Consumer Rights Under the Fair Credit Reporting Act (FCRA)

The federal Fair Credit Reporting Act (FCRA) provides consumers with many rights. Some state laws provide even further protections. This article examines the rights you have under the FCRA, how long negative information can remain on your credit report, and how the FCRA is enforced. 

What Is the Fair Credit Reporting Act (FCRA)?

The Fair Credit Reporting Act (FCRA) is a law that protects your rights when it comes to your credit information. It regulates how consumer reporting agencies (often known as credit bureaus), lenders, and others who use your credit reports handle your information. If your credit score is affected by incorrect information, the FCRA also gives you ways to seek compensation.

Congress passed the FCRA in 1971 to ensure fairness, accuracy, and privacy in the way your credit information is reported.

Understanding CRAs, Furnishers, and Users

In the context of the FCRA, a CRA refers to a consumer reporting agency—not just a credit reporting agency. What’s the difference? Consumer reporting agencies include not only the major credit bureaus like Equifax, TransUnion, and Experian but also other companies that gather and share different types of consumer information. These might include agencies that check your background as a tenant, employee, or even as a potential gambler at a casino.

Furnishers are usually lenders that report your payment history to the credit bureaus, but they can also be any organization that provides data that appears in your credit reports.

Users are anyone who reviews your consumer report. Most often, these are lenders deciding whether to approve your credit application. But they could also be employers screening you for a job or a bankruptcy attorney making sure all your creditors are included in your bankruptcy filing.

When Can Someone Legally Check Your Credit Report?

Users can only look at your consumer report for permissible purposes. The United States Code (USC) contains a long list of potential permissible purposes, including by not limited to:

• A user can view your report if you give them written permission.

• A user can view your consumer report if they have a court order.

• Your report can be used to determine whether to extend you credit. 

• A user can view a specialty report if they're evaluating you for the specialty that the report is normally used for. For example, if the user is an apartment manager, viewing your report from a tenant screening CRA, that would be a permissible purpose. 

What Are My Rights Under the FCRA?

The FCRA provides many rights to consumers, including:

• A right to access your credit report

• A right to dispute inaccurate information on your credit report

• A right to know if your credit report was used against you.

Let's dig in to each of these a bit more.

Your Right To Access Your Credit Report

You have a right to look at your credit report any time you choose. This is necessary because you must be able to check it for accuracy. No one knows what you’ve done or failed to do better than you. You need to use your right to access your credit report to protect yourself from inaccurate information that can harm your credit score.

You can run a free credit report for free once a week from each of the major credit bureaus. If you’ve already pulled your free credit report, you'll have to pay to access further reports with some exceptions. But the law limits what CRAs can charge for a credit report to $13.

You can also get a free credit report if:

• You're unemployed and will be looking for a job within the next 60 days.

• You're entitled to a free report if you're denied credit. In this situation, you're only entitled to a free report from the CRA that caused the user to deny credit. This rule also applies if you're denied an apartment, employment, a credit card, or anything due to the information provided on the report.

• There are fraud or identity theft items on your report.

• You're on public assistance.

How To Get Your Credit Report

It's easy to get your report for free from the three major national credit bureaus. Just visit AnnualCreditReport.com. This is a centralized website for all three credit bureaus. The federal government requires the bureaus to maintain this site.

But these aren’t the only CRAs required to give you a free report once a week. You're also entitled to a free report once a year from specialty national CRAs, like employment screening and tenant screening companies. You'll have to contact these companies directly, as they're not required to provide the reports through AnnualCreditReport.com.

If you don't have access to a computer to or don't want to run the report online, you can also call to order copies of your report at the following numbers:

• Annual Credit Report Service: 1-877-322-8228

• Equifax credit report: 1-800-685-1111

• Experian credit report: 1-888-397-3742

• TransUnion credit report: 1-800-916-8800

Your Right To Dispute Items on Your Credit Report

You have a right to dispute any incorrect information that appears on your report. You can find this information by getting your free credit report each year and looking for common errors.

If you've checked your credit report and found an error, you’ll need to file a dispute with the CRA reporting the error. The CRA also has to contact the creditor who furnished the information, but it doesn’t hurt for you to send a copy of the dispute to the furnisher as well. Remember, the furnisher is the creditor or debt collection agency that reported the inaccurate information to the credit bureau. Upsolve has more information on how to write an dispute letter.

Once you send a dispute letter, the CRA gets in touch with the creditor to get the information validated. If the creditor can't validate the disputed issue on your credit report within 30 days, then the CRA must remove the item from your credit report because it’s unverifiable information. The 30 days can be extended to 45 days if you send additional information within the 30-day period. If an item gets removed from your credit report, check to make sure it hasn’t reappeared later. 

Other Important Rights Under the FCRA

You have a right to know when a credit report has been used against you. For example, if you were denied a credit card or an apartment or you suffered any adverse action due to information on a consumer report, you have a right to know which report was used and get a free copy of the report.

You're protected from a creditor using your medical information to determine your eligibility for credit. Generally, this means the creditor can't use the fact that you have an ongoing medical problem to deny you credit. But, the creditor can deny credit if it sees you haven’t been paying your medical bills on time.

Identity Theft Protection

Congress passed the Fair and Accurate Credit Transactions Act of 2003 (FACTA) to add identity theft protection. You have the right to include a fraud alert on your credit report if you have a good-faith suspicion that you're the victim of identity theft. The fraud alert will notify users of your credit report that you're an identity theft victim. Fraud alerts are free. 

You also have the right to have a CRA block information related to identity theft from being on your credit report. For example, if an identity thief has used your information to open an account and never paid the bill, you can have this blocked from your credit report. Though you must meet some conditions. If the conditions are met, the CRA has four business days to block this information from being viewed by potential users of your credit report. These conditions include:

• You've supplied appropriate proof of your identity to the CRA.

• You've supplied the identity theft report from a federal, state, or local law enforcement agency.

• You identify the faulty information on the credit report.

• You provide a statement to the CRA explaining that you weren’t connected with the transaction(s) involving the identity theft.

Similar to the protections for identity theft, you're entitled to active duty alerts if you're in the military and on active duty. In this case, you'll be notified any time someone tries to obtain credit using your identity. Active duty alerts are free and last for one year.

How Long Can Negative Information Remain on My Credit Report?

Most information can't stay on your credit report forever. Most negative credit information will disappear after 7 or 7.5 years. Regular accounts are limited to 7 years. Collection accounts are allowed 180 days as regular accounts plus seven years as collection accounts.

The FCRA allows both Chapter 7 and 11 bankruptcies to be on your credit report for up to 10 years. But all three of the major credit bureaus currently remove Chapter 13 bankruptcy after seven years, while Chapter 7 bankruptcy remains your report for 10 years.

Judgments and liens can stay on your consumer report until the statute of limitations expires. For example, if a judgment is allowed 20 years for collection, it may stay on your credit report for up to 20 years. If the judgment can be re-filed at expiration for another 20 years, it may stay on your credit report for up to 40 years.

CRAs get most of their information from the furnishers/creditors. But, the CRAs may obtain public record information from their own searches of county records offices. CRAs get bankruptcy information from the bankruptcy court's PACER databases. Under the National Consumer Assistance Plan, the three major credit bureaus stopped reporting liens and judgments in 2017, but they can change this at any time without notice. Their original agreement stated they would not start reporting liens and judgments again before January 1, 2020, at the earliest. 

Federal student loans can stay on your reports until the loans are paid in full. There is no set time limit for these loans. This exception is from 20 USC §1087cc(c)(3), popularly known as the Higher Education Act.

Special Rules for Time Limits on Information for Some Credit Reports

Not all credit reports are subject to the 7-10 year limitations. Some credit reports may have all the credit information you have ever accumulated. The first set of rules involves loans of a particular size and the type of users. These rules don’t establish time limits on the information provided. This exception to the 7-10 year rule exists for:

• Credit transactions where the amount is reasonably expected to involve a principal amount of $150,000 or more. 

• Insurance companies underwriting life insurance policies where the face value is $150,000 or more.

• Reports sought by a prospective employer where the annual salary is reasonably believed to be greater than $75,000.

The other type of special report is more serious and can result in adverse effects for some people. These are credit reports that involve issues of national security. Everyone that is granted a government security clearance has their credit checked periodically. These reports aren't subject to any time limitations. Your entire credit history is available. The FBI sometimes performs these credit checks as part of their background checks. You can be denied a security clearance or have your clearance revoked if you have bad credit report information. 

If you work for a defense contractor, you're probably required to have a security clearance to keep your job. Some government employers will check your reports to see if your financial situation will make you susceptible to bribes from foreign agents and to determine if you're living beyond your means. They're usually only interested in old information if they see a long, unresolved pattern of bad financial practices.

Enforcement of the FCRA

You have the right to sue the furnisher and/or the CRA if you have disputed an inaccurate item on your credit report, but it isn't removed. You can also sue if it's removed but then reappears. You also have the right to sue any entity that violates your consumer rights under the FCRA.

There's a two-part statute of limitations for when you must file your FCRA lawsuit. It must be filed within five years of the date the disputed item was placed on your credit report. It also must be filed within two years of your discovery of the error on your report. If you have doubts as to when the error occurred, it's best to contact an attorney in your area.

The FCRA is a federal law, but your case can be filed in either state or federal court. You can recover the actual damages you suffered as a result of the error in your report. You can also recover punitive damages and the cost of your attorney's fees. Some FCRA cases have resulted in multi-million dollar verdicts.

You can also enforce your FCRA rights by filing a complaint with the CFPB or the Federal Trade Commission (FTC). Finally, your state's attorney general can also enforce your rights under the FCRA.

Let’s Summarize…

The FCRA provides many consumer rights. You have rights that restrict what can be in your consumer reports, who can view them, and how long information can remain on them. These rights exist so you’ll make sure your credit reports have the most accurate information. It’s important that you take advantage of these rights to ensure your access to credit. If you fail to take advantage of these rights, you may have difficulty with more than credit. It could be difficult to obtain some jobs or even to qualify to rent an apartment.