Understanding Your Credit Report and the FCRA

LaToya Irby is a credit expert who has been covering credit and debt management for The Balance for more than a dozen years. She's been quoted in USA Today, The Chicago Tribune, and the Associated Press, and her work has been cited in several books.

Thomas J Catalano is a CFP and Registered Investment Adviser with the state of South Carolina, where he launched his own financial advisory firm in 2018. Thomas' experience gives him expertise in a variety of areas including investments, retirement, insurance, and financial planning.

The Fair Credit Reporting Act (FCRA) is a federal law that details how consumer credit information can be collected and used. Under the FCRA, a consumer has a right to view the information in their credit file and to dispute inaccurate information.

As a consumer, you should be aware of your rights to avoid being taken advantage of by companies in the credit reporting industry.

FCRA Rules for Consumer Reporting Agencies

According to the FCRA, consumer reporting agencies are companies that collect credit information about consumers for the purpose of selling it to third parties. The best-known examples of consumer reporting agencies are the three major credit bureaus: Equifax, Experian, and TransUnion.

Note

The big three credit bureaus aren't the only consumer reporting agencies in the U.S. The Consumer Financial Protection Bureau publishes a list of almost 50 different companies that self-identify as consumer reporting agencies. The FCRA rules apply to those agencies as well.

Under the FCRA, credit bureaus and other consumer reporting agencies are required to follow strict procedures.

Provide You With a Copy of Your Credit File at Your Request

You'll have to provide personal identifying information so the credit bureau can confirm you're the person requesting your credit report. There are certain times the credit bureaus have to provide you a free copy of your credit report:

• Once annually, through the centralized website annualcreditreport.com.
• If a business has taken adverse action (denied your application or charged a higher. interest rate) because of information in your credit report.
• If you are unemployed and planning to look for a job within the next 60 days.
• If you are on welfare.
• If you have been a victim of identity theft.
• If your credit report contains inaccurate information resulting from identity theft.

Note

In response to the COVID-19 pandemic, all three of the major reporting agencies are offering free weekly online reports through April 2022.

Investigate Information You Dispute

The only times the agency may not investigate is if you do not provide enough information to investigate your dispute, you dispute everything on your credit report, or you re-dispute an item without offering additional information regarding your dispute.

Correct or Delete Information

Agencies are required to correct or delete inaccurate information within 30 days of your dispute, or up to 45 days if you send additional information after submitting your written dispute.

Additionally, they should delete outdated (negative) information that is seven to 10 years old, depending on the type of information.

Limit or Grant Access to Your Information

Agencies should limit access to your file to those businesses that have a permissible purpose for viewing your credit report.

Note

The FCRA is specific about when businesses can access your credit report. The most common cases that fall under "permissible purpose" include: to decide whether to extend credit to you, in connection with collecting a debt, for employment purposes, and to underwrite an insurance policy.

They should also provide your credit report to employers only with your written consent, and provide you with a copy of your credit score upon your request.

Agencies are also required to give you the opportunity to opt out of pre-screened credit offers.

Requirements for Information Furnishers

The FCRA applies to more than just credit bureaus. The businesses that provide information to the credit bureaus, or information furnishers, also have legal obligations:

• They can't report inaccurate information.
• They must promptly update and correct any inaccurate information previously. provided to the credit bureaus.
• They must tell you about any negative information reported to the credit bureaus within 30 days.
• They must let the credit bureaus know when you voluntarily close an account.
• They must have a procedure for responding to identity theft notices sent by the credit bureaus.
• They can't report accounts that you have previously reported were the result of identity theft.

You have the right to dispute inaccurate credit report information directly with the information furnisher in writing. After receiving your dispute, the creditor must notify the credit bureau of your dispute, and it is not allowed to continue reporting inaccurate information until it has investigated your dispute.

Important

Businesses are not legally required to report to the credit bureaus. When they do, they must follow the rules set by the FCRA.

Requirements for Businesses That Use Your Credit Report Information

Companies may request your credit report if they have a "permissible purpose"; for example, to grant credit to you after you've submitted an application. The FCRA requires that these businesses:

• Let you know when you've been turned down because of information in your credit report
• Provide you with the name and address of the credit bureau that supplied the report used in the decision to turn you down

Dealing With FCRA Violations

You can seek damages from a business that violates your rights under the FCRA, whether it's the credit bureau, an information furnisher, or a user of your credit report information.

The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.

1. Cornell Law School Legal Information Institute. "Fair Credit Reporting Act - 15 U.S. Code § 1681.Congressional Findings and Statement of Purpose."
2. Cornell Law School Legal Information Institute. "Fair Credit Reporting Act - 15 U.S. Code § 1681a.Definitions; Rules of Construction."
3. Cornell Law School Legal Information Institute. "Consumer Credit Protection Act of 1968 - 15 U.S. Code § 1681j. Charges for Certain Disclosures."
4. Cornell Law School Legal Information Institute. "Consumer Credit Protection Act of 1968 - 15 U.S. Code § 1681b. Permissible Purposes of Consumer Reports."
5. Federal Trade Commission. "Free Weekly Credit Reports During COVID Extended Until April 2022."
6. Cornell Law School Legal Information Institute. "Consumer Credit Protection Act of 1968 - 15 U.S. Code § 1681i. Procedure in Case of Disputed Accuracy."
7. Cornell Law School Legal Information Institute. "Consumer Credit Protection Act of 1968 - 15 U.S. Code § 1681c. Requirements Relating to Information Contained in Consumer Reports."
8. Cornell Law School Legal Information Institute. "Consumer Credit Protection Act of 1968 - 15 U.S. Code § 1681s–3. Affiliate Sharing."
9. Cornell Law School Legal Information Institute. "Consumer Credit Protection Act of 1968 - 15 U.S. Code § 1681m. Requirements on Users of Consumer Reports."
10. Cornell Law School Legal Information Institute. "Consumer Credit Protection Act of 1968 - 15 U.S. Code § 1681n. Civil Liability for Willful Noncompliance."

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