If you’ve ever disputed information on your credit report, you may have come across a statement like this: “This information has been reviewed and meets FCRA requirements.” But what does that mean?
It simply means that the credit bureau has followed all the rules and regulations set forth by the Fair Credit Reporting Act (FCRA). They’ve verified the information in your credit report, and they’ve ensured that the data is accurate and up-to-date.
But what exactly are the FCRA requirements? Most importantly, what does it mean for you? This article will provide a basic overview.
What are FCRA requirements?
The FCRA requirements are connected to the Fair Credit Reporting Act (FCRA). This is a set of federal laws that govern how CRAs (credit reporting agencies) operate. CRAs are businesses or organizations that collect and maintain consumer credit information.
What is the purpose of the FCRA?
The FCRA is a federal law that was enacted in 1970 to protect consumers from inaccurate and unfair credit reporting.
It sets forth rules and regulations for CRAs, including how they must go about collecting and verifying your credit report. It also determines what should be included in consumer information reports. Specifically, the FCRA requires credit furnishers to:
- Maintain accurate credit reports
- Follow reasonable procedures to ensure the accuracy of the information in your report
- Give you access to your credit report
Additionally, it also spells out your rights as a consumer, like the right to dispute information on your credit report.
However, just because the credit bureau claims that your information meets FCRA requirements doesn’t mean you have to take their word for it.
What can I do if my credit report contains inaccurate information?
If you believe there is inaccurate information on your credit report, you have the right to dispute it.
CRAs like Experian, Transunion, and Equifax offer consumers the ability to dispute information on their credit reports. You can file a customer complaint online, over the phone, or by mail. All the information you need can be found on the credit bureau’s website.
After you’ve filed a dispute, the CRA must investigate the information. The dispute may be handled independently(by the bureau) or collectively(by the bureau and the furnisher of the information).
How FCRA requires CRAs to handle Credit report dispute
If you dispute information on your credit report, the FCRA requires credit reporting agencies to conduct a reasonable investigation into the disputed information. The credit bureau must also update the report noting that the information is disputed by the consumer and that the matter is being investigated according to FRCA requirements.
If the credit bureau determines that the disputed information is inaccurate, it must remove the information from your credit report. It must also notify all three nationwide credit reporting agencies so that they can correct the information in your credit report.
What is the average time for a dispute to be removed from your credit report?
After you have disputed information on your credit report, it typically takes the credit bureau 30 days to investigate the matter. When the bureau determines that the disputed information is inaccurate, it must remove the information from your credit report.
What must creditors have before pulling a credit report?
The creditor must provide the credit score used in the risk-based pricing notice by the credit decision-maker. FCRA-compliant credit scores are most often obtained from consumer reporting agencies.
Who is responsible for enforcing FCRA?
The Federal Trade Commission (FTC), state attorneys general, and the Consumer Financial Protection Bureau (CFPB) are all responsible for enforcing FCRA. These three entities work together to ensure that CRAs comply with the FCRA.
Does the FCRA cover criminal background checks?
The FCRA does not explicitly address criminal background checks. However, the Act requires employers to comply with certain provisions when conducting any background check on a potential employee. This includes ensuring that the candidate has given consent for the assessment to be conducted, informing the candidate of any adverse findings, and taking into account any information that may be considered mitigating factors.
It is thus illegal to use criminal background information as the sole basis for rejecting a job candidate. However, if you decide to reject a candidate based on criminal background information, you must follow the FCRA’s additional requirements for doing so.
What is a consumer reporting agency under the FCRA?
A consumer reporting agency (CRA) is a business that collects and maintains information on consumers, including credit history, employment history, insurance claims, and other financial information. CRAs sell this information to creditors, employers, insurers, and other businesses that use it to make decisions about consumers.
What legal questions can your creditor ask you?
A creditor can ask you a number of questions to determine your creditworthiness. These questions may include your current and past addresses, employers, and length of employment. A creditor can also ask about your monthly housing expenses and other debt obligations.
Is there a private right of action under the FCRA?
The FCRA does not provide a private right of action to a party who believes that their obligations under the Act have been violated while using a consumer report. This means that individuals cannot sue credit reporting agencies or creditors for alleged violations of the FCRA. However, they can file a complaint with the FTC, state attorney general, or CFPB.
Will my dispute affect my credit score?
No. A dispute will not affect your credit score. The credit bureau will only investigate the information you have disputed and will not consider the dispute when calculating your credit score. However, if the credit bureau determines that it is inaccurate after investigating the information, the bureau must remove it from your credit report.
Who is exempt from the FCRA?
The FCRA does not apply to certain entities, including federal, state, and local governments, credit unions, and banks. These entities are not subject to the FCRA’s requirements for obtaining consumer reports or providing risk-based pricing notices.