The Fair Credit Reporting Act of 2005

Creditors typically pull a consumer's credit report when the consumer requests a loan, credit card or line of credit. Since creditors use this information to determine a consumer's creditworthiness, it is important that credit reports are accurate. The Fair Credit Reporting Act, initially passed into law in 1970 and updated through 2010, ensures that creditors report accurate information, credit bureaus protect a consumer's privacy and consumers have the right to know what is in their credit report.

Information in a Credit Report

A consumer's credit report can contain details of his credit history, including open and closed credit accounts, payment history and amount of debt owed. Credit reports can also contain information about adverse actions taken against a consumer, such as collection accounts, judgments and liens. Information about bankruptcy cases is also reported. Typically, the credit bureaus can report this information for seven years, or 10 years in the case of bankruptcy. Older information must be deleted from a credit report.

Disclosing a Credit Report

Creditors, financial institutions and other parties have limited access to a consumer's credit report under the Fair Credit Reporting Act. Generally, a creditor can only request a copy of a consumer's credit report if it intends to do business with the consumer. Employers can request a copy of an employee's credit report if the employee gives her employer written permission to do so. State and local child support agencies can also request a credit report.

Consumer Disputes

Consumers have the right to request a copy of their credit report and their credit score from the credit bureaus any time. If a creditor denies a consumer credit, the creditor must supply the consumer with a written letter stating why the application was denied and information on how the consumer can obtain a free copy of his credit report. If the consumer finds inaccurate information in his credit report, he has the right to dispute the information with the credit bureau. The credit bureau must investigate all consumer claims within 30 days.

Exceptions

Active duty military personal have different rights under the Fair Credit Reporting Act. For example, an active duty military officer can request that an Active Duty Alert be placed on his credit file. The credit bureaus must notify any creditor requesting the officer's report about the alert for at least 12 months, according to the Federal Trade Commission. The credit bureaus must also exclude anyone with an Active Duty Alert from pre-approval credit offers.