The Fair Credit Reporting Act (FCRA) is a federal law that regulates how credit reporting agencies can collect, use, and share information about consumers' credit history. It is important for consumers to be aware of the FCRA, as it gives them certain rights and protections when it comes to their credit reports.
What is the FCRA?
The FCRA is a law that was enacted in 1970 to ensure that credit reporting agencies furnish accurate and fair credit reports. The FCRA applies to credit reporting agencies, lenders, and other entities that use credit reports to make decisions about consumers, such as whether to extend credit or offer employment.
Under the FCRA, credit reporting agencies are required to follow certain rules when collecting and reporting credit information. For example, they must have reasonable procedures in place to ensure the accuracy of the information they report. They also must provide consumers with a copy of their credit report upon request, and they must include a summary of consumers' rights under the FCRA with every credit report they furnish.
Who is covered by the FCRA?
The FCRA applies to credit reporting agencies, lenders, and other entities that use credit reports to make decisions about consumers. This includes banks, credit card companies, mortgage lenders, and landlords, among others.
Consumers' rights under the FCRA
The FCRA gives consumers certain rights when it comes to their credit reports. Some of the most important rights include:
The right to request a copy of their credit report: Consumers have the right to request a copy of their credit report from each of the three major credit reporting agencies (Equifax, Experian, and TransUnion) once per year for free.
The right to dispute errors on their credit report: If a consumer believes that there is an error on their credit report, they have the right to dispute the error with the credit reporting agency. The credit reporting agency must then investigate the dispute and either correct the error or provide an explanation if it is determined that the error is valid.
The right to opt-out of pre-approved credit offers: Consumers have the right to opt-out of receiving pre-approved credit offers by mail. This can be done by visiting the OptOutPrescreen website or calling 1-888-5-OPTOUT (1-888-567-8688).
How can consumers protect their rights under the FCRA?
Consumers can protect their rights under the FCRA by taking the following steps:
Regularly review their credit reports: It is a good idea for consumers to review their credit reports at least once per year to ensure that the information is accurate. They can request a free copy of their credit report from each of the three major credit reporting agencies at AnnualCreditReport.com.
Dispute errors on their credit report: If a consumer finds an error on their credit report, they should dispute the error with the credit reporting agency. The credit reporting agency is required to investigate the dispute and either correct the error or provide an explanation if it is determined that the error is valid.
Opt-out of pre-approved credit offers: Consumers can opt-out of receiving pre-approved credit offers by mail by visiting the OptOutPrescreen website or calling 1-888-5-OPTOUT (1-888-567-8688). This can help to protect against identity theft and reduce the risk of receiving unwanted credit offers.
Conclusion
The FCRA is an important law that gives consumers certain rights and protections when it comes to their credit reports. By understanding their rights under the FCRA and taking steps to protect them, consumers can help to ensure that their credit reports are accurate and fair. Regularly reviewing credit reports, disputing errors, and opting-out of pre-approved credit offers are all important ways for consumers to protect their rights under the FCRA.