FAIR CREDIT REPORTING ACT
The Fair Credit Reporting Act (FCRA) is legislation embodied in title VI of the CONSUMER CREDIT PROTECTION ACT (15 U.S.C.A. § 1681 et seq. [1968]), which was enacted by Congress in 1970 to ensure that reporting activities relating to various consumer transactions are conducted in a manner that is fair to the affected individual, and to protect the consumer’s right to privacy against the informational demands of a credit reporting company.
FCRA represents the first federal regulation
of the consumer reporting industry, covering all
credit bureaus, investigative reporting compa-
nies, detective and collection agencies, lenders’
exchanges, and computerized information
reporting companies.
The consumer is guaranteed several rights
under the FCRA, including the right to a notice
of reporting activities, the right of access to
information contained in consumer reports, and
the right to the correction of erroneous infor-
mation that may have been the basis for a denial
of credit, insurance, or employment. When a
consumer is denied an extension of credit,
insurance, or employment owing to informa-
tion contained in a credit report, the consumer
must be given the name and address of the
credit bureau that furnished the credit report.
Consumers are also entitled to see any report
that led to a denial, but agencies are not required
to disclose risk scores to them. Risk scores (or
other numerical evaluation, however named)
are assigned by consumer reporting agencies to
help clients interpret the agency’s report. Credit
agencies may not report adverse information
older than seven years or bankruptcies older
than ten years.
The provisions of the FCRA apply to any
report by an agency relating to a consumer’s
creditworthiness, credit standing, credit capac-
ity, character, general reputation, personal char-
acteristics, or mode of living. The FCRA covers
information that is used or expected to be used
in whole or part as a factor in establishing the
consumer’s eligibility for one of four purposes:
(1) employment; (2) credit or insurance for per-
sonal, family, or household use; (3) government
benefits and licenses to operate particular busi-
nesses or practice a profession; and (4) other
legitimate business needs. Under the FCRA, an
agency may also furnish a report in response to
a court order or a federal GRAND JURY sub-
poena, to a written authorization from the con-
