Fair Credit Reporting Act (FCRA)

What the FCRA is

The Fair Credit Reporting Act (FCRA) is a federal law that governs how consumer credit information is collected, used, retained, and shared. Enacted in 1970, it aims to promote the accuracy, fairness, and privacy of data held by credit reporting agencies (CRAs).

Who enforces it

The Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) enforce the FCRA. States may also have complementary laws.

What credit bureaus can and cannot do

Credit bureaus (e.g., Equifax, Experian, TransUnion) gather and sell information used in credit reports and credit scores. The FCRA limits what they may collect and who may access reports:

Typical information included
* Bill payment history, loans, current debts
* Employment history and addresses
* Bankruptcies (timing varies)
* Child support arrears
* Arrest records (generally limited to recent years or the applicable statute of limitations)

Access restrictions
* A party must have a permissible purpose to pull a consumer’s report (e.g., lenders, insurers, landlords for credit decisions).
* Employers may obtain reports only with the applicant’s or employee’s written permission and must specify employment as the purpose.
* Some companies may use limited report data for prescreening unsolicited credit or insurance offers; consumers can opt out of prescreened offers.

How to opt out of prescreening
* Phone: 1-888-5-OPTOUT (1-888-567-8688)
* Online: OptOutPrescreen.com

Consumer rights under the FCRA

• Access: You are entitled to at least one free credit report every 12 months from each major bureau. AnnualCreditReport.com is the authorized portal (reports are currently available more frequently for those who request them).
• Notice: You must be notified if information in your report is used against you in a credit, employment, or insurance decision.
• Dispute and correction: You can dispute incomplete or inaccurate information; the bureau must investigate and correct errors.
• Time limits: Most negative items must be removed after seven years; some bankruptcies may stay up to ten years. If outdated information remains, you have the right to have it removed.
• Employment-related verification: You can verify the accuracy of reports used for employment purposes.

If a bureau does not resolve a dispute, you may file a complaint with the CFPB.

Penalties and remedies

• Civil penalties: Violations may carry fines (commonly cited ranges are $100–$1,000 per violation), and courts may award actual and punitive damages plus attorney fees when warranted.
• Criminal liability: Obtaining information under false pretenses can lead to criminal charges.

Example: Tenant screening

If a landlord denies a rental application citing a credit report, you can request and review the report to confirm the reason. If the landlord misrepresented the report or used an unlawful reason (e.g., discrimination), the FCRA provides avenues to verify and seek redress; violations can result in fines.

How to use these protections

• Check your credit reports regularly for errors.
• Use AnnualCreditReport.com to obtain free reports.
• Dispute inaccuracies promptly with the reporting bureau.
• Opt out of prescreened offers if you do not want unsolicited credit or insurance offers.
• Contact the CFPB to file a complaint if disputes are not handled properly.

Bottom line

The FCRA sets standards for accuracy, privacy, and permissible access to consumer credit information. Knowing your rights—regularly checking reports, disputing errors, and controlling prescreening—helps protect your credit profile and financial opportunities.