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Understanding the Fair Credit Reporting Act (FCRA)
Jul 15, 2004

Fair Credit Reporting Act (FCRA) - Designed to promote accuracy and ensure the privacy of the information used in consumer reports, the FCRA ensures that consumer reporting agencies (CRAs), such as credit bureaus, furnish correct and complete information to businesses for use when evaluating your application.


According to the FCRA you have a right to receive a copy of your credit report for a small fee - the copy of your report must contain all of the information in your file at the time of your request.

You have a right to know the name of anyone who received your credit report in the last year, or in the last two years for employment purposes.

Any company that denies your application must supply the name and address of the CRA they contacted, provided the denial was based on information given by the CRA.

You have a right to receive a free copy of your credit report when your application is denied because of information supplied by the CRA - your request must be made within 60 days of receiving your denial notice.

If you contest the completeness or accuracy of information in your report, you can file a dispute with the CRA and with the company that furnished the information to the CRA - both the CRA and the furnisher of information are legally obligated to reinvestigate your dispute. You have the right to add a summary explanation to your credit report - when a dispute is not resolved to your satisfaction.

Outdated information cannot be reported - In most cases, negative information that is more than seven years old can not be reported (ten years for bankruptcies.)

Access to your file is limited - only businesses with a legitimate need to review your file may receive information about you. Your consent is required for reports that are provided to employers, or reports that contain medical information.

You may choose to exclude your name from CRA lists for unsolicited credit and insurance offers.

Recent amendments to the Act expand your rights and place additional requirements on CRAs and businesses that use consumer reports. Note that you may have additional rights under state laws.

Equal Credit Opportunity Act (ECOA) - prohibits credit discrimination based on sex, race, marital status, religion, national origin, age, or receipt of public assistance.

According to the ECOA:

Credit cannot be denied based on race, sex, marital status, religion, age, national origin, or receipt of public assistance.
Reliable public assistance must be considered in the same manner as other income.
You have a legal right to know the reasons behind any denial of credit.
Fair Credit Billing Act (FCBA); Electronic Fund Transfer Act (EFTA) - establishes guidelines for resolving mistakes on credit billing and electronic fund transfer account statements.


The FCBA and EFTA guidelines include:

Charges or electronic fund transfers that you have not made or authorized anyone to make
Charges or electronic fund transfers that show the wrong amount or date or are identified incorrectly Computation errors
Failure to show payments, credits, or electronic fund transfers correctly
Not mailing or delivering credit billing statements to your current address, as long as that address was received by the creditor in writing at least 20 days before the billing period ended
Explanations or documentation you request, due to possible errors, regarding charges or electronic fund.
The FCBA generally applies only to credit accounts such as credit cards, department store accounts, and overdraft checking accounts. It does not apply to loans or credit sales paid on a fixed schedule, such as an automobile loan. The EFTA applies to electronic fund transfers, such as ATM transactions, point-of-sale debit transactions, and other electronic banking transactions.

Fair Debt Collection Practices Act (FDCPA) - prohibits debt collectors from engaging in unfair, deceptive, or abusive practices while collecting these debts. This applies to personal, family, and household debts, and includes money owed for the purchase of a car, for medical care, or for charge accounts.

According to the FDCPA, debt collectors:

May contact you only between 8 a.m. and 9 p.m. May not contact you at work if they know your employer disapproves.
May not harass, oppress, or abuse you.
May not lie when collecting debts, such as falsely implying that you have committed a crime.
Must identify themselves to you on the phone.
Must stop contacting you if you ask them to in writing.
For more information - for further information regarding these laws and other consumer and credit-related rights, visit the Federal Trade Commission's web site at www.ftc.gov .

Related Article: Credit and Your Consumer Rights >>