Fair Credit Reporting Act

    The purpose of the Fair Credit Reporting Act (FCRA) is to ensure that information contained on a consumer's credit report is accurate so as not to adversely affect the individual's ability to obtain credit.  The FTC has a website about the FCRA.  Another law related to credt reporting is the Fair and Accurate Credit Transactions Act of 2003(FACTA).  This law adds to FCRA, including everyone's right to obtain a free credit report once a year from each of the credit reporting agencies.  Presently, in order to do this, you must go to http://www.annualcreditreport.com. 

    Credit reports are used widely for several reasons.  The primary reasons, considered legitimate purposes for the utilization of credit reports is: to determine whether credit should be extended to an individual, for purposes of employment, if a subpoena is submitting requesting the credit report, for underwriting insurance, for a legitimate business purpose, in response to any writting instructions given by the consumer, and a few other purposes provided by FCRA.  The purpose of allowing consumers free copies of their credit report once a year from each agency is to help in the prevention of identity theft which is an ever increasing problem.  FACTA also added to FCRA, the ability to prevent fraudulent entries on credit reports from reappearing on a credit report once the information has been deleted.

    If you obtain a copy of your credit report and discover information that is inaccurate or false, it is essential that you contact both the credit reporting agency and the creditor reporting the information to dispute this information (see FCRA for requirements for the credit reporting agencies in investigating inaccuracies in credit reports).  The credit reporting agency is not going to remove the information solely due to your dispute of the information.  However, you can have a fraud alert put on your credit report if you believe you are the victim of identity theft.

    If an entity requests an investigative consumer report about you, it is required that you are notified of this before the consumer report can be compiled and given to the requestor.  Also, adverse information about you cannot be included in a subsequent the report without being verified for accuracy first.  If inaccurate information that is adverse to you shows up on your credit report, the credit reporting agency is in violation of FCRA.