What is the Fair Credit Reporting Act?

The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.

The FCRA was originally passed by Congress in 1970 to ensure the accuracy and privacy of personal information filed by credit agencies in consumer credit reports and has been amended several times since.

Prior to 1970, consumers did not have the right to know what information was listed on their credit reports. There was no way to order a copy of your reports and no way to see if the information was accurate or not.

Even worse, if you somehow learned that there were items on your credit reports that were inaccurate, there was no way of challenging or getting rid of those items with the credit bureaus. Because there were no limits on how long listings could remain on your credit reports, erroneous listings could haunt you forever.

A credit reporting agency (CRA), also known as a consumer reporting agency or credit bureau, is defined by the FCRA as a company that collects personal information about consumers for the purpose of selling it to third parties, such as lenders, insurance companies or other businesses that require credit reports to assess consumers before doing business with them.

While there are plenty of companies that identify as a CRA, there are three major credit bureaus in the United States: Equifax, Experian and TransUnion. All CRAs and credit bureaus must adhere to the FCRA’s credit reporting rules so that consumer rights are protected.

All credit bureaus, banks and credit card companies operate as private businesses, meaning they are not regulated by the government. The Consumer Financial Protection Bureau (CFPB) and the FCRA were put in place to help protect consumer rights by regulating the accuracy, fairness and privacy of credit information.

According to the FCRA, you have the right to access your credit reports, challenge incorrect or incomplete information, limit who can access your reports, seek damages from violators, be told if your credit report is used against you and more. Individual states may have additional consumer reporting laws beyond FCRA provisions.

The FCRA grants you certain rights and protections from CRAs. Under the FCRA, CRAs are obligated to:

• Grant you free access to your credit report
• Limit other companies’ access to your credit report
• Control how long items can stay on your report
• Give you the right to dispute items listed on your credit report

A credit report contains any and all information the CRA has on file about you. Upon receiving proper identification, credit agencies must provide you with your report within 15 days. The FCRA allows consumers one copy annually of each of their credit reports from TransUnion, Equifax and Experian. You can head to annualcreditreport.com to access these reports every year.

In addition to the annual copies you’re entitled to, you may also access your report for any of the following reasons:

• A business denies you an application due to your credit report.
• You are unemployed and actively seeking employment.
• You are on welfare.
• You are a victim of identity theft.

Under these rules, the FCRA guarantees that you can gain access to these important credit details without having to spend a huge amount of money to do so.

Does the FCRA let me access my credit score?

Your credit score—the three-digit score that summarizes your credit reports and determines your eligibility and reliability as a borrower—is not included on the free annual credit reports guaranteed by the FCRA. However, you can choose to access your credit score, either through free credit monitoring services or by paying for one through websites like myfico.com.

One vital aspect of the FCRA is that it regulates and controls who has a permissible purpose to acquire your report, such as when you're applying for new credit or a new job. An inquiry, put simply, is the notation made in a credit file when a potential creditor, employer or insurer sneaks a peek at it. Successful small claims court lawsuits have been brought by consumers against those who access credit files without a permissible purpose.

In basic terms, a company or organization must have a very good reason to see your credit report in the first place. For instance, if you’ve completed an application for a line of credit, the lender has a permissible purpose to view your credit report.

In certain scenarios, organizations can request to see your report, but they require your written permission to do so. This would be the case if you applied for a job and your employer wanted to see your credit report as a form of character reference. You’re able to give them permission to access your credit report, but the employer cannot look up the information at will.

The FCRA has strict guidelines for what goes on your report and how long it stays there. It simply wouldn’t be fair if items were permanently kept on your record or if a lending decision when you’re 40 should somehow be determined by a bad decision you made when you were 18.

The FCRA states that the running reporting periods for most information on credit reports is generally seven years. The exception is some bankruptcies, which may remain for up to 10 years.

Keep in mind that these are maximum limits. The FCRA does not stipulate a minimum amount of time something must remain on a consumer’s credit file. In this respect, the FCRA exists to protect you against something remaining on your credit report forever, but no law requires that private companies tattletale on you for any minimum length of time at all.

To this end, it’s worth remembering that credit reports are not official government documents and credit bureaus are not officially sanctioned agencies. The fact that the record must be wiped after a certain amount of time is good news, but it also means that it's in your best interest to keep working on positive credit.

The details of how a credit bureau must handle consumer complaints are complicated, and laid out in the full documentation of the act, but here is a very simple version: when a consumer disputes a credit file item, the bureau must note within the file that the item is disputed and begin an investigation. The investigation must be completed within a reasonable amount of time of about 30 days.

After the investigation, the bureau must inform the consumer of the action that was taken. These actions include:

• Verified: The item remains as is.
• Modified: Certain aspects of the tradeline have been revised.
• Deleted: The item is removed from the file.
• Deemed frivolous: The agency will not investigate the item further.

If you feel the action is unjust and violates the FCRA, you have the right to take legal action. The process of any such legal case may be long and drawn out and, in some cases, may not even be worth it, but thankfully the threat of this is usually enough to stop companies from violating the laws, offering you a good amount of protection.

Can medical issues be included on your report?

The FCRA states that any medical information must not be included in your credit report. The fact that you may be unwell should not be considered, and creditors are legally prohibited from taking this information into account when making a decision on whether or not to lend or how much they are able to lend. This could easily lead to some form of discrimination, which is one of the many things the FCRA has been put in place to avoid.

In one study of 6,000 people, it was estimated that 34 percent had at least one error on one of their credit reports. That's not a good sign for consumers.

Fortunately, Lexington Law Firm has the tools and strategies to help you work to fix your credit reports. Our team of lawyers and paralegals helps you review your credit reports from the three major credit bureaus, gather the necessary information to identify any errors and communicate with your creditors and the credit bureaus to challenge inaccurate credit listings.

Each credit report strategy is case-specific. Many of our clients receive a monthly personalized credit score improvement analysis with action plans to help improve their credit. When you work with Lexington Law Firm, you can monitor your case online or with our mobile app.

The Fair Credit Reporting Act gives you the right to repair your credit, but it doesn’t do the job for you. If there are questionable negative items on your credit reports and you do nothing about them, odds are they will remain on your report. Only by pursuing your FCRA rights, or by enlisting a trustworthy credit repair service, can you ensure that your credit reports are a fair and accurate representation of your creditworthiness.

Lexington Law leverages your rights as established by the FCRA and other federal laws. Lexington Law’s credit repair services have helped clients see the removal of millions of questionable negative items from their credit reports including late payments, collections, charge-offs and bankruptcies.

Sign up at Lexington Law today to learn more about your credit.

Reviewed by Vincent R. Mayr, Supervising Attorney of Bankruptcies at Lexington Law. Written by Lexington Law.

Vince has considerable expertise in the field of bankruptcy law. He has represented clients in more than 3,000 bankruptcy matters under chapters 7, 11, 12, and 13 of the U.S. Bankruptcy Code. Vince earned his Bachelor of Science Degree in Government from the University of Maryland. His Masters of Public Administration degree was earned from Golden Gate University School of Public Administration. His Juris Doctor was earned at Golden Gate University School of Law, San Francisco, California. Vince is licensed to practice law in Arizona, Nevada, and Colorado. He is located in the Phoenix office.

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.