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The 7 most common FCRA violations are withholding notices, privacy violations, requesting report for impermissible purposes, failure to follow proper debt disclosure procedures, furnishing and reporting inaccurate information, furnishing and reporting old information, and mixing files.
As a consumer, it’s important to keep yourself informed of when the Fair Credit Reporting Act (FCRA) has been violated so you can take action and protect your hard-earned credit.
The FCRA was enacted in 1970 by the U.S. Congress to promote accuracy, transparency and privacy when it comes to how your personal credit information is distributed by credit reporting agencies, or CRAs. CRAs include both credit bureaus and consumer reporting agencies, including well-known ones like Equifax and Transunion.
As noble as the mission of the FCRA may have been, it cannot protect consumers from occasional violations of their rights.
7 common violations explained
Here are the seven most common Fair Credit Reporting Act violations, along with tips on how to remedy these violations once they’ve been identified.
1. Withholding notices
As a consumer, you’re entitled to know how your credit information is reported, handled and used by a credit bureau. The bureau may be withholding notice if you’re not informed of how they’re using your information.
Withheld notices include creditor refusal to notify you of your right to dispute inaccurate credit information, creditor failure to provide you with your credit information when it’s used to make a credit decision or creditor refusal to notify you when negative credit information (like repeated late payments) is supplied to CRAs.
It’s important to ensure you’re checking your credit report so you can find and report inaccuracies or FCRA violations. You’re entitled to request one report per year from each of the three major credit reporting agencies.
Bottom line: Credit bureaus not letting you know how your credit information is being used is a violation the FCRA.
2. Privacy violations
A credit bureau cannot hand over your credit information to anyone who requests it. Your information should only be shared with authorized people or entities that have demonstrated a valid need for your credit information.
People or entities that would have a need for your credit information include landlords, to see if you have a pattern of making payments on time; credit card companies and lenders, to determine if you’re a responsible borrower; and insurers, to make sure that you are able to make responsible financial decisions.
People or companies that would not have a need for your credit information include a university you’ve recently applied to, the manager of a job you applied for or a client you’ve entered a business partnership with.
If a credit bureau is found to have shared your information with an unauthorized person or party, then they violated your protected privacy under the FCRA, and you would be entitled to damages.
Bottom line: Only certain parties are entitled to your credit information, and CRAs who provide that information to unauthorized parties violate your right to privacy under the FCRA.
3. Requesting a credit report for an impermissible purpose
Though certain people and entities are entitled to request credit information from a bureau, they must have a “permissible purpose” for doing so—for example, a landlord wants to check your credit background to ensure you would be a reliable tenant and make payments on time.
A credit bureau may violate the FCRA if they supply your credit information to someone for an impermissible purpose. Impermissible purposes would include an employer who pulls your credit information without written permission or a creditor that pulls your report to check on your current financial status for no provided reason (such as a recent application for a new credit card).
Bottom line: Those that ask for your credit information need a valid reason for doing so, and CRAs that don’t ensure their reason is valid violate the FCRA.
4. Failing to follow proper debt dispute procedures
When you submit a dispute regarding the accuracy of an item on your credit report (such as a bankruptcy being listed when you had none), credit reporting agencies must respond in certain ways.
That includes conducting a reasonable investigation of your dispute, modifying and correcting any found inaccurate information and removing the disputed item from your credit report within 30 to 45 days after receiving notice.
Sometimes a credit bureau can neglect any or all of these responsibilities, meaning they’ve violated proper debt dispute procedures.
Bottom line: CRAs need to respond to filed disputes in certain ways, and not following those procedures could violate the FCRA.
5. Furnishing and reporting inaccurate information
A creditor, much like your credit card company or loan collector, should not be knowingly supplying incorrect information to a CRA.
Some examples of inaccurate information that could be supplied to your CRA include overstating or misstating total balances due, reporting a debt that has been paid off as a charge off, reporting payments paid on time as late or mistakenly listing you as a debtor on an account.
Bottom line: Creditors should not give information they know (or should know) is untrue or inaccurate to CRAs.
