The Fair Credit Reporting Act
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Credit scores: They’re not just for credit decisions
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any more. It used to be that these scores were the
Last Update 5/12/05 province of mortgage lenders and credit card
companies. Now, insurance companies, wireless-
service providers, and even employers are using credit scores to decide on what
rates to charge, with whom to deal, and even whom to hire. Some municipalities
are even reporting overdue library books and parking violations to consumer
reporting agencies. In short, credit scores are important, and they can change
your financial life.
In response to the growing use and importance of credit scores, Congress
passed the Fair Credit Reporting Act, and has strengthened the Act through a
number of amendments over time. The Act focuses on consumer reporting
agencies – the companies1 that collect consumer credit information and develop
credit scores. The Act is intended to promote accuracy, fairness, and privacy of
information used by consumer reporting agencies. The Act gives consumers a
number of important rights to obtain information about and dispute inaccuracies
in their credit files.
The Fair Credit Reporting Act is at 15 U.S.C. § 1681 et seq.
Important Rights Under the Act
Rights to information. The Act provides consumers with two important
rights to information. First, the law provides that you have the right to know that
a credit report was the basis for an adverse employment, credit, or insurance
decision. The user of the credit information must also provide you with the
name, address, and phone number of the agency that provided the information.
See 15 U.S.C. § 1681m.
Second, the law provides that – even without any adverse action – you have a
right to know the information about you contained in the files of a consumer
reporting agency. You have the right to obtain a copy of that information. In
fact, once a year, you may obtain the information for free from each of the
three credit reporting agencies. See 15 U.S.C. 1681j.
To obtain a free copy of your credit information, you can (1) go to
www.annualcreditreport.com; (2) call 1-877-322-8228; (3) fill out the form at
Also referred to as credit agencies.
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www.ftc.gov/bcp/conline/include/requestformfinal.pdf and mail it to Annual
Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281; or (4)
go to http://www.lsnv.org/Free_Credit_Report_Index.pdf.
Right to dispute inaccurate information. Not only does the Act
provide you with the right to know the information in your credit file, it also gives
you the right to dispute inaccuracies in that information. Suppose, for instance,
that you paid off a loan but it still appears in the report. Perhaps there is a report
by a credit card company that you failed to make timely payments, but your
records show otherwise. You can dispute this type of information, and the Act
sets forth a procedure for such disputes. See 15 U.S.C. § 1681i.
To initiate a dispute, write to the credit reporting agency. Your letter should:
1. identify the information that you believe is inaccurate;
2. state the facts and explain why you believe the information is inaccurate;
3. provide copies (not originals) of documents (e.g., billing statements) that
show the information to be inaccurate; and
4. request that the agency remove the inaccurate information.
You may include a copy of your credit report with the disputed items circled.
Send your letter by certified mail. (The Federal Trade Commission has sample
letters at its website. See
Whenever a consumer disputes the accuracy of any information in the
consumer’s file, the Act requires the credit reporting agency to conduct a
“reasonable reinvestigation” to determine the accuracy of the information or
delete the information within 30 days (45 days if you provide further information
during the 30 day period). See 15 U.S.C. § 1681i(a)(1)(A). The agency must
also, within 5 days, notify the provider of the disputed information (e.g., the
credit card company that reported late payments). See 15 U.S.C. §
If the agency, after reinvestigation, determines that the dispute is frivolous or
irrelevant, the agency must notify you. This finding may, for instance, be caused
by your failure to provide sufficient information for the agency to investigate the
dispute. The notice must state (1) the reasons for the determination and (2)
identify any information it needs to conduct the investigation. See 15 U.S.C. §
If, however, the agency finds that the disputed information is “inaccurate or
incomplete or cannot be verified,” it must (1) delete or modify the information in
your file and (2) notify the provider of the information (e.g., the credit card
company). