What is the Fair Credit Reporting Act?

Government building

The Fair Credit Reporting Act.

    The Fair Credit Reporting Act passed (FCRA)  originally in 1970. Combined with the Fair Debt Collection Practices Act (FDCPA) it forms the basis of consumer rights law in the United States.

The responsibility to enforce this lies on the Federal trade Commision (FTC) and the Consumer Financial Protection Bureau. It mostly deals with the protection of consumer data and information privacy.

The key points are:

1. There will be no secret databases used to make decisions about a person’s life.
2. Individuals have the right to see and challenge the information in such databases.
3. Information in such a database should expire after a reasonable amount of time.

The main database that collects such information and is used to make decisions about people’s life is the consumer report or “credit report”. It contains information about credit usage, repayment history and the status of your accounts. It contains such information as your credit limit, how much of your limit that you are using and whether a debtor or bill collector is collecting money owed money. They also contain rental repayment information if you rent your home. Also, it contains public records such as tax liens and bankruptcy.