Fair Credit Reporting Act Requirements

For a society to function, the banking system needs to be fair and accurate. Mistakes can cost both the individual and the system as a whole, if the information provided in inaccurate. Public trust gets undermined. The credit reporting agency system is a massive network designed, with the aid of the Fair Credit Reporting Act, to run efficiently and honestly. A series of requirements are in place to keep the reporting agencies operating at high trust levels.

Restrictions

One of the requirements of the Fair Credit Reporting Act is restricting access to a person's credit reports. Court orders can require any of the three major agencies to provide the credit history, but in most other circumstances, permission has to be given by the individual. This is why when a person fills out a job application, he usually also signs a document authorizing the potential employer to gain access to his credit history.

Identity Theft

With identity theft becoming a worldwide problem, one requirement of the Fair Credit Reporting Act that isn't widely known is the "one call" notification to the credit bureaus. If a person (or someone working on his behalf) suspects that either identity theft or potential identity theft is taking place, calling any of the three major bureaus gets a flag put into the file for a period of 90 days. This will act as a means of keeping inaccurate or false information from being put into someone's credit report.

Free Report

Another requirement found within the Fair Credit Reporting Act is for each of the three major credit bureaus to provide (at no charge) a copy of a person's credit report every 12 months. The person requesting the report can either obtain all three reports at the same time or he can space them out however he wishes. Upon reviewing the credit reports, if any inaccuracies are found, the three agencies are required to correct those mistakes and to provide updated credit reports to the individual and anyone who had requested the credit history of that person within the past two years.

Adverse Action

If any information in a credit report causes a damaging action to be taken against a person, that person must be notified by the credit reporting agency. Adverse action consists of more than simply being denied credit. It also includes being denied employment or being denied insurance. The person has the right to contest any wrong information provided by the reporting agencies.

Pre-screening Offers

Consumers who do not want to have any companies be given access to their credit histories in order to get "pre-screened" offers for credit cards, insurance and similar products can call the National Opt-Out Hotline (1-888-567-8688). All three credit bureaus are required to keep the consumer's information from being used for solicitation purposes.