The Fair Credit Reporting Act (FCRA) was passed in 1970 and has since seen many changes, and with the general public becoming more reliant on the internet to shop, conduct banking, and complete financial transactions, the FCRA Law today has become more relevant.
You will discover that ‘accuracy’ and ‘fairness’ is used throughout the FCRA law when discussing credit reporting.
The financial system and the credit and lending process in America depends greatly on accurate and fair credit reporting of consumer credit information, as the alternative undermines the essential function of the financial system and deteriorates the confidence of the general public.
Systems have been developed for the purpose of evaluating the creditworthiness, credit capacity, character, and the general reputation of consumers.
Credit Reporting Agencies (CRAs) such as Equifax, Experian, and TransUnion play a critical role in evaluating a consumers creditworthiness and the FCRA was created to insure that CRAs exercise their responsibilities with an abundance of fairness, impartiality, and a great respect towards a consumers right to privacy.
The FCRA further defines how CRAs, data furnishers (Creditors & Lenders), employers, and other entities can use, collect, access, and share consumer data.
The FCRA is enforced by the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB)
The FCRA outlines clear regulations to ensure that consumer’s credit information is protected and fairly and accurately reported and to clearly define how a consumer can protect themselves when their rights are violated.
The Fair Credit Reporting Act is a serious law and has very long teeth, as the impact on a consumers credit report can have extreme consequences, such as:
- Approval or Denial for Credit Cards, Car Loans, Mortgages, Apartment Rental
- High or Low Interest Rates
- The Length of Repayment Terms
- Insurance Rates
- Employment Opportunities
The Fair Credit Reporting Act (FCRA) is the primary law that upholds your rights as a consumer and protects you from the Credit Reporting Agencies (CRAs) from having unverifiable, inaccurate, or incomplete information reported on your credit report.
On the next page we are going to break down how the FCRA protects you as a consumer, and by doing so, you may be able to identify any potential violations to your personal credit report by the Credit Reporting Agencies or by other entities who may have accessed your credit file.
CLICK ON: How Does the FCRA Protect You as a Consumer
