Fair Credit Reporting Act

Fair Credit Reporting Act Related Information:

The Fair Credit Reporting Act (FCRA) which is enforced by the Federal Trade Commission is designed promote accuracy in credit reporting and to ensure the privacy of information used in reports. The following items were found when writing this act:

• The banking system is dependent upon fair and accurate credit reporting and unfair reporting undermines public confidence
• The mechanism for evaluating credit worthiness is an elaborate one
• Consumer reporting agencies play a vital role
• Responsibilities are exercised with respect the customer’s privacy

The Fair Credit Reporting Act states that a consumer reporting agency can only produce a report for the following reasons and no other:

• A court subpoena with jurisdiction or before a Federal grand jury
• Written permission from the consumer to generate the report
• Extension of credit or collection of an account
• Used for employment purposes
• Underwriting insurance
• Legitimate business transaction

The act also makes sure that obsolete information cannot be reported which includes bankruptcy more than 10 years, suits and judgments over 7 years or past the statute of limitations, paid tax liens over 7 years, records or arrest or convictions over 7 years, and any other adverse information over 7 years old.

This act ensures that all individuals are treated fairly and the system is not subject to tampering. Every credit bureau has to follow these regulations and before providing information the requesting party must identify themselves, the reason the information is requested and guarantee it not be used for any other purpose. Information can be disclosed to consumers if they appear in person and present proper identification, by telephone with proper id, other by other means as long as id is properly presented. These methods ensure proper disclosure of the information to only individuals authorized to have access.