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A Guide to the Fair Credit Reporting Act

The Fair Credit Reporting Act, more commonly referred to as the FCRA, is the federal statute that was enacted to protect consumer rights in the credit reporting industry.  This law is a consumer minded statute that ensures accuracy and fairness in reporting and dissemination of your financial information.  The FCRA specifically outlines consumer rights but also sets guidelines for creditors, lenders and consumer reporting agencies.

The FCRA's Growing Influence

Initially in the 1970s when the FCRA was enacted it solely applied to consumers and credit reporting agencies.  As the statute has evolved over the past 45 plus years to protect the ever changing financial industry, the FCRA now covers all consumer reporting agencies that collect, store, use and disseminate consumer information for use in credit reporting, insurance reporting, conducting employment background checks, conducting tenet screenings, bank account and checking account reporting.

Sections 1 - 3 of the FCRA

The statute is broken down into a number of sections each defining consumer rights and obligations of the credit reporting industry and furnishers of information, or the companies reporting information regarding consumers to the credit reporting agencies.  In the first two sections of the FCRA, the statute explains what the law is and why there is a need for the law.  The terms and definitions in the statute, are in section three.

Sections 4 - 5 of the FCRA

The fourth section explains when a credit reporting agency may provide a copy of your report.  There are specific times that a lender may review your report, such as after receiving an application for credit.  This section explains that there must be a permissible purpose for providing and for requesting a consumer report.  In the fifth section, the FCRA explains that there is a limit on how long negative information can be reported on your credit file and the time limit depends on the type of account reporting.

Sections 6 - 8 of the FCRA

Section six and seven are about credit reporting compliance.  In other words, the credit reporting industry must maintain reasonable procedures to avoid violating the statute.  Section eight allows government agencies to review your report but not in its entirety.  

Sections 9 - 12 of the FCRA

Section nine is an important section for your rights.  This section sets out what a credit reporting agency must disclose to you upon request and section ten explains what the consumer must provide to the reporting agency to obtain of copy of your report.  In section 11, the FCRA sets out how a consumer is to handle inaccurate information included in your report and section 12 requires consumers to pay for reports (beyond the one free consumer report per year that was an amendment to the statute). The statute continues to define consumer rights in 29 sections total, each with a  consumer minded purpose.  

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For a complete copy of your rights under the FCRA review the entire statute.  Remember, under the Act your are entitled to a copy of your report upon request and it must contain all of the information included in your file; you have the right to review your report and dispute the completeness or accuracy of information contained in your report.  If you believe your rights have been violated under the Fair Credit Reporting Act, contact SmithMarco P.C. for a completely free case review.

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