What is the Fair Credit Reporting Act (FCRA)?

By Jackie Beck   Updated 07/02/2022 at 2:54 pm

The federal Fair Credit Reporting Act (FCRA) is a law that’s meant to protect your information and rights. It uses rules to control the kinds of information about you that can be accessed, and who is allowed to see it.

When Did It Become Law?

The Fair Credit Reporting Act originally became law on 10/26/1970, when it was signed into law by President Nixon. It became law as part of Public Law No. 91-508, an act to “amend the Federal Deposit Insurance Act to require insured banks to maintain certain records, to require that certain transactions in United States currency be reported to the Department of the Treasury, and for other purposes.”

That law amended the Consumer Credit Protection Act by adding “Title VI—Consumer Credit Reporting”. It gave it a short title of the Fair Credit Reporting Act.

The original purpose was to “require that consumer reporting agencies adopt reasonable procedures for meeting the needs of commerce for consumer credit, personnel, insurance, and other information in a manner which is fair and equitable to the consumer, with regard to the confidentiality, accuracy, relevancy, and proper utilization of such information in accordance with the requirements of this title.”

Effective Date and Amendments

It took effect on April 25, 1971, 180 days after the date it was enacted.

Since then the law has been updated over the years to make things clearer and to add more requirements.

Major amendments took place in:

  • 1996 when the Consumer Credit Reporting Reform Act passed
  • 2003 with the passage of the Fair and Accurate Credit Transactions Act (FACT Act)
  • 2010 when Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act)

There have been multiple smaller changes to the act as well over the years.

How Does the Fair Credit Reporting Act Work?

The Fair Credit Reporting Act is a federal law that promotes the accuracy, fairness, and privacy of information in the files of consumer reporting agencies (CRAs).

The law regulates CRAs that gather and give out information about people’s creditworthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living.

For example, the act says that credit reporting agencies can provide information for credit, insurance, employment, tenant, or background screening purposes, plus some government and law enforcement purposes.

It says that they can’t give it out to just anyone for any reason, and they’re supposed to keep it safe.

What Rights Does the Act Give?

The act gives you quite a few rights relating to your credit and personal information.

You can learn about your rights under the Fair Credit Reporting Act here.

These rights can have a big impact on you, so be sure to check them out.

What Happens if Someone Violates the FCRA?

If someone violates the Fair Credit Reporting Act, the Federal Trade Commission (FTC) and/or a state can start a lawsuit in a district court of the United States.

The court can enforce penalties & damages, and may include attorney’s fees and costs.

You might also be able to get an injunction, which would require the person or company to stop violating the FCRA.

Other agencies may be able to get involved as well. If you have a complaint, contact the FTC.

In Summary

The Fair Credit Reporting Act is a law that’s meant to protect your information and rights. It uses rules to control what kind of information about you can be accessed, and who is allowed to see that information.

If you’re curious about exactly what the FCRA says, you can view the complete text of the law here.

What is the Fair Credit Reporting Act (FCRA)?

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