- To obtain your own report, consumers must provide identification, and disclosures must generally be in writing -- go to Section 610.
- Section 611- Procedures when the consumer disputes the accuracy or completeness of an item in their file -- go to Section 611.
- Section 612- Not all credit reports are free, some may incur a fee -- go to Section 612.
- Section 613- CRA's must be careful about furnishing public records for employment reports -- go to Section 613.
- Section 614- Talks about investigative consumer reports and using information from an old report -- go to Section 614.
- Section 615- Users and others who obtain consumer reports have important responsibilities -- go to Section 615.
- Section 616- Dollar liability for those who willfully violate the Act -- go to Section 616.
- Section 617- Liability for those who are negligent in failing to comply with the Act -- Section 617.
- Section 618- Bring actions in US district courts within a specified time frame -- go to Section 618.
- Section 619- Fines and potential imprisonment for obtaining information under false pretenses -- go to Section 619.
- Section 620- Fines and potential imprisonment for the officers and employees of the CRA -- go to Section 620.
- Section 621- The Federal Trade Commission is the main enforcer of the Act -- Section 621.
- Section 622- Requirements regarding the reporting of overdue child support -- go to Section 622.
- Section 623- Companies that report your credit information have important responsibilities -- Section 623.
- Section 624- Governs affiliates who may have access to the report for marketing etc. -- go to Section 624.
- Section 625- Does not exempt state laws except to extent state law is inconsistent with this law -- go to Section 625.
- Section 626- The FBI has special rights to see your file -- go to Section 626.
- Section 627- Counterterrorism has special rights to see your file -- go to Section 627.
- Section 628- Properly dispose of consumer information to protect the confidentiality of the information -- go to Section 628.
- Section 629- Prevents consumer reporting agencies from circumventing the law -- Section 629.
Complete Text of the Law - the Fair Credit Reporting Act
A Summay of Your Rights Under The Federal Fair Credit Reporting Act (FCRA)
The Fair Credit Reporting Act (FCRA) is designed to help ensure that CRAs (Consumer Reporting Agencies, including credit bureaus and credit reporting companies) furnish correct and complete information to businesses to use when evaluating your application for credit, or insurance, or to employers or prospective employers.
Your rights under the Fair Credit Reporting Act include:
- You have the right to receive a copy of your credit report. The copy of your report must contain all of the information in your file at the time of your request.
- If you contest the completeness or accuracy of information in your report, you may file a dispute with the CRA and with the company that furnished the information to the CRA. Genrally both the CRA and the furnisher of information are legally obligated to reinvestigate your dispute as long as it is not frivolous.
- CRA's must correct or remove inaccurate, incomplete or unverifiable information in their files. CRA's must remove obsolete information in their files.
- If you are a victim of identity theft or are on active duty with the militar, you have more rights under the FCRA.
- Only those with a permitted purpose or with your express permission may access your file.
- Generally employers must have your express written permision to obtain your report.
- Any company that denies your application, or takes an adverse action against you, based on information obtained from a CRA, must inform you of the adverse action and must supply you with the name and address of the CRA they used.
- You have the right to a free copy of your credit report in numerous instances including when your application for credit or employment is adversely affected because of information supplied by the CRA. You can get a free credit report each year in any case.
- You may opt-out of lists provided by the national credit bureaus that are based on your credit file.
- You may sue under the FCRA for violations of the Act.
- Credit scores are available to you on request from from mortgage credit agencies and sometimes from mortgage lenders. There may be a fee for the score.
Official FTC Summary of Rights: http://www.consumer.ftc.gov/articles/pdf-0096-fair-credit-reporting-act.pdf
Page authored by: Charles R. Burnett at CreditReporting.com
What is the Fair Credit Reporting Act in layman's terms? ›
The FCRA gives you the right to be told if information in your credit file is used against you to deny your application for credit, employment or insurance. The FCRA also gives you the right to request and access all the information a consumer reporting agency has about you (this is called "file disclosure").What does FCRA mean on a credit report? ›
The primary law is the Fair Credit Reporting Act (FCRA).What are the key FCRA requirements for consumer information? ›
The FCRA requires any prospective user of a consumer report, for example, a lender, insurer, landlord, or employer, among others, to have a legally permissible purpose to obtain a report. Legally Permissible Purposes.How do you use the Fair Credit Reporting Act? ›
Under the Fair Credit Reporting Act, you have a right to:
You must have proper identification. You have a right to a free copy of your credit report within 15 days of your request. Protected Access – The act limits access to your file to those with a valid need.
Common violations of the FCRA include:
Creditors give reporting agencies inaccurate financial information about you. Reporting agencies mixing up one person's information with another's because of similar (or same) name or social security number. Agencies fail to follow guidelines for handling disputes.
A few major laws that affect your credit life include: the Fair Credit Reporting Act, Fair Debt Collection Practices Act, Truth in Lending Act, and the Equal Credit Opportunity Act.What does FCRA protect against? ›
The Act (Title VI of the Consumer Credit Protection Act) protects information collected by consumer reporting agencies such as credit bureaus, medical information companies and tenant screening services. Information in a consumer report cannot be provided to anyone who does not have a purpose specified in the Act.What are the new FCRA rules? ›
The FCRA rule aims at prohibiting acceptance and utilization of foreign contribution or foreign hospitality for any activities detrimental to the national interest. FCRA Rules 2022 allows Indians to receive up to Rs 10 lakh in a year from relatives staying abroad without informing the authorities.What are the new credit reporting rules? ›
As of November 30, 2021, an amendment to Regulation F, which implements the FDCPA, says that a debt collector can't report a debt to the three major credit reporting agencies, Equifax, Experian, and TransUnion, before first contacting the consumer.What must be excluded from a consumer report? ›
Information excluded from consumer reports further include: Arrest records more than 7 years old. Items of adverse information, except criminal convictions older than 7 years. Negative credit data, civil judgments, paid tax liens, and/or collections accounts older than 7 years.
What rights do consumers have under FCRA? ›
• You have the right to know what is in your file.
report; • you are the victim of identity theft and place a fraud alert in your file; • your file contains inaccurate information as a result of fraud; • you are on public assistance; • you are unemployed but expect to apply for employment within 60 days.
Information about credit that you have, such as your credit card accounts, mortgages, car loans, and student loans. It may also include the terms of your credit, how much you owe your creditors, and your history of making payments.What is the Fair Credit Reporting Act and why is it important to the hiring process? ›
The Fair Credit Reporting Act, or FCRA, exists to protect employers and applicants. Specifically, the FCRA promotes accuracy, fairness, and privacy for the information contained in consumer reporting agency files. The FCRA is the national standard for employment background checks.Why Was Fair Credit Reporting Act created? ›
The Fair Credit Reporting Act (FCRA), Public Law No. 91-508, was enacted in 1970 to promote accuracy, fairness, and the privacy of personal information assembled by Credit Reporting Agencies (CRAs).Why do employers use Fair Credit Reporting Act? ›
The FCRA For “Employment Purposes”
The FCRA was enacted to protect consumers by promoting the accuracy, fairness, and privacy of information maintained by consumer reporting agencies. Anytime an employer requests a “consumer report” on an applicant or employee, obligations under the FCRA are triggered.
The Fair Credit Billing Act (FCBA) and Electronic Fund Transfer Act (EFTA) establish procedures for resolving mistakes on credit billing and electronic fund transfer account statements, including: Charges or electronic fund transfers that you - or anyone you have authorized to use your account - have not made.