What is the FCRA?

The Fair Credit Reporting Act (FCRA) ensures that consumer reporting agencies conduct reporting activities on your credit report with accuracy, fairness and impartiality while protecting your right to privacy. This act imposes strict guidelines to regulate the reporting agencies that provide your reports. As well as the people who furnish the information to the agencies. Consumer reporting agencies are companies who assemble and evaluate credit information to provide a credit report to third parties for profit. The FCRA regulations apply specifically to consumer reporting agencies. Because they are the parties accessing and distributing your information. These agencies can only provide your reports under certain circumstances. It is legal for them to provide your report when the person or institution asking for the report will be using the information for:

–        Employment, such as when you apply for a job

–        A credit transaction, such as applying for a loan

–        An insurance policy

A credit report is a record of an individual’s credit activity. It contains detailed information about the history of the credit you have obtained, the standing of your accounts, your credit capacity, your general reputation and your mode of living. There are usually four components to your credit report:

  1. Identifying information such as your name, aliases, address history, Social Security number, etc.
  2. Credit information that includes a list of your accounts with banks, credit card companies, and other lenders. As well as your payment history on these accounts.
  3. Public record information such as bankruptcy, tax records, judgments, etc.
  4. Inquiry history that shows who has looked at or obtained a copy of your report in the last year.

Yyour credit report contains a lot of sensitive information. That is why the FCRA is also designed to regulate who can obtain your reports, restrict how the information can be used, and ensure all information in the report is accurate. An institution may not furnish information that it knows is false or inaccurate to a consumer reporting agency. They must be sure not to resubmit that information. Additionally, consumer reporting agencies cannot report obsolete information. For example, bankruptcies can only be on a credit report for 10 years after the date of adjudication, and most other negative information cannot be more than seven years old.  There are serious penalties, civil and criminal, if any individual or institution is found guilty of violating the FCRA.

 


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