Fair Credit Reporting Act (FCRA)

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Fair Credit Reporting Act (FCRA) is a fundamental piece of legislation from 1970 that regulates both consumer reporting agencies and credit reports. It applies to information reported on individuals concerning their credit such as: information collected, used, or expected to be used to evaluate eligibility for credit, insurance, and employment; assessment of risks and review of consumer accounts; certain government licenses or benefits and determinations regarding child support; any criminal history; other business transactions involving a consumer in their role as consumer.

The FCRA dictates how and when consumer reporting agencies may give consumer reports. Except for government entities and a few other exceptions, all entities seeking a consumer report must have that individual’s consent before consumer reporting agencies may release such information. This includes banks, credit companies, employers, and insurers. 

The Act also requires credit reporting agencies to show the consumer the information in their report. Consumer reporting agencies must provide a free credit report once every year, and they must alert the consumer if their information was used to deny eligibility for credit. Also, the consumer reporting agencies must keep the report up to date, including deleting information after set periods of time in the FCRA. 

See: 15 U.S.C. § 1681 et seq16 CFR Subchapter F - Fair Credit Reporting Act

[Last updated in December of 2022 by the Wex Definitions Team]