What is Fair Credit Reporting Act (FCRA)

Fair Credit Reporting Act (FCRA), a federal law, was enacted in 1970 and updated in the late-1990s/early-2000s to protect consumers against credit information being misused.

FCRA was initially enforced by FTC (Federal Trade Commission), but enforcement has been transferred to CFPB (Consumer Financial Protection Bureau), which was established in July 2011 to address the financial crisis of 2007-2008. It unifies all government-facing financial protection agencies into one single umbrella.

This broad law's most relevant component is the FCRA Summary Of Rights. It outlines the credit protections FCRA offers consumers.

What Is The FCRA Summary Of Rights And What Are Their Rights?

The FCRA Summary Of Rights protects consumers against adverse actions based on credit history. This includes credit reporting agencies, employers mortgage lenders, and insurers. The FCRA Summary of Rights provides the following protections for mortgage lending:

Tell Us If You Have Had Your Credit History Used Against You

A lender may use your credit report to decide whether to approve or deny your loan application. The lender must inform you and provide the name, address, and telephone number of the agency that provided the credit data. Every lender runs credit histories and scores from Equifax, TransUnion, and Experian. A standard lender disclosure under FCRA will give you information about how to reach each entity.

Ask For Your Credit Score

When you submit a formal application to mortgage lenders, your credit score will be disclosed to you. This includes providing your name, address, and social security number for the lender to run a credit report. Your lender will then be able to disclose your credit score to you. It's critical to note that lenders aren't required to disclose your entire credit report to you, but a different provision of FCRA -- called the Fair and Accurate Credit Transaction Act (FACTA), which was added to FCRA in 2003 -- mandates that you're allowed to get a free credit report every year through AnnualCreditReport.com. The free credit report includes your entire credit history, but not your credit score. For more information, see the FACTA credit report overview.

Incomplete, Incorrect, Or Out-Of-Date Information Can Be Disputed

Report any incomplete, incorrect, or out-of-date information to the consumer reporting agency. Unless your dispute is unfounded, the agency will investigate. For information on dispute procedures, visit the Learn More website of the CFPB. Equifax, Experian, and TransUnion must correct, or remove inaccurate, incomplete, unverifiable, or outdated information when you dispute. After verifying that the information you are disputing is accurate, incomplete, or unverifiable they must either correct it or delete it from your file, usually within 30 working days. A consumer reporting agency cannot report any negative information older than seven years or bankruptcies older than 10 years.

You Have The Option To Request Your Name Be Removed From Marketing Lists

Equifax, Experian, and TransUnion can provide consumer lists of addresses and names whose credit information matches those of lenders and insurers in order to make their marketing lists. You can ask Equifax, Experian, and TransUnion to not share your information with creditors or insurers by calling 888-5 OPT-OUT. Your mortgage lender can request that you be removed from their proprietary marketing lists.