Fair Credit Reporting Act: Know Your Rights

Credit reports weren’t always the tidy, just-the-facts documents they are today. Before the Fair Credit Reporting Act was passed in 1970, they also included information about a borrower’s marriages, promotions, arrests and other personal details — and people often had no idea what was in their credit files.

Thanks to the fair credit legislation, credit reports went from being an aggregation of newspaper announcements to a highly regulated record of credit history. Now, you have the right to access your reports, and the information in them has to be accurate.

Here’s how the Fair Credit Reporting Act protects you and what you can do if you feel your rights have been violated.

What is the Fair Credit Reporting Act?

The Fair Credit Reporting Act is a federal law that’s designed to ensure the accuracy, fairness and privacy of information in credit reporting. It sets rules for how consumer reporting agencies — including credit bureaus and companies that compile medical records and tenant histories — should gather, share and use credit information.

The FCRA gives consumers certain protections, such as the right to access their credit scores and reports as well as to dispute inaccurate information.

What are your rights under the Fair Credit Reporting Act?

The Fair Credit Reporting Act gives you several important rights. You can read t​​he full text of the FCRA from the Federal Trade Commission. Here are the highlights:

You have a right to know what’s on your credit reports

Under the FCRA, you’re entitled to at least one free credit report per year from each of the three major credit bureaus — TransUnion, Experian and Equifax. But since the pandemic, the bureaus started offering free weekly access. Request your reports by using AnnualCreditReport.com.

By checking your credit report regularly, you’ll be able to see what your potential lenders see. You can also look for errors or outdated information that could be hurting your scores.

You have the right to freeze your credit reports

Freezing your credit reports can help protect you from fraud and identity theft. When you freeze your credit, you restrict creditors’ access to your report to prevent others from opening up credit in your name.

The FCRA entitles you to free credit freezes, also known as security freezes. Freezes will stay in place until you remove them.

You have the right to request your credit score

Consumer reporting agencies have to provide you with credit scores. However, unlike with credit reports, you aren’t guaranteed free access to your scores. That doesn’t mean paying a fee is necessary, though. You can get a free credit score from personal finance websites like NerdWallet.

You have a right to keep your information private

Although your credit can be checked in many situations — when you apply for credit, a job, utilities, student loans, etc. — it typically requires your consent. Your credit report can’t be distributed to a third party unless it’s related to a credit transaction, employment or court order.

Employers get a modified credit report. They must also get your written permission and notify you in writing if they use the information against you.

If you're turned down for credit, the entity that checked your credit history will send you an adverse action notice. The notice will explain what report was checked, the reasons your application was denied and further actions you can take.

You have a right to dispute errors

If your credit report includes incorrect or outdated information, you can file a dispute to have it removed. Credit bureaus generally have 30 days to investigate, and they must remove or correct inaccurate information.

If the report is updated as a result, you can request that the credit bureau notifies anyone who’s recently requested your credit report of the change. Even if they don’t make a change, you can ask for a letter of dispute to be included in your file. By doing this, future prospective lenders and employers will be able to see your side of the story.

You have a right to leave negative information in the past

Bankruptcies shouldn’t appear on credit reports after 10 years. Collections are only supposed to stay on your report for seven years — but even if they’ve passed their statute of limitations, debt buyers might still try to collect on the debt. Some debt buyers might re-age the debt, or change the date of delinquency on the account, in order to extend the statute of limitations. This practice violates the Fair Credit Reporting Act.

If your debts have been re-aged illegally, set the record straight by writing to the credit reporting company and the credit bureaus and attaching copies of supporting documents. If collectors don’t withdraw a wrongful re-aging, the FTC could fine them up to $2,500 per incident.

What to do if your rights have been violated

If you feel like creditors, employers or debt buyers are misusing your credit data, there are ways to get help:

• Contact the credit bureaus. Remember that you can file disputes with the bureaus regarding errors on your credit reports. 

• Submit a complaint with the Consumer Financial Protection Bureau.

• You may also consider taking legal action. You have the right to sue violators for damages and attorney fees.