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Click on a letter to search for common credit terminology
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Your Credit Rights
Key Rights Contained in the Fair Credit Reporting Act (FCRA)
The Fair Credit Reporting Act
(FCRA) is a federal law that
regulates how credit reporting agencies use your information.
Enacted in 1970 and substantially amended in the late 1990s and
again in 2003, the FCRA restricts who has access to your sensitive
credit information and how that information can be used. |
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What is a credit score?
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A credit score is a complex mathematical model that
evaluates many types of information in a credit file. A
credit score is used by a lender to help determine whether a
person qualifies for a particular credit card, loan, or
service. Most credit scores estimate the risk a company
incurs by lending a person money or providing them with a
service –– specifically, the likelihood that the person
will make payments on time in the next two to three years.
Generally, the higher the score, the less risk the person
represents.
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The federal Fair Credit Reporting Act (FCRA) promotes the
accuracy, fairness, and privacy of information in the files of
consumer reporting agencies. There are many types of consumer
reporting agencies, including credit bureaus and specialty
agencies (such as agencies that sell information about check
writing histories, medical records, and rental history
records). Here is a summary of your major rights under the
FCRA. For more information, including information
about additional rights, go to www.ftc.gov/credit
or write to: Consumer Response Center, Room 130-A, Federal
Trade Commission, 600 Pennsylvania Ave. N.W., Washington, D.C.
20580.
- You must be told if information in your file has
been used against you. Anyone who uses a credit
report or another type of consumer report to deny your
application for credit, insurance, or employment - or to
take another adverse action against you - must tell you,
and must give you the name, address, and phone number of
the agency that provided the information.
- You have the right to know what is in your file.
You may request and obtain all the information about you
in the files of a consumer reporting agency (your
"file disclosure"). You will be required to
provide proper identification, which may include your
Social Security number. In many cases, the disclosure will
be free. You are entitled to a free file disclosure if:
- a person has taken adverse action against you
because of information in your credit report;
- you are the victim of identify theft and place a
fraud alert in your file;
- your file contains inaccurate information as a
result of fraud;
- you are on public assistance;
- you are unemployed but expect to apply for
employment within 60 days. In addition, by September
2005 all consumers will be entitled to one free
disclosure every 12 months upon request from each
nationwide credit bureau and from nationwide specialty
consumer reporting agencies.
- You have the right to ask for a credit score.
Credit scores are numerical summaries of your
credit-worthiness based on information from credit
bureaus. You may request a credit score from consumer
reporting agencies that create scores or distribute scores
used in residential real property loans, but you will have
to pay for it. In some mortgage transactions, you will
receive credit score information for free from the
mortgage lender.
- You have the right to dispute incomplete or
inaccurate information. If you identify
information in your file that is incomplete or inaccurate,
and report it to the consumer reporting agency, the agency
must investigate unless your dispute is frivolous.
- Consumer reporting agencies must correct or
delete inaccurate, incomplete, or unverifiable
information. Inaccurate, incomplete or
unverifiable information must be removed or corrected,
usually within 30 days. However, a consumer reporting
agency may continue to report information it has verified
as accurate.
- Consumer reporting agencies may not report
outdated negative information. In most cases, a
consumer reporting agency may not report negative
information that is more than seven years old, or
bankruptcies that are more than 10 years old.
- Access to your file is limited. A
consumer reporting agency may provide information about
you only to people with a valid need -- usually to
consider an application with a creditor, insurer,
employer, landlord, or other business. The FCRA specifies
those with a valid need for access.
- You must give your consent for reports to be
provided to employers. A consumer reporting
agency may not give out information about you to your
employer, or a potential employer, without your written
consent given to the employer. Written consent generally
is not required in the trucking industry.
- You may limit "prescreened" offers of
credit and insurance you get based on information in your
credit report. Unsolicited
"prescreened" offers for credit and insurance
must include a toll-free phone number you can call if you
choose to remove your name and address from the lists
these offers are based on. You may opt-out with the
nationwide credit bureaus at 1-888-5-OPTOUT
(1-888-567-8688) .
- You may seek damages from violators. If
a consumer reporting agency, or, in some cases, a user of
consumer reports or a furnisher of information to a
consumer reporting agency violates the FCRA, you may be
able to sue in state or federal court.
- Identity theft victims and active duty military
personnel have additional rights.
States may enforce the FCRA, and many states have
their own consumer reporting laws. In some cases, you may have
more rights under state law. For more information, contact
your state or local consumer protection agency or your state
Attorney General.
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