6. Furnishing and reporting old information
It’s up to CRAs and creditors to keep your credit information current, since all of your previous credit information doesn’t follow you around forever. If you find the information in your credit report is not updated after a change in your credit (like an account being closed), this could be in violation of the FCRA.
Examples of this kind of FCRA violation include reporting information older than seven to 10 years old, failing to report debt as being discharged in bankruptcy, reporting old debts as current and reporting a closed account as being still active.
Bottom line: Creditors or CRAs failing to update your credit information (which should be kept as up-to-date as possible) violate the FCRA.
7. Mixing files
In some instances, a credit bureau can mistakenly “mix” your file with that of another debtor with information similar to yours, like a shared last name. This violates the credit bureau’s obligation to report accurate credit information about every borrower.
Mixed file violations include combining credit information of people with similar names living in the same area, such as if there are two people named “John Smith” who live in the same zip code, or not including “Jr.,” “Sr.,” “II” or other differences for people with similar surnames.
Bottom line: It’s possible for CRAs to mistakenly “mix” credit information of two people with similar information, which violates the FCRA if not remedied.
What are your rights under the Fair Credit Reporting Act?
Every consumer in the U.S. has certain protected rights under the FCRA. Below, you’ll find a summary of what these rights include.
The right to be told if information in your credit file is used against you
Any person or entity who uses your credit information (such as your credit report) to deny an application for credit, employment or insurance or take another form of adverse action against you needs to inform you.
They must provide you with how they used your credit information to arrive at their decision, then provide you with the name, address and telephone number of the agency that provided them the information.
Real-world example: Beth applies for a new credit card and is denied based on previous late payments reported by TransUnion on her credit report. Along with stating their decision to not approve her application, the credit card company that denied Beth must tell her that they used TransUnion information to arrive at their decision, then provide her with their address and phone number.
The right to ask for a credit score
Credit scores are representations of a person’s creditworthiness based on their credit history and relevant information in their credit report. All consumers can request their credit score from various credit score providers, including the three main CRAs, but depending on the provider, this request may cost a fee.
Real-world example: Nora and her husband are applying for a mortgage and want to see what their chances of getting approved are. They contact Experian to see their credit scores and see what factors may work for and against them while their application is being evaluated.
The right to know what information is in your file
All consumers can request and receive all the information credit reporting agencies have in their file under certain circumstances (otherwise known as a “file disclosure,” which is usually free). Before obtaining your information, you will be required to provide proper identification, like your Social Security number.
You’re entitled to a free file disclosure if you are:
- On public assistance
- The victim of identity theft with a fraud alert on your file
- Unemployed, but expect to apply for unemployment within the next 60 days
- Aware of inaccurate information in your file as a result of fraud
- Experiencing adverse actions against you due to inaccurate or incomplete information in your credit report
Real-world example: Charlie was recently denied a loan application due to several recent credit card applications within the past month. Charlie didn’t apply for those credit cards, so he requests a copy of his file as a suspected victim of identity theft.
The right to obtain a security freeze
A security freeze prohibits CRAs from releasing your credit file or information found within your credit report without your authorization. This is designed to prevent fraud from occurring by limiting new lines of credit, loans or other services in your name from being approved without your consent.
This may delay or even prohibit approval of applications for lines of credit you may have sent out, so you also have the option to place an initial or an extended fraud alert on your credit file at no cost to you.
An initial fraud alert lasts for one year and requires additional steps to verify your identity before new lines of credit are approved. If you are a victim of fraud within that year, you are entitled to request an extended alert, which lasts for seven years.
Real-world example: Charlie is worried about his account security after several credit card applications are made in his name, so he requests a security freeze on his information to prevent further fraud from occurring. Charlie is able to deny the fraudster when they apply for another new credit card and are asked for verification.
The right to dispute inaccurate/incomplete information
Any inaccurate or incomplete information found in your credit file that is reported to a CRA must be thoroughly investigated by the agency.
Real-world example: Lisa finds that a credit card she recently paid off and closed still carries a balance on her Equifax report. She reports this to Equifax so they can investigate and rectify the situation.
The right to an accurate, complete and verifiable credit report
Once the CRA has investigated the report and made a decision, they must remove or correct any information they found to be inaccurate, incomplete or unverifiable within 30 days of arriving at their decision. However, CRAs may continue reporting information they have confirmed to be accurate.
Real-world example: Equifax investigates Lisa’s report and determines that the credit card was indeed paid off in full and the account was closed, so they must correct the information. This includes updating her report to reflect this information within 30 days.
The right to an up-to-date credit report
Generally, CRAs aren’t permitted to report most negative items that are more than seven years old, or bankruptcies that are more than 10 years old.
Real-world example: It has been seven years since Sean had a particular bill go to collections, so the CRAs must remove it from his report.
The right to limit unsolicited offers based on information in your credit report
Credit card or insurance companies can send out unsolicited offers for “prescreened” lines of credit. These offers must include a toll-free number that consumers can call to remove their names and addresses from the mailing lists these offers use.
You can also call 1-888-5-OPTOUT (1-888-567-8688) to opt out with the three major U.S. credit bureaus.
Real-world example: Kelsey has gotten several offers for “prescreened” credit cards since her credit score went up that she didn’t sign up for or consent to. She doesn’t want to receive these offers, so she finds the opt-out number on the offer to remove her name and address from their mailing list.
The right to limit access to your credit file
CRAs can provide your credit information to people or entities with a demonstrated, verifiable need to have the information to make a decision. For the most part, this includes landlords, creditors, insurers and occasionally employers who are considering your application.
Real-world example: Erin applies for her first credit card, so the credit card company has the right to request her credit file to see what her past credit history looks like.
The right to require consent for employers to view your reports
CRAs cannot give access to your credit file to employers (either current or prospective) without you giving written permission to the employer.
Real-world example: Max applies for a new job, and his employer wants to see what his credit history looks like. They cannot access his credit file unless Max provides written permission for them to do so.
The right to seek damages from violators
If a CRA, user of consumer reports or furnisher of information to a CRA is found to have violated your FCRA-protected rights, you have the right to sue in state or federal court.
Real-world example: Micaela finds that Experian didn’t correct an error she reported to them within 30 days, and was denied a loan application because of it. She’s able to sue them for damages in court.
How to remedy a Fair Credit Reporting Act violation
Once you’ve identified that the Fair Credit Reporting Act has been violated by a CRA or another credit entity, you’re able to sue that entity in court for one of two types of damages: willful or negligent violation.
Suing for damages for a willful violation
A willful violation means you can prove that the CRA or credit entity acted recklessly with your information and didn’t respect their obligations, both to the FCRA and your protected rights under the FCRA.
This doesn’t mean you and your attorney have to prove beyond a reasonable doubt that the entity intentionally violated your rights—just that they did so in the first place, and that they should have known to not do so.
If you can prove this in court, you may be able to recover the following damages.
- Basic damages:
- Provable damages with no set limit, or
- Statutory damages between $100 and $1,000
- Punitive damages as decided by the court
- Attorney fees and costs
- Damages from an individual violator who lied or used your credit report for an improper purpose:
- Provable damages with no set limit, or
- $1,000 flat
- Punitive damages as decided by the court
- Attorney fees and costs
Suing for damages for a negligent violation
A negligent violation means the CRA or credit entity violated your rights under the FCRA without knowing they did so, or without meaning to.
If you’ve identified and proven negligent violations when it comes to your credit, you may be entitled to the following damages:
- Actual damages with no set limit or minimum
- Attorney fees and costs
Before you call your lawyer, you should be aware that there is a penalty for an unnecessary, or “frivolous,” FCRA lawsuit that can come with a hefty fine—you’ll need to pay the other party’s attorney fees if it’s found your suit was filed in bad faith or for purposes of harassment.
For support with other credit matters, like disputing inaccurate information on your credit report, get in touch with one of Lexington Law Firm’s trusted credit attorneys that fight for your right to an accurate credit report.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
