Fair Credit Reporting Act (FCRA)

The Fair Credit Reporting Act (FCRA) is United States federal legislation that promotes accuracy, fairness and privacy for data used by consumer reporting agencies. Consumer reporting agencies include credit bureaus and financial agencies that collect, store, use and disseminate consumer information for use in background checks.

Until the 1970s when FCRA was enacted, consumer reporting agencies had the power to decide what information they gathered would be shared with the consumer. Consumer rights under the FCRA stipulate that:

  • The consumer must be told if information in his file has been used against him. Anyone who uses a credit report or another type of consumer report to deny a consumer's application for credit, insurance, or employment must tell the consumer and must give him the name, address, and phone number of the agency that provided the information.
  • The consumer has the right to know what is in his file. The consumer may request and obtain all the information about him in the files of a consumer reporting agency after providing proper identification. Consumers are entitled to one free disclosure every 12 months upon request from each nationwide credit bureau and from nationwide specialty consumer reporting agencies.
  • The consumer has the right to ask for a credit score. Credit scores are numerical summaries of credit-worthiness based on information from credit bureaus.
  • The consumer has the right to dispute incomplete or inaccurate information.
  • If a consumer reporting agency violates the FCRA, the consumer has the right to take legal action and seek financial remuneration for damages per-violation.

The FCRA limits access to a consumer's file by stipulating that a consumer reporting agency may provide information only to people with a valid need, which is defined in the legislation. It's up to each state to enforce the FCRA and in some cases, the consumer may have more rights under state law.

This was last updated in January 2009

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I believe that under the FCRA SOL OF 7 YEARS begins FOR CREDIT BUREAUS reporting BEGINS OF 7 YEARS BEGINS WITH THE FIRST REPORTED DELINQUENCY NOT THE LAST ONE. This means according to the FCRA the SOL runs for only 7 yrs from the first delinquency and credit bureaus cannot report a debt that was fully paid after the first delinquency. This is a legal issue since it does not matter how many times the account was delinquent became current during those 7 yrs from the first reported delinquency.
I have an employee who was approved for credit.  He was then denied credit based on his association with me and based on my association with a former employee.  In other words, I have never had credit with this creditor but I was supervisor of an employee who failed to pay.  Because I supervised that employee and asked this company to refrain from contacting my office for the former employee because he no longer worked for me, the new employee was then denied credit.  Is there a solution?