What is FCRA?
The Fair Credit Reporting Act (FCRA) oversees how credit information is handled by credit reporting agencies. The act protects the privacy of your credit information, ensuring that your information is correct and kept private. Furthermore, the FCRA makes it possible for you to access your information, correct inaccuracies, and pursue your legal rights to violations of your credit rights.
What is FCRA?
On its most basic level, the Fair Credit Reporting Act protects people from having their information misused. This act has many provisions to protect you. Let’s look at some specific areas that the FCRA provides.
1. Request your Credit File
The act obligates consumer reporting agencies to provide your file information to you upon request with the appropriate identification.
2. Information Access Limitation
Your information is protected from companies who don’t have a good reason to request your information. Permissible purposes for information access may include loan application or new employment.
3. Consent for Giving Information to an Employer
Before an employer can request your credit information from a consumer reporting agency, they must receive written permission from you. Otherwise, your credit information should not be shared with your employer.
4. Check Incorrect Information
When your file holds incorrect information, you can tell the consumer reporting information that it’s wrong. They must immediately investigate the situation. If not resolved, you can add a statement to your credit file to explain the situation.
5. Fix Inaccurate Information
When information is no longer accurate, the consumer reporting agency must update or delete the information from your credit file. However, the agency does not need to remove information if it is accurate.
6. Outdated Information Deletion
Old information that is older than 7 years should be removed from your information. Bankruptcies can only be removed after 10 years have passed.
7. Remove Name from Marketing Lists
By law, consumer reporting agencies can give your information to creditors or insurers so they can contact you based on you meeting certain requirements. If you don’t want to be a part of that list, you can request that your name be removed from those lists.
8. Credit Score Request
You can request your credit score. Some places require you to pay a certain amount to receive your credit score. You also may be able to receive your credit score during a mortgage transaction without extra charge.
9. Avoid Fraud
The FCRA provides a way for people to protect their credit information from fraud by placing fraud alerts or “active duty” alerts for military personnel on accounts.
10. Recover from Identity Theft
When you become the victim of identity theft, the FCRA provides certain right to help you recover from the situation.
What is a Consumer Reporting Agency (CRA)?
A consumer reporting agency collects and uses your credit information to help landlords or employers make educated credit decisions about you. Common credit bureaus include Transunion, Equifax, or Experian.
What is an Information Supplier?
An information supplier refers to the company, person, or group that gives your credit information to a consumer reporting agency. Often, this means your creditor. But a CRA can also be a third party that has a loose credit relationship with you.
Information Supplier Can and Cannot Do
- Should not report inaccurate information
- Update and correct information
- Required to inform you about negative credit information
- Notify CRA when you close an account
- Respond to identity theft notices
Credit Information Users
Anyone who uses your credit information falls under the jurisdiction of the FCRA. The credit information can be used for employment, insurance, or credit. Credit information users should tell you if they did not hire you due to your credit report. They also must share who provided the report.
When the Fair Credit Reporting Act is violated by a consumer reporting agency, an information supplier, or user, you may be able to sue. In some situations, you can recover the money you lost by the mistake that one of these groups made.