FCRA Requirements Related to Accuracy and Privacy of Information

1. Accuracy of Information:

• Reasonable Procedures: Consumer Reporting Agencies (CRAs) are required to follow reasonable procedures to assure the maximum possible accuracy of the information concerning the individual about whom the report relates.

• Disputed Information:

  • If the accuracy of any information in a consumer's file is disputed by the consumer and the consumer notifies the agency directly, the agency must reinvestigate the item in question, usually within 30 days.
  • Unless the agency believes the dispute is frivolous or irrelevant, it must record the current status of the disputed information or delete it from the file.

• Notification of Dispute: Once the reinvestigation is complete, the CRA must give the consumer written results of the reinvestigation with a free copy of the report if the dispute results in any change. If the information is found to be inaccurate or can no longer be verified, the CRA must promptly delete it.

2. Privacy of Information:

• Limitations on CRAs:
  • CRAs can't provide a consumer report to any party that lacks a permissible purpose, such as credit transactions, employment, insurance underwriting, licensing, government benefit approval, or any other legitimate business need.
• Opt-Out Rights:
  • Consumers have the right to opt out of unsolicited offers of credit or insurance by using a toll-free telephone number.
• Disclosure to Consumers:
  • Upon request, CRAs must clearly and accurately disclose all information in the consumer's file at the time of the request, including the sources of the information and certain recipients of the consumer’s report.
• Identity Theft Protections:
  • Consumers have the right to place "fraud alerts" in their credit files, which warn potential creditors that they might be a victim of identity theft.
  • Consumers can request and obtain a free credit report once every 12 months from each of the three nationwide CRAs through AnnualCreditReport.com.

3. Furnishers of Information:

• Accuracy Obligations:
  • Those who provide information to CRAs (furnishers) have specific obligations under the FCRA to provide accurate information. They must not furnish information they know or believe to be inaccurate.
• Duty to Correct and Update:
  • Furnishers must correct and update inaccurate information. They also must notify CRAs when an account is voluntarily closed by the consumer.
• Duty to Investigate:
  • If a consumer disputes the accuracy of information directly with the furnisher, the furnisher must investigate the dispute and report its findings back to the consumer.

4. Negative Information:

• Time Limitations:
  • Most negative information (like late payments) must be removed from consumer reports after seven years. Bankruptcies have a longer period and can remain on the report for up to ten years. Tax liens and certain other adverse items also have extended periods.