What Is The Fair Credit Reporting Act (FCRA)?

What is the Fair Credit Reporting Act FCRA

What Is The Fair Credit Reporting Act?


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What is the Fair Credit Reporting Act and How Does It Help Consumers?

The Fair Credit Reporting Act (FCRA) protects consumers from abusive credit reporting practices while allowing insurance companies, money lenders, employers, and others to use consumer credit reports to determine credit risk. The FCRA was initially passed by Congress in 1970 to assure the accuracy and privacy of personal information recorded by credit reporting agencies in consumer credit reports and has been amended on occasion since.

Believe it or not, before 1970, consumers did not have the right to know what information was listed on their credit reports, nor dispute negative information contained in their credit report. It was impossible for a consumer to order copies of their reports and see if the information was accurate or not. If a consumer somehow found out that items on their credit reports were inaccurate, no way existed to challenge or get rid of those items with the credit bureaus. There were legally no limits on how long information could remain on your credit reports, so many consumers were victims of erroneous listings that haunted them forever.

What is a Credit Reporting Agency?

The FCRA defines a credit reporting agency or credit bureau as a company that collects personal information about consumers to sell it to third parties. Buyers of this consumer data include mortgage lenders, auto finance companies, insurers, and any other business that requires consumer credit reports to assess consumers before doing business with them.

In the United States of America, there are three major credit bureaus: Experian, TransUnion, and Equifax. All credit bureaus must adhere to the FCRA’s credit reporting rules to protect consumer rights.

Does the FCRA Regulate Credit Card Issuers and Banks?

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

The FCRA states that you have the right to access your credit reports, dispute incorrect or incomplete information, and limit who can access your credit reports. You can also legally sue for damages from violators and be told if your credit report is used against you. Most individual states have additional consumer reporting laws beyond FCRA provisions.
The experts at CreditStryke credit repair can help you understand your credit profile and check whether you have inaccurate and unsubstantiated negative items on your credit report.

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The FCRA's Rules for Credit Reporting Agencies

The FCRA imparts to you specific rights and protections from credit bureaus. Under the FCRA, credit reporting agencies are obligated to:

  • Give you annual free access to your credit reports
  • Limit access to your credit reports
  • Limit how long accounts can stay on your credit report
  • Allow you to challenge items on your credit reports

Free Access to Credit Reports

A credit report contains all information the CRA has on file about you. Upon receiving proper identification, credit reporting agencies must provide you with your credit report within 15 days. The FCRA allows consumers one free copy annually of each of their consumer credit reports from Experian, TransUnion, and Equifax. To get your free annual copy of your credit reports, visit annualcreditreport.com.

In addition to the annual credit reports you’re entitled to, you can also access your reports for any of the following purposes:

  • You are denied credit on an application due to your credit report.
  • You are actively seeking employment.
  • You are on Temporary Assistance for Needy Families (TANF).
  • You have been a victim of identity theft.

Under the above conditions, the FCRA guarantees that you can gain access to these vital credit details without having to spend a considerable amount of money in doing so.

Does the FCRA Grant Me Access to My Credit Score?

Your actual three-digit credit score, which summarizes your credit reports and determines your eligibility and reliability as a consumer borrower, is not included on the free version of your annual credit reports.

Limiting Access to Your Credit Reports

A critical aspect of the FCRA is that it regulates and controls who has a permissible purpose of procuring your credit reports, such as when applying for new credit or a new job. An inquiry is the notation made in a credit file when a potential creditor, employer, or insurer sneaks a peek at it. Consumers have brought successful small claims court lawsuits against those companies who acquire credit files without a permissible purpose.

An organization must have an excellent reason to request and view your credit report. For example, suppose you’ve completed an application for a line of credit. In that case, the lender has an excellent permissible purpose of viewing your credit report.
Organizations can request to see your report in specific scenarios, but they require your written permission to do so. If you apply for a job and your prospective employer wanted to see your credit report as a character reference, this would be one such scenario. You’re able to authorize them to access your credit reports. Still, the employer cannot look up your credit information at will.

Controlling the Length of Time Items Can Remain on Your Report

The FCRA has strict guidelines regarding what can be inserted on your report and how long it can stay there. It wouldn’t be fair if items were permanently kept on your credit record.

The FCRA states that the reporting period for most information on credit reports is seven years. Bankruptcies are one of few exceptions which may remain for ten years.

Bear in mind these are maxed limits. There is no minimum amount of time something must remain on a consumer’s credit report. From this aspect, the FCRA exists to protect you against something remaining on your credit report forever.

Disputing Items On Your Credit Report

The process to which credit bureaus must manage consumer complaints are complicated and laid out in the complete documentation of the FCRA, but here is a short version: When a consumer disputes an item on their credit file, the bureau must publicly note within the credit file that the item in question is disputed. An investigation must commence and must be completed within about 30 days.

Once the investigation is complete, the bureau must inform the consumer of any actions that were taken. These include:

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

If you feel the action taken violates the FCRA, you have the right to take legal action. Thankfully, this threat is usually enough to stop companies from violating the laws, offering you a good amount of protection.

Can Medical Issues Be Included in Your Report?

The fact that you may be sick should not ever be considered as part of a credit application. Creditors are legally prohibited from considering this information when deciding whether to lend or how much they can lend. According to the FCRA, any medical information must not be included in your credit report. Considering a consumer’s medical condition as part of a credit application could easily lead to some form of discrimination.

How Does CreditStryke Handle Challenges?

It’s estimated that at least 17 million credit reports are inaccurate. With over a decade in the business, CreditStryke has the strategies to help you work to fix your credit report. Our team reviews your credit reports, identifies any errors, then communicates directly with your creditors and the credit bureaus to dispute erroneous information.

Every person’s credit repair strategy is case-specific. Our clients receive a monthly credit score improvement analysis with action plans to help improve their credit. When you work with CreditStryke, be sure to send us any responses or information you receive from the credit bureaus and your creditors.

How You Can Benefit from Your FCRA Rights

The Fair Credit Reporting Act grants you the right to repair your credit, but it doesn’t do the job for you. Suppose there are questionable negative items on your credit reports, and you do nothing about them. In that case, those items will remain on your report. 

CreditStryke leverages the FCRA and other federal laws. CreditStryke’s credit repair services have helped clients legally remove tens of thousands of questionable collections, late payments, bankruptcies, and charge-offs from their credit reports.

Contact CreditStryke today to receive a free credit repair consultation, learn about your consumer credit rights, and understand how credit repair may help you achieve your financial goals.

by creditstryke

Fix Your Credit. CreditStryke Is a Trusted Leader in the Credit Repair Industry. We Fight for Every Consumer’s Right to an Accurate, Fair and Substantiated Credit Report, Including Yours. Let CreditStryke Improve Your Credit. CreditStryke 3201 Dallas Pkwy., Suite 200, Frisco, TX 75034. (469)708-0007.


3201 Dallas Pkwy.
Suite 200
Frisco, TX 75034
1(800) 394-6768

Copyright © 2021 CreditStryke, LLC. All rights reserved. FICO is a registered trademark of Fair Isaac Corporation in the United States and other countries. CreditStryke, LLC. does not provide legal advice. CreditStryke, LLC. does not guarantee the permanent removal of verifiable trade-lines or make promise(s) of any particular outcome whatsoever. CreditStryke, LLC. requires active participation from its clientele regarding requested documents and information, including investigation results for the sought-after outcome of a healthy, accurate credit report.