What Law Covers Credit Reporting?

Congress passed the Fair Credit Reporting Act in 1970 and has since amended it to protect consumers from unfair credit reporting practices. The law works to ensure that the information included on your credit report is accurate and consistent between each of the three major credit reporting bureaus in the United States, including Experian, TransUnion and Equifax. The law also elevates identity theft crimes to felony level and improves the ability of a consumer to prove he is the victim of identity theft.

Rights

The Fair Credit Reporting Act requires anyone who denies you credit because of information on your credit report to inform you of your reason for denial, as well as offer you a free copy of your credit report. The law also entitles consumers with the right to a free annual credit report from each of the major credit bureaus. The Federal Trade Commission encourages consumers to use the annual report to search for inaccurate or inconsistent content.

Time Frame

Your creditors may not report old or outdated information to the credit bureaus. Consumer reporting agencies must remove negative collections, foreclosures and delinquent account information after seven years. Similarly, the law subjects bankruptcies and charged-off accounts to longer terms, capping the reporting time frame for such occurrences at 10 years.

Privacy

Your credit report contains information used by potential lenders to determine your credit worthiness. The Fair Credit Reporting Act limits who has access to view your report to those with a valid reason. In addition to potential lenders, your insurance company, landlord and employer can also obtain a copy of your credit report, though you must personally grant an employer access to your information via written consent.

Credit Report

The law entitles you to a free copy of your credit report every 12 months. To obtain your free report, you can call 1-877-322-8228, or mail an annual credit report request form to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. Your credit report is also available online, but beware of websites that advertise free credit reports, but require you to make additional purchases in order to obtain your report. Instead, visit the Annual Credit Report website (see Resources), a service of the Federal Trade Commission, to ensure access to a free credit report. Remember that you will only receive a copy of your credit report and not your FICO score, which you must pay for.

Disputes

The Fair Credit Reporting Act provides consumers with the right to protest inaccurate information. By law, each consumer reporting agency must investigate disputed information on your credit report and must remove information found as fraudulent or incorrect from your credit report within 30 days. If you suspect that you are the victim of identity theft, you can report the crime to each of the credit bureaus and place a temporary freeze on the opening of future credit accounts. Additionally, you may request up to two free credit reports within the 12 months following reports of identity theft on your credit report.