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Your credit is one of your most valuable possessions. It affects your ability to buy a house, get insurance or find a job. The Fair Credit Reporting Act (FCRA) protects your right to privacy and have accurate information presented in credit reports.
A credit reporting agency collects information about you, puts it into a credit report and sells the report to lenders, insurance companies and employers. It’s up to you to ensure that it’s accurate and up to date.
Credit Report Uses
The Fair Credit Reporting Act (FCRA) regulates consumer credit reports and consumer reporting agencies that are also known as credit reporting agencies or credit bureaus.
The law sets out the responsibilities of credit reporting agencies and your rights to ensure that the information collected about you is accurate and is disclosed to you and only to creditors, insurance companies and employers for the following purposes:
- To determine your eligibility for credit or insurance for personal, family or household purposes
- To determine your eligibility for certain employment actions including hiring, promotions, demotions, transfers, discharges and other employment decisions
- To determine your eligibility for residential or apartment leases and mortgages, refinancing, and equity loans
- To determine child support payment ability
- To determine your eligibility for government licenses and public benefits
- To determine your eligibility for a business transaction that you applied for or sought to pursue
- To assess your prepayment and credit risk that are associated with a current obligation
Credit Report Types and Content
Credit bureaus issue two types of reports: A standard consumer report and investigative consumer report.
A consumer credit report usually contains the following personal and public information:
- Name, age and Social Security number
- Home and work or business addresses and any previous addresses
- Marital status, spouse’s name and number of children
- Your job and estimated income
- The value of your cars and home
- Bank accounts
- Credit accounts including payment history and credit limits
- Mortgages and other financial information
- Tax liens, bankruptcies and court judgments
- Anyone who requested your credit report within the last two years
- Your credit worthiness; that is, your credit score or credit rating
An investigative credit report is an expanded version of the standard credit report and is often requested by insurance companies, landlords and employers who want the following:
- Character information including arrests, indictments and convictions
- General reputation information
- Information about your personal characteristics
- Information on your mode of living
Information in an investigative report must be that which can only be acquired by investigators conducting personal interviews with your family, friends, neighbors, associates and such. All information must be verified. You must also have given your consent for the investigation before an investigative report can be sent to the requestor.
Protecting Your Rights
Before getting too alarmed at this invasion of privacy, the FCRA provides these protections:
- You have a right to a full disclosure of the contents of your credit file
- You have a right to request your credit score
- You have a right to dispute incomplete or inaccurate information
- You have a right to have incorrect, incomplete, unverified or outdated information corrected or removed from your file
- You have a right to know if and when an adverse action was taken against or if you were denied credit, insurance or employment based on the contents of a credit report
- You have a right to opt-out or to remove your name from unsolicited offers of credit and insurance
You’re entitled to a free credit report every 12 months or when you’re denied credit, credit report is used to take adverse action against you, your credit is damaged by fraud, unemployed or on public assistance.
If you believe that a credit reporting agency or supplier or user of information has violated any of their responsibilities under the FCRA, you can file a complaint with the Federal Trade Commission or consult an attorney about filing a lawsuit.
Questions for Your Attorney
- How can my credit report be used?
- Who can obtain my credit report?
- What information does a consumer credit report contain?