Credit Bureau Reporting Guidelines

The Fair Credit Reporting Act (FCRA), which was amended on July 21, 2010, set forth a standard that credit bureaus and banks had to use when reporting credit issues. Under the new guidelines, consumers had more protection and greater access to their credit history as well as recourse for any areas that were incorrectly reported. The FCRA set forth guidelines that all three major credit bureaus must follow.

Purpose

The purpose of having guidelines for credit bureaus is to ensure that there is both fairness and accuracy in the credit reporting process for an individual. Since many financial institutions rely upon credit reports in order to make various decisions, it's important to make sure that the credit bureaus are doing their jobs correctly.

Benefits

The benefits of the guidelines are found in such areas as forbidding credit bureaus from reporting information that is derogatory but is out of date. Prior to the FCRA, old bankruptcies and old credit card debts could remain on a credit report until the bureau elected to remove them. Under the new law, all outdated information has to be removed. Another benefit of the Fair Credit Reporting Act set of guidelines is that credit bureaus are now able to be sued in the event they are violating the guidelines that have been set forth.

Protection

In order to guarantee the safety of the consumer's credit, the new guidelines prohibit credit reporting agencies from divulging any credit information without the consumer's permission. Before the guidelines were put in place, a business could pay a fee and get access to credit files. These businesses would then seek out those individuals who were having problems with their credit and then offer them special programs that would enable them to borrow money at high interest rates. If a company is found in violation of the new guidelines, they can be fined by the Federal Trade Commission.

Access

Under the new guidelines, an individual is entitled once a year, at no charge, to receive a copy of their credit report from any or all three major credit bureaus. The individual can request it either via telephone, online or through the postal system. However, although the credit report provided once a year is free, if an individual wants to know their credit score, there is an extra charge for that.

Repair

If an error is found on a credit report, under the new credit bureau reporting guidelines, that error has to be corrected once it has been verified as being outdated or incorrect. In addition, a copy of the amended credit report must be provided to the individual and copies must also be provided to any agencies that have requested that individual's credit report within the past 2 years.