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FCRA Credit Reporting Regulation

United States

1970

Consumer Protection

Overview

The Fair Credit Reporting Act (FCRA), enacted in 1970, is a U.S. federal law that promotes the accuracy, fairness, and privacy of consumer information contained in the files of credit reporting agencies (CRAs). It regulates how consumer credit data is collected, shared, and used by lenders, employers, insurers, and others.

FCRA grants individuals the right to access their credit reports, dispute inaccuracies, and request corrections. It limits the use of credit reports to permissible purposes such as lending, employment, and insurance underwriting. The law is enforced by the Federal Trade Commission (FTC), the Consumer Financial Protection Bureau (CFPB), and state attorneys general.

This regulation applies to banks, credit bureaus, lenders, collection agencies, insurance providers, and employers using credit reports for decision-making.

Key Obligations

Credit bureaus must ensure accuracy and investigate consumer disputes
Users of credit reports must obtain consumer consent and disclose adverse actions
Consumers are entitled to a free annual credit report from each major CRA

Sensitive data such as bankruptcies must be removed after a fixed period
Employers must provide notice and get permission before using a report for employment
Entities must follow procedures for data security and permissible use

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FAQ

What is the purpose of the FCRA?

To ensure that credit reporting is accurate, fair, and used only for legally permitted purposes.

Who enforces FCRA compliance?

The FTC, CFPB, and state attorneys general are responsible for enforcement.

How can consumers dispute inaccurate credit information?

They can file a dispute with the credit bureau, which must investigate and respond within 30 days.

Are employers allowed to use credit reports for hiring?

Yes, but only with written consent and after providing a pre-adverse action notice.