The Fair Credit Reporting Act: what you need to know


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The Fair Credit Reporting Act protects your interests by governing how credit reporting agencies collect, protect and share your information. The FCRA includes provisions on who can request your credit report and how you can access it.

The legislation was created in 1970 to promote fairness, confidentiality and accuracy in how credit was reported. Over the decades, it has been modified and expanded to provide more comprehensive credit reporting protections, especially as problems with identity theft have increased. Since it covers so many financial tools and services – from loans to credit cards and mortgages – it’s helpful to understand how this law works.

“Two protections that are most useful to consumers are provisions to ensure that consumer information included in a credit report is accurate and a set of provisions that explain how a consumer can protect themselves in the event of theft of identity,” says Adam Ragan, a partner at law firm Fox Rothschild.

How the Fair Credit Reporting Act Works

Credit reporting agencies compile reports containing sensitive information about consumers’ financial history. These details may include how quickly your credit card payments and what types of loans you have outstanding. This information is useful for proving your creditworthiness in various contexts, but at the same time, you don’t want it to be available to just anyone.

The FCRA benefits lenders, consumers, and credit reporting agencies by holding these organizations accountable for the accuracy and completeness of reports.

“The Fair Credit Reporting Act is an increasingly relevant and useful tool from a consumer perspective,” says Ragan. “Consumers often learn about the FCRA because of data breaches and alerts, as well as the credit protections they’ve been enrolled in. But many consumers still struggle to understand the ins and outs of the process. ”

What do credit bureaus do?

The three best known credit reporting agencies are Experian, TransUnion and Equifax, although there are other credit reporting related companies that are smaller and specialize in areas such as rental history records. These agencies collect information and compile a history of your credit usage in your credit file. Everything from on-time mortgage payments to credit card balance transfers could affect your credit report.

This report helps prospective lenders assess the level of risk they are taking in extending additional credit to you. Others, such as landlords and employers, can use this report to understand your reliability and economic risk history, as they build relationships of trust by extending you a rental lease or job offer.

The Federal Trade Commission and the Consumer Financial Protection Bureau work together to enforce various components of the FCRA, which limit what information can be shared with credit reporting agencies and what they can share with anyone who requests your Credit Report. It also gives you access to your credit information and helps you dispute errors that are hurting your credit.

How the FCRA protects you

Although the full text of the FCRA is available online, it is long (and dense). However, the main provisions you need to know are quite simple. They are this:

1. You are entitled to a free credit report every year

One of the great things about the FCRA is that each of the three credit reporting agencies will provide you with a free credit report each year. The best way to access this service is to use And, right now, thanks to COVID-related improvements, this site is offering free weekly access to your credit report. Some sites offer free credit reports just to request payment later. Do not pay for a service that you can receive for free.

This access is tied to your broader right to know what’s on your credit file. The FCRA protects these rights, making access to your own credit history easier and more transparent.

If you want more than one credit report per year, the FCRA sets a maximum limit of $13 per additional report, so keep that in mind.

2. You can dispute errors on your credit report

If your credit rating is low due to an error on your report, you are not obligated to accept this score. You can provide evidence to refute the error – for example, showing that you made all payments on a loan or that you never missed a payment on a credit card. As you can imagine, keeping all documents associated with loans and credit cards in a safe place is an important step to take so that you can eliminate any mistakes on your credit report in the future.

Credit bureaus are required to assess the evidence you provide in a dispute and contact related entities such as lenders who provided this information. The FCRA also stipulates that they must restore your credit report if they find an inaccuracy due to the dispute. Most reports don’t contain errors, but they happen often enough that it’s worth checking if you’re surprised by a low score.

Sometimes the information is not inaccurate, but outdated. The FCRA sets rules on how long a credit reporting agency can include past negative information on your reports. In many cases, negative information can no longer be communicated after seven years or, in the case of bankruptcy, after 10 years. If you find accurate information on your report that is outdated, you can submit a dispute.

3. Employers need your written consent to extract your credit information

Credit reporting agencies, in most cases, must seek your permission in the form of written consent before give credit information to an employer or potential employer. This can give you a little more control over the information shared during a job search.

4. If your credit application is denied, you have the right to know why

Most people don’t think much about their credit score and report until they’ve been turned down for a loan or credit card application. If you are surprised by a denied credit application, you have the legal right to hear why they denied your application. It’s actually a way people find out about errors in their credit reports, so make sure you understand why you were denied credit. While this is not a mistake, this information can still help you make good decisions to increase your credit score in the future.

5. You have the right to freeze your credit and seek redress in the event of identity theft

Identity theft has become easier with the prevalence of the Internet. High-profile data breaches, such as 2017 Equifax data breach, highlight the need for continued vigilance and consumer protections. A person’s credit could be ruined by someone fraudulently trying to obtain loans or credit cards in their name.

“In 2018, a new provision put in place a policy to provide free safety gels,” Ragan explains. “A credit freeze is useful because it will prevent most companies from accessing your credit report until you request the freeze be removed.”

Although security freezes can be removed by credit bureaus in isolated cases and all current creditors can still have access to your credit information, this protection makes it easier to take immediate action if you realize that your information was part of a data breach.

In addition, the FCRA has special provisions for victims of identity theft, most of which you can access after initially getting an impersonation report.

“A great resource for consumers is the FTC’s website,,” says Ragan. “There is a step-by-step process by which a consumer can generate a report. This PDF may help borrowers obtain some of the FCRA’s specialized relief.”


Does the FCRA regulate banks and credit card issuers?

The FCRA regulates the information that credit reporting agencies can collect and share, as well as the types of information that banks and credit card issuers can share with these reporting agencies.

How can I get a free copy of my credit report?

Normally, you can request a free copy of your credit report once every 12 months through the website, the only authorized source for these reports. Right now, though, you can request a free copy every week, thanks to COVID-related benefits.

How do I dispute an error on my credit report?

You can file a dispute online, by phone or by mail. The Consumer Finance Protection Bureau offers step-by-step instructions on how to write your letter, including a sample letter template, and offers information for contacting Equifax, Experian, and TransUnion separately, as some errors may occur on just one or two of your credit reports.

Each credit reporting agency has similar information on their websites. Beware of organizations that claim to “fix your credit” but want to charge a fee, because disputing an error on your credit report should be a free process provided directly by the credit reporting agency.

Read more: How to dispute an error on your credit report

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