Fair Credit Reporting Act
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The Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 ''et seq'', is
U.S. Federal Government The federal government of the United States (U.S. federal government or U.S. government) is the national government of the United States, a federal republic located primarily in North America, composed of 50 states, a city within a fed ...
legislation enacted to promote the accuracy, fairness, and privacy of consumer information contained in the files of consumer reporting agencies. It was intended to shield consumers from the willful and/or negligent inclusion of erroneous data in their
credit report :''This article deals with the general concept of the term credit history. For detailed information about the same topic in the United States, see Credit score in the United States.'' A credit history is a record of a borrower's responsible repa ...
s. To that end, the FCRA regulates the collection, dissemination, and use of consumer information, including
consumer credit Credit (from Latin verb ''credit'', meaning "one believes") is the trust which allows one party to provide money or resources to another party wherein the second party does not reimburse the first party immediately (thereby generating a debt ...
information. Together with the
Fair Debt Collection Practices Act The Fair Debt Collection Practices Act (FDCPA), Pub. L. 95-109; 91 Stat. 874, codified as –1692p, approved on September 20, 1977 (and as subsequently amended) is a consumer protection amendment, establishing legal protection from abusive deb ...
(FDCPA), the FCRA forms the foundation of consumer rights law in the United States. It was originally passed in 1970, and is enforced by the U.S. Federal Trade Commission, the Consumer Financial Protection Bureau and private litigants.


History

Before standardization of credit scoring, statements of character were integral to credit reports well into the 1960s. With credit reports containing probing details about personality, habits, and health, in the hearings on the Fair Credit Reporting Act lawmakers were troubled that individuals were helpless to clear up errors. The Fair Credit Reporting Act, as originally enacted, was title VI of , entitled ''An Act to amend the Federal Deposit Insurance Act to require insured banks to maintain certain records, to require that certain transactions in United States currency be reported to the Department of the Treasury, and for other purposes''. It was written as an amendment to add a title VI to the
Consumer Credit Protection Act The Consumer Credit Protection Act (CCPA) is a United States law , composed of several titles relating to consumer credit, mainly title I, the Truth in Lending Act, title II related to extortionate credit transactions, title III related to restrict ...
, . The Fair Credit Reporting Act was one of the first
data privacy Information privacy is the relationship between the collection and dissemination of data, technology, the public expectation of privacy, contextual information norms, and the legal and political issues surrounding them. It is also known as data pr ...
laws passed in the
Information Age The Information Age (also known as the Computer Age, Digital Age, Silicon Age, or New Media Age) is a historical period that began in the mid-20th century. It is characterized by a rapid shift from traditional industries, as established during ...
. The findings of the U.S. Congress that led to the Act and the Act's regulatory goals set the direction of information privacy in the U.S. and the world for the next sixty years. Among these innovations were the determination that there should be no secret databases to make decisions about a person's life, individuals should have a right to see and challenge the information held in such databases, and that information in such a database should expire after a reasonable amount of time.


Consumer reports

Commonly referred to as credit reports, a consumer report "contains information about your credit - and some bill repayment history - and the status of your credit accounts. This information includes how often you make your payments on time, how much credit you have, how much credit you have available, how much credit you are using, and whether a debt or bill collector is collecting on money you owe. Credit reports also can contain rental repayment information if you are a property renter. It also can contain public records such as liens, judgments, and bankruptcies that provide insight into your financial status and obligations."


Inaccuracies in consumer reports

A 2015 study released by the Federal Trade Commission found that 23% of consumers identified inaccurate information in their credit reports. Under the
Fair and Accurate Credit Transactions Act The Fair and Accurate Credit Transactions Act of 2003 (FACT Act or FACTA, ) is a United States federal law, passed by the United States Congress on November 22, 2003, and signed by President George W. Bush on December 4, 2003, as an amendment to ...
(FACTA), an amendment to the FCRA passed in 2003, consumers are able to receive a free copy of their consumer report from each credit reporting agency once a year. The free report can be requested by telephone, mail, or through the government-authorized website: annualcreditreport.com.


Civil liability

The FCRA regulates: # Consumer reporting agencies; # Users of consumer reports; and, # Furnishers of consumer information. If a consumer's rights under the FCRA are violated, they can recover: # Actual or statutory damages; # Attorney's fees; # Court costs; and, # Punitive damages if the violation was willful. "The threat of punitive damages under 1681n of the FCRA is the primary factor deterring erroneous reporting by the reporting industry." The statute of limitations requires consumers to file suit prior to the earlier of: two years after the violation is discovered; or, five years after the violation occurred. Consumer attorneys often take these cases on a contingency fee basis because the statute allows a consumer to recover attorney's fees from the offending party.


Users of consumer reports

Users of the information for
credit Credit (from Latin verb ''credit'', meaning "one believes") is the trust which allows one party to provide money or resources to another party wherein the second party does not reimburse the first party immediately (thereby generating a debt) ...
,
insurance Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to hedge ...
, or employment purposes (including
background check A background check is a process a person or company uses to verify that an individual is who they claim to be, and this provides an opportunity to check and confirm the validity of someone's criminal record, education, employment history, and oth ...
s) have the following responsibilities under the FCRA: # Users can only obtain consumer reports for permissible purposes under the FCRA; # Users must notify the consumer when an adverse action is taken on the basis of such reports; and, # Users must identify the company that provided the report, so that the accuracy and completeness of the report may be verified or contested by the consumer.


Employment background checks

Employers using consumer reports to screen job applicants or employees must follow specific procedures: # Get your written permission; # Tell you how they want to use your credit report; # Not misuse your information; # Give you a copy of your credit report if the employer decides not to hire or fires you; and, # Give you an opportunity to dispute the information contained within your credit report before making a final adverse decision.


Furnishers of information

A creditor, as defined by the FCRA, is a company that furnishes information to consumer reporting agencies. Typically, these are
creditors A creditor or lender is a party (e.g., person, organization, company, or government) that has a claim on the services of a second party. It is a person or institution to whom money is owed. The first party, in general, has provided some property ...
, with which a consumer has some sort of credit agreement (such as
credit card A credit card is a payment card issued to users (cardholders) to enable the cardholder to pay a merchant for goods and services based on the cardholder's accrued debt (i.e., promise to the card issuer to pay them for the amounts plus the o ...
companies,
auto Auto may refer to: * An automaton * An automobile * An autonomous car * An automatic transmission * An auto rickshaw * Short for automatic * Auto (art), a form of Portuguese dramatic play * ''Auto'' (film), 2007 Tamil comedy film * Auto (play), ...
finance companies and
mortgage bank Mortgage bank is a bank that specializes in originating and/or servicing mortgage loans. In the United States, a mortgage bank is a state-licensed banking entity that makes mortgage loans directly to consumers. The difference between a mortgage b ...
ing institutions). Other examples of information furnishers are collection agencies (third-party collectors), state or municipal
courts A court is any person or institution, often as a government institution, with the authority to adjudicate legal disputes between parties and carry out the administration of justice in civil, criminal, and administrative matters in accorda ...
reporting a
judgment Judgement (or US spelling judgment) is also known as ''adjudication'', which means the evaluation of evidence to make a decision. Judgement is also the ability to make considered decisions. The term has at least five distinct uses. Aristotle s ...
of some kind, past and present employers and bonders. Lenders have an important role to play in ensuring credit reports are accurate. Under the FCRA, creditors who furnish information about consumers to consumer reporting agencies must: # Provide complete and accurate information to the credit reporting agencies; # Investigate consumer disputes received from credit reporting agencies; # Correct, delete, or verify information within 30 days of receipt of a dispute; and, # Inform consumers about negative information which is in the process of or has already been placed on a consumer's credit report within one month. ''(This notice doesn't have to be sent as a separate notice, but may be placed on a consumer's monthly statement. If sent as part as the monthly statement, it needs to be conspicuous, but need not be in bold type. Required wording developed by the US Federal Treasury Department):'' Notice before negative information is reported: ''We may report information about your account to credit bureaus. Late payments, missed payments, or other defaults on your account may be reflected in your credit report.'' Notice after negative information is reported: ''We have told a credit bureau about a late payment, missed payment or other default on your account. This information may be reflected in your credit report.''


Consumer reporting agencies (CRAs)

Consumer reporting agencies (CRAs) are entities that collect and disseminate information about consumers to be used for credit evaluation and certain other purposes, including employment. Credit bureaus, a type of consumer reporting agency, hold a consumer's
credit report :''This article deals with the general concept of the term credit history. For detailed information about the same topic in the United States, see Credit score in the United States.'' A credit history is a record of a borrower's responsible repa ...
in their databases. CRAs have a number of responsibilities under FCRA, including the following: # CRAs must maintain reasonable procedures to ensure the maximum possible accuracy of the information contained within a consumer's report; # Provide a consumer with information about him or her in the agency's files and take steps to verify the accuracy of information disputed by a consumer; # If negative information is removed as a result of a consumer's dispute, it may not be reinserted without notifying the consumer in writing within five days; and, # Remove negative information seven years after the date of first delinquency (except for bankruptcies (10 years) and
tax liens A tax lien is a lien which is imposed upon a property by law in order to secure the payment of taxes. A tax lien may be imposed for the purpose of collecting delinquent taxes which are owed on real property or personal property, or it may be ...
(seven years from the time they are paid). The three big CRAs— Experian,
TransUnion TransUnion is an American consumer credit reporting agency. TransUnion collects and aggregates information on over one billion individual consumers in over thirty countries including "200 million files profiling nearly every credit-active consume ...
, and Equifax—do not interact with information furnishers directly as a result of consumer disputes. They use a system called E-Oscar. In some areas of the country, however, there are other credit bureaus.


Nationwide specialty consumer reporting agencies

In addition to the three big CRAs, the FCRA also classifies dozens of other information technology companies as "nationwide specialty consumer reporting agencies" that produce individual consumer reports used to make credit determinations. Under Section 603 of the Fair Credit Reporting Act, the term " nationwide specialty consumer reporting agency" means a consumer reporting agency that compiles and maintains files on consumers on a nationwide basis relating to: # Medical records or payments; # Residential or tenant history; # Check writing history; # Employment history; or, # Insurance claims. Because these nationwide specialty consumer reporting agencies sell consumer credit report files, they are required to provide annual disclosures of their report files to any consumer who requests disclosure. A partial list of companies classified as nationwide specialty consumer reporting agencies under FCRA includes: Telecheck,
ChoicePoint LexisNexis Risk Solutions is a global data and analytics company that provides data and technology services, analytics, predictive insights and fraud prevention for a wide range of industries. It is headquartered in Alpharetta, Georgia (part of ...
,
Acxiom Acxiom (pronounced "ax-ee-um") is a Conway, Arkansas-based database marketing company. The company collects, analyzes and sells customer and business information used for targeted advertising campaigns. The company was formed in 2018 when Acxi ...
, Integrated Screening Partners,
Innovis Innovis is the credit reporting division of CBC Companies and is considered the fourth largest consumer credit reporting agency in the United States, behind the “big three” Experian, TransUnion, and Equifax. Based in Columbus, Ohio, the co ...
, the
Insurance Services Office Insurance Services Office, Inc. (ISO), a subsidiary of Verisk Analytics, is a provider of statistical, actuarial, underwriting, and claims information and analytics; compliance and fraud identification tools; policy language; information abo ...
,
Tenant Data Services Tenant may refer to: Real estate *Tenant, the holder of a leasehold estate in real estate *Tenant-in-chief, in feudal land law *Tenement (law), the holder of a legal interest in real estate *Tenant farmer *Anchor tenant, one of the larger stores ...
,
LexisNexis LexisNexis is a part of the RELX corporation that sells data analytics products and various databases that are accessed through online portals, including portals for computer-assisted legal research (CALR), newspaper search, and consumer info ...
, Retail Equation,
Central Credit Central is an adjective usually referring to being in the center of some place or (mathematical) object. Central may also refer to: Directions and generalised locations * Central Africa, a region in the centre of Africa continent, also known as ...
, Teletrack, the
MIB Group MIB Group, Inc. or MIB (formerly the Medical Information Bureau) is a membership corporation owned by approximately 430 member insurance companies in the United States and Canada. Formed in 1902 and based in Braintree, Massachusetts, MIB provide ...
, United Health Group (Ingenix Division), and
Milliman Milliman, formerly Milliman & Robertson, is an international actuarial and consulting firm based in Seattle, Washington. The company was founded in 1947, by Wendell Milliman and Stuart A. Robertson and operates 59 offices internationally, wi ...
. Although the major CRAs Experian, Equifax, and
TransUnion TransUnion is an American consumer credit reporting agency. TransUnion collects and aggregates information on over one billion individual consumers in over thirty countries including "200 million files profiling nearly every credit-active consume ...
are required by law to provide a central source website for consumers to request their reports, the nationwide specialty consumer reporting agencies are not required to provide a centralized online source for disclosure. The FCRA Section 612 merely requires nationwide specialty consumer reporting agencies to establish a streamlined process for consumers to request consumer reports, which shall include, at a minimum, the establishment by each such agency of a
toll-free telephone number A toll-free telephone number or freephone number is a telephone number that is billed for all arriving calls. For the calling party, a call to a toll-free number from a landline is free of charge. A toll-free number is identified by a dialing pre ...
for such consumer disclosure requests.


See also

* Annualcreditreport.com *
Adverse Credit History :''This article deals with the general concept of the term credit history. For detailed information about the same topic in the United States, see Credit score in the United States.'' A credit history is a record of a borrower's responsible repay ...
*
Background check A background check is a process a person or company uses to verify that an individual is who they claim to be, and this provides an opportunity to check and confirm the validity of someone's criminal record, education, employment history, and oth ...
*
Credit card A credit card is a payment card issued to users (cardholders) to enable the cardholder to pay a merchant for goods and services based on the cardholder's accrued debt (i.e., promise to the card issuer to pay them for the amounts plus the o ...
*
Credit history :''This article deals with the general concept of the term credit history. For detailed information about the same topic in the United States, see Credit score in the United States.'' A credit history is a record of a borrower's responsible repay ...
*
Credit rating agency A credit rating agency (CRA, also called a ratings service) is a company that assigns credit ratings, which rate a debtor's ability to pay back debt by making timely principal and interest payments and the likelihood of Default (finance), default ...
* Credit score *
Fair and Accurate Credit Transactions Act The Fair and Accurate Credit Transactions Act of 2003 (FACT Act or FACTA, ) is a United States federal law, passed by the United States Congress on November 22, 2003, and signed by President George W. Bush on December 4, 2003, as an amendment to ...
*
Fair Credit Billing Act The Fair Credit Billing Act (FCBA) is a United States federal law enacted in 1974 as an amendment to the Truth in Lending Act (codified at et seq.). Its purpose is to protect consumers from unfair billing practices and to provide a mechanism for a ...
*
Identity theft Identity theft occurs when someone uses another person's personal identifying information, like their name, identifying number, or credit card number, without their permission, to commit fraud or other crimes. The term ''identity theft'' was c ...
*
Identity Theft Resource Center The Identity Theft Resource Center (ITRC) is a United States non-profit organization that provides identity crime victim assistance and education, free of charge, through a toll-free call center, live chat, website, podcasts, and social media. The ...
*
Tenant Screening "'Tenant screening'" is used primarily by residential landlords and property managers to evaluate prospective tenants. The purpose is to assess the likelihood the tenant will fulfill the terms of the lease or rental agreement and will also take gre ...
*
Financial privacy laws in the United States Financial privacy laws regulate the manner in which financial institutions handle the nonpublic financial information of consumers. In the United States, financial privacy is regulated through laws enacted at the federal and state level. Federal re ...


References


External links


As codified in 15 U.S.C. chapter 41 subchapter III
of the United States Code from the LII
As codified in 15 U.S.C. chapter 41 subchapter III
of the United States Code from the
US House of Representatives The United States House of Representatives, often referred to as the House of Representatives, the U.S. House, or simply the House, is the lower chamber of the United States Congress, with the Senate being the upper chamber. Together they ...

Consumer Credit Protection Act
(FCRA is title VI
PDFdetails
as amended in the
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br>Statute Compilations collection

FTC advisory opinions
*


MyMoney.gov
from the US
Financial Literacy and Education Commission The Financial Literacy and Education Commission (the Commission) was established under Title V, the Financial Literacy and Education Improvement Act which was part of the Fair and Accurate Credit Transactions Act (FACT) Act of 2003, to improve fina ...
* Consumer Financial Protection Bureau (CFPB) maintains
consumer reporting company list
current as of January 2020 * The Fair Credit Reporting Act (FCRA) and the Privacy of Your Credit Report Electronic Privacy Information Center (EPIC) * Consumer attorney's testimony testifying as to how credit report disputes are actually normally handled, in violation of the Act. {{Authority control United States federal banking legislation Credit