Fair Credit Reporting Act
15 U.S.C. §§ 1681–1681xThe Fair Credit Reporting Act governs the accuracy of consumer reports, the procedures for disputing errors, and the privacy of credit information. It imposes duties on credit reporting agencies and on the companies that furnish information to them, regulates employment background checks, and provides specific tools for identity theft victims.
What It Covers
The FCRA is the core federal law regulating the consumer reporting system. It applies to the three nationwide credit bureaus, specialty reporting agencies like tenant screening and background check companies, and the banks, collectors, and other businesses that furnish data about consumers to those agencies. The statute requires credit reporting agencies to follow reasonable procedures to assure maximum possible accuracy, to investigate consumer disputes within set timeframes, and to delete or correct information that cannot be verified.
The FCRA also regulates who can access consumer reports and for what purposes, with additional protections layered on top of employment screening. A prospective employer cannot pull a background check without written disclosure and consent, and cannot take adverse action based on that report without first providing a pre-adverse action notice and a copy of the report to the applicant.
For identity theft victims, the statute provides a specific blocking mechanism that requires credit bureaus to remove information resulting from identity theft once the victim submits a police report or identity theft report. When credit bureaus or furnishers violate these duties willfully or negligently, the FCRA gives consumers a private right of action for actual damages, statutory damages, punitive damages, and attorney's fees.
Key Provisions
- § 1681e(b) Duty of credit reporting agencies to follow reasonable procedures to assure maximum possible accuracy of the information in consumer reports.
- § 1681i Reinvestigation duty triggered by a consumer dispute, generally completed within 30 days of receipt.
- § 1681s-2(b) Furnisher's duty to conduct its own investigation after receiving notice of a dispute from a credit reporting agency.
- § 1681m Duties of users who take adverse action based in whole or in part on information in a consumer report.
- § 1681j(b) Right to a free consumer report within 60 days after receiving an adverse action notice.
- § 1681c Obsolete information rules, including the 7-year limit for most negative items and 10-year limit for bankruptcies.
- § 1681c-2 Block of information resulting from identity theft once the consumer submits an identity theft report.
- § 1681b(b) Employment-purpose disclosure and written consent requirements before an employer may procure a consumer report.
- § 1681n / § 1681o Civil liability for willful and negligent noncompliance, including actual, statutory, and punitive damages and attorney's fees.
- § 1681p Statute of limitations: 2 years from discovery of the violation, and no later than 5 years after the violation occurred.