As a consumer, it's important to understand how information contained in your credit report can affect your ability to borrow money, secure a place to live or even find a job. The Federal Fair Credit Reporting Act (15 USC 1681 et seq.) is designed to ensure both the accuracy and privacy of your credit information and outlines your rights with regards to your credit report.
History
The Fair Credit Reporting Act (FCRA) was originally enacted in 1970 by the Federal Trade Commission as a means of regulating the activities of consumer credit reporting agencies. The Act pertains to the three major credit reporting bureaus, Equifax, Experian and TransUnion, as well as other agencies that compile consumer information for third-party use, for example, companies that perform employer background checks. The FCRA has been amended several times, with the most recent changes taking place in 2003.
Creditor Responsibilities
Under the FCRA, if a creditor denies your application for credit, they are required to inform you in writing and provide you with the name, telephone number and address of the agency that furnished your credit information. Creditors must also provide complete and accurate information to the credit bureaus regarding your accounts and thoroughly investigate any disputes or inaccurate information. They also have a responsibility to inform you within thirty days of placing negative information on your credit report.
Consumer Rights
Your most important right under the FCRA is to know exactly what's in your credit file and you are entitled to receive a free copy of your credit report from each of the three credit reporting bureaus annually. Additionally, you may receive a free copy of your credit report if you are denied credit, are the victim of identity theft, are on public assistance or are temporarily unemployed. You also have the right to dispute any inaccurate information on your credit report and you must give consent to employers before they can access your credit history. You also have the right to opt-out of pre-screened offers for credit.
Reporting Agency Responsibilities
The FCRA provides that credit reporting agencies must delete any information from your credit report if it's been determined to be inaccurate, incomplete or is otherwise unable to be verified as correct. This also applies to outdated information and credit reporting agencies must remove negative information from your report that is more than seven years old or in the case of bankruptcy, ten years old. Credit reporting agencies are also prohibited from providing your credit information to anyone who is unable to demonstrate a valid need, such as pre-employment screening or a lease application.
Violations
The FCRA also provides you with a means of recourse if you feel your rights have been violated. Section 616 of the Act allows you to seek damages for any willful noncompliance on the part of a credit reporting agency. You may receive actual damages or any amount ranging from $100 to $1,000 as well as punitive damages and attorney's fees. Section 617 provides for the recovery of actual damages for negligent violations as well as attorney's fees.
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