Your Rights Under the Fair Credit Reporting Act and How to Report Violations
Table of Contents
- By David Lukic
- Published: Feb 24, 2022
- Last Updated: Mar 18, 2022
What is the Fair Credit Reporting Act?
The federal government enacted this consumer protection law to regulate the collection, use, and distribution of information about an individual's personal finances. It limits the information collected, the length of time the records are kept, and how the data is released to third parties.
By checking on your credit report, you may discover which bank or company has requested a copy of your credit report. With this information, you may determine if your rights under the Fair Credit Reporting Act have been violated. See ftc.gov for a summary of your rights under the Fair Credit Reporting Act.
Why Credit Reports Matter
Your personal credit history is evaluated for risk when you want to rent an office space, buy a house or car, apply for a job in a sensitive industry (law enforcement, banking, financial services), or even just to get your first credit card. Companies are less likely to approve such applications for individuals who don't have a history of repaying loans – or those with defaults on their credit records. Court records may also be included in credit reports, so any civil judgments (lawsuits that require you to repay someone) are also visible. This information follows you throughout your life, so accuracy and protection are critical.
Who Collects Credit Information?
The credit reporting agencies that collect information used in individual credit reports are:
- Experian.
- TransUnion.
- Equifax.
The information compiled into credit reports includes records of:
- Loans.
- Mortgages.
- Credit cards.
- Bank accounts.
- Bankruptcies.
- State and local courts.
- Collection agencies.
- Loan defaults.
- Personal information such as birthdate and address.
How Your Credit Information is Used
This information is used in a credit score formula. Many companies use this number to determine if the individual is a reasonable risk for a loan or other credit. An individual's credit score may range from 300 to 850, with a higher number being better in the eyes of loan officers. A higher number reveals a clean record of repaying loans, positive bank balances, low debt-to-income ratio, and few if any civil judgments against the individual.
Credit reports are sold to companies such as banks considering loaning money to the individual. Others who may request a credit report include:
- Prospective employers.
- Potential landlords.
- Adoption agencies.
- Foreign embassies reviewing visa applications.
- Military recruiters.
- Insurance agencies.
Individuals need to check their credit reports annually to ensure that their personal information isn't compromised. Identity theft affects thousands of people each year, generally in the forms of:
- Fraudulent loans using another person's name, personal identity information, and credit history.
- Use of another person's health insurance.
- Manipulating personal information to get into and drain bank accounts.
There are also specialty credit reporting agencies that include Innovis, MIB Group, UnitedHealth Group, Tenant Data Services, Retail Equation, Acxiom, Telecheck, Integrated Screening Partners, Milliman, and Choice Point. These companies are also required to comply with federal FCRA laws. Therefore, individuals interested in reviewing their personal files held by these companies must contact each separately. These compile information on individuals such as:
- Medical insurance.
- Employment history.
- Residential history.
- Check writing history.
Your Rights Under FCRA
- You have the right to know what is in your file by requesting reports annually (free) from each agency that collects the information.
- You have the right to know if your information has been used against you, such as denial of a loan application or a rental unit. The individual or business that denied your application must supply you with the information they used, including the credit reporting company's name.
- You have the right to correct erroneous information in your file. Credit reporting agencies have 30 days to make corrections but will continue to include information they can verify (they must notify you in writing if they replace disputed information after verifying it).
- If you have been a victim of identity theft or fraud, you are entitled to a full disclosure report, which is most extensive, including much more than the summary information that business inquiries receive.
- Your credit information may not be provided to individuals or companies that do not have the proper permission. Specifically, employers and prospective employers must have written consent to access an individual's credit report.
- If a prospective employer decides against your application after reviewing your credit report, the employer must supply you with a copy of the information and allow you to dispute it before fully withdrawing you from consideration.
- You have the right to sue for damages if your credit information is misused. Some states provide more protection under FCRA than the federal statute.
Expiration of Negative Information
If you have declared bankruptcy, the information should only be on your credit report for seven years after discharge (conclusion of bankruptcy process). If it is kept any longer, you may dispute it and request that the information be removed. If a credit reporting agency decides that the disputed information is still pertinent, verifiable, and within the allowed timeframe, they may reinstate it but must notify you five days before doing so.
Likewise, delinquent loans or payments should only be on a credit report for seven years.
How To Report FCRA Violations
If you believe your credit report has errors, you must first request a copy of the report. Next, identify the error and contact the credit reporting company that produced the report. Keep track of the time you called and the person you spoke to, and any ticket number or confirmation number used to identify your case. The reporting company has 30 days to review the information and correct any errors or respond to your complaint. If the issue pertains to a closed credit card account or ongoing identity theft dispute, you may have to provide documents to support your claims. If the company persists in reporting information that you have documents to prove is wrong, you may want to consult an attorney.
