The Fair Credit Reporting Act (FCRA) (15 U.S.C. § 1681 et seq.) regulates the collection, dissemination and usage of consumer credit information.
Under the FCRA:
1. You must be told if information in your file has been used against you;
2. You have the right to know what is in your file (free file disclosure: if a person has taken adverse action against you because of information in your credit report; victim of identity theft and placed a fraud alert in your file; file contains inaccurate information as a result of fraud; on public assistance; unemployed but expect to apply for employment within 60 days; one free annual report);
3. You have a right to ask for a credit score (but have to pay for it);
4. You have a right to dispute inaccurate or incomplete information;
5. Consumer Reporting Agencies (CRAs) must correct or delete inaccurate, incomplete, or unverifiable information (usually within 30 days);
6. CRAs may not report outdated negative information;
7. Access to your file is limited;
8. Your consent must be given for employer access to your records;
9. You may limit “prescreened” offers of credit;
10. You may seek damages from violators.
Under the FCRA, Consumer reporting agencies (CRAs) are entities that collect and disseminate information about consumers for credit evaluation and other related purposes. CRAs must:
1. Verify the accuracy of information disputed by a consumer. Tell CRA in writing what information you believe is incorrect. The CRAs must investigate the information, usually within 30 days, unless the request is considered frivolous. They must forward all relevant data you provide to the information furnisher. After the information furnisher investigates, the CRA must provide you the written results and a free copy of your report if the dispute results in a change.
2. May not reinsert negative information if removed following a consumer’s dispute unless the information provider verifies its accuracy and completeness and the CRA gives you written notice that includes the name, address, and phone number of the provider.
3. May not retain negative information beyond the allowed period (typically 7 years, but bankruptcies for 10 years and tax liens for 7 years from time paid, criminal convictions without limitation, information in response to a job application with a salary of more than $75,000 without time limitation, information due to an application for more than $150,000 worth of credit or life insurance has no time limit, Lawsuit or unpaid judgment for 7 years or until statute of limitations whichever is longer).
4. If a reinvestigation does not resolve your dispute, you may include a statement of dispute in your file and in future reports. If you request, the CRA will also provide the statement to anyone who received a copy of the old report in the recent past, usually for a fee.
Information furnishers are companies that provide information to CRAs. These are normally creditors such as credit card companies, auto companies, banks, courts, employers, bonders. Information furnishers must:
1. Provide complete and accurate information
2. Investigate disputed information and correct errors or explain why the report is correct within 90 days of receipt of notice of a dispute. It must investigate, reviewing all relevant information provided by the CRA, and report the results to the CRA. If the information is inaccurate, it must inform the CRA so that the information will be corrected.
3. Inform consumers about negative information which has been or is about to be placed on a consumer’s credit report within 30 days. The notice can be on the consumer’s monthly statement if conspicuous.
Required wording before placing negative information: We may report information about your account to credit bureaus. Late payments, missed payments, or other defaults on your account may be reflected in your credit report.
Require wording after placing negative information: We have told a credit bureau about a late payment, missed payment or other default on your account. This information may be reflected in your credit report.
Consumers are authorized by the Fair and Accurate Credit Transactions Act to receive one free credit report each year. This report can be obtained via annual credit report.
A consumer may file in federal or state courts for violations of the act. The statute of limitations is the earlier of 2 years from discovery and 5 years from the violation. Under 15 U.S.C. § 1681n, a consumer may recover either actual damages or a minimum of $100 and a maximum of $1000 plus punitive damages and reasonable attorney’s fees and costs for willful noncompliance with the Act. Under 15 U.S.C. § 1681o, a consumer may recover actual damages plus attorney’s fees for a negligent violation.
The FCRA is enforced by the Federal Trade Commission and the States. Iowa Code Chapter 538A covers Credit Services Organizations and provides for violations of state code as serious misdemeanors (statute of limitations is 4 years after date of execution of contract)or for damages plus reasonable attorney's fees and court costs (statute of limitations is 10 years after the date of execution of the contract). The Credit Repair Organizations Act, 15 U.S.C. 1679 et seq, covers credit repair organizations.
The three major CRAs are:
Equifax: PO Box 740241, Atlanta, GA 30374-0241, 800-685-1111 equifax
Experian: PO Box 2104, Allen, TX 75013, 888-397-3742 experian
Trans Union: PO Box 1000, Chester, PA 19022, 800-916-8800 transunion
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