Fair Credit Reporting Act: a guide to your rights

US law guarantees you can fix credit report mistakes; recent changes make it easier

Kelly Dilworth
Personal finance writer
Specializing in new trends in credit

Fair Credit Reporting Act: a guide to your rights

It's not always easy to correct errors on your credit reports. However, don't give up just yet: You have a decades-old law on your side that requires credit reporting agencies and data providers to correct their mistakes -- and recent changes make it easier.

The Fair Credit Reporting Act was enacted in October 1970, just as consumer credit was exploding -- and so was the power of the private companies that keep track of consumers' payment behavior. Credit reporting agencies, once small and local, were consolidating to create a national credit reporting system, and the law offered a consumer-friendly counterweight to keep the playing field even.

"As laws go, the Fair Credit Reporting Act is a pretty strong one," says Cary Flitter, a consumer lawyer and law professor in Philadelphia. Per the law, credit reporting companies -- as well as the data furnishers that give them the information they file -- are required to follow a strict set of guidelines, fix mistakes and are legally on the hook if they fail to do so.

That said, "there are little pitfalls the consumer has to navigate," says Flitter, so it's important to be your own best advocate. If you're not quite sure what your rights are when it comes to your credit information, here are six things you need to know about the Fair Credit Reporting Act (FCRA) -- and how you can use it to protect yourself.

1. You have the right to know what's in your credit reports.

You can access a free copy of each of your generic credit reports -- which contain information about how you have handled credit in the past -- from the three biggest credit bureaus (Experian, Equifax and TransUnion) by writing to them or through the Web at AnnualCreditReport.com.

You are also entitled to a free annual copy of any reports that are compiled about you by , such as CoreLogic, LexisNexis and Certegy Check Services. These agencies keep records of financial data not tied to a loan -- such as your rental payments, insurance claims or check-writing history -- and sell them to landlords, banks, insurance representatives and others considering doing business with you. 




2. Access is limited to your credit report.



  • A court has ordered that the credit information be shared.


You have the right to dispute information that is not accurate.

--    Paul Stephens   
   Privacy Rights Clearinghouse   








Beginning in September 2016, the credit bureau must also provide you with an additional free report through AnnualCreditReport.com if it corrects an error on your report. That way, you can check to make sure all the information is correct.

Starting in September 2018, credit bureaus will also be required to send you a detailed report after an investigation is complete outlining what the investigation found and what steps you can take if you're unhappy with its findings. The notices will also provide you with the contact information of the data furnishers supplying the misinformation so you can initiate an additional dispute.

Sometimes credit bureaus and data furnishers will mistakenly verify information that you know is inaccurate, forcing you to send a second dispute. However, recent changes to the credit report dispute process should make that less likely.

In March 2015, the credit bureaus agreed in a settlement with the New York State Attorney General to overhaul the bureaus' dispute resolution process and conduct more thorough investigations of mistakes resulting from identity theft or mixed up credit report files. The credit bureaus also agreed to change their reporting practices in order to lessen the number of inaccuracies that appear on consumers' reports and monitor data furnishers more aggressively. In June 2015, the credit bureaus also struck a deal with 31 states to bolster their dispute resolution and credit reporting procedures and end deceptive practices, such as trying to sell products to consumers who have called about an inaccuracy.

Consumer advocates who have previously criticized the credit reporting agencies for conducting perfunctory investigations say the new rules should make it easier for consumers to successfully dispute errors on their reports.  

"We're hopeful," says Chi Chi Wu, a staff attorney with the National Consumer Law Center. However, you should still take precautions when initiating your dispute, she says. "The disputes should be in writing. Don't make them over the telephone," she says. Include as much information as possible in your dispute and attach supporting evidence. As of September 2015, credit reporting companies must take a closer look at any documentation you provide if an initial investigation doesn't find a mistake.

Credit reporting companies allow you to upload supporting documentation online. But Wu recommends mailing your dispute by certified mail instead. That way, you have a clear paper trail showing that the credit bureau received your dispute and you have clear evidence of what it received, she says. It's also important to mail your dispute if a credit bureau inserts an arbitration clause in the online dispute agreement, barring you from taking the credit bureau to court. 

If, after sending multiple disputes, you feel like you're getting nowhere, consult a lawyer experienced in these cases, says Wu. You are entitled under the Fair Credit Reporting Act to seek legal action. You can also file a complaint with the Consumer Financial Protection Bureau after you've submitted an unsuccessful dispute. 

4. Negative information on your credit report is subject to a time limit.
You can't dispute accurate negative information. However, you can make sure that the adverse information in your report is limited to the time frame set out by the Fair Credit Reporting Act. "The general rule is if there's something negative on your credit report, it's supposed to drop off after seven years," says Stephens. "One exception to that is bankruptcy. Bankruptcy can stay on your credit reports for 10 years."

Consumers never should send in their disputes online. Always in writing, [by] certified mail.

--    Chi Chi Wu 
   National Consumer Law Center 

Occasionally, debt mistakenly gets re-aged, says Stephens, so make sure you watch out for debts that are older than 7 years or bankruptcy listings that are more than a decade old.

5. You have the right to know if you've been passed over because of information in your report.
Creditors and employers are also required by the FCRA to notify you if they've rejected you or taken some other kind of adverse action (such as a higher interest rate) based on information in your report. That way, you can make sure that the information they're using to judge you is correct. "They don't want people being denied a job or a promotion based on a credit report and the credit report has false or misleading information," says Flitter.   

6. You have the right to place a red flag on your credit report if you think your information has been compromised.
The Fair Credit Reporting Act also gives you the power to exert at least some control over your credit report if you think your personal information is in danger from fraud or identity theft. "One of the rights that a consumer has under the FCRA is the right to place a fraud alert on their credit report," says Stephens. The fraud alert won't lock down your credit report the way a credit freeze will. Anyone with a permissible purpose, such as a credit card lender, will be able to still see the credit report. However, it will let lenders know that they need to double-check your identity before they give you extend you credit. "It warns the creditors to take extra precautions," says Stephens.  

The free fraud alert will last for 90 days, but it can be renewed indefinitely, he adds.

Don't stop checking your reports
Finally, once you have determined that your credit information is safe and your reports are error-free, continue to periodically check them to make sure the information is still accurate and your data hasn't fallen into the wrong hands. A mistake can turn up at any time and sometimes errors that were corrected once will show up again. "Obtain a current credit report and get one at least once a year," says Flitter. "That's the first thing everyone can do for himself or herself."  

See related: The truth about 7 common credit report mythsGetting your file from a specialty reporting agency

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Updated: 02-24-2018