Understanding the Fair Credit Reporting Act (FCRA)

The Fair Credit Reporting Act (FCRA), codified at 15 U.S.C. §1681 et seq., is a federal law that regulates how consumer credit information is collected, shared, and used.

The FCRA establishes requirements for consumer reporting agencies (commonly called credit bureaus) and provides consumers with specific rights related to their credit reports and the accuracy of reported information.

The purpose of the FCRA is to promote fairness, accuracy, and privacy in consumer credit reporting.

The three major nationwide consumer reporting agencies in the United States are:

• Equifax
• Experian
• TransUnion

These agencies collect information from creditors, lenders, and other data furnishers to compile credit reports. These reports may be used by lenders, employers, landlords, insurers, and others, subject to permissible purpose requirements under the law.

Consumers have the right to obtain a copy of their credit report. Under federal law, you are entitled to one free credit report from each nationwide credit bureau every 12 months through AnnualCreditReport.com.

Additional free reports may be available under certain circumstances.

If you believe information in your credit report is inaccurate or incomplete, you have the right to dispute that information with the credit bureau.

Once a dispute is submitted, the credit bureau is required to investigate the disputed information, generally within 30 days (or up to 45 days in some situations).

You have the right to see a list of entities that have accessed your credit report within a specified period, typically:

• The past 12 months for credit-related inquiries
• The past 24 months for employment-related inquiries

The FCRA requires credit bureaus to follow reasonable procedures designed to ensure the maximum possible accuracy of the information contained in consumer credit reports.

When you dispute information with a credit bureau, the process generally includes the following steps:

• You submit a dispute identifying the specific information you believe is inaccurate or incomplete
• The credit bureau reviews the dispute and initiates an investigation
• The bureau forwards the dispute to the furnisher (the entity that reported the information)
• The furnisher investigates and reports its findings back to the bureau
• The credit bureau provides you with the results of the investigation
• If information is found to be inaccurate, it must be corrected or deleted

The FCRA establishes timelines and procedures for this process but does not guarantee a specific outcome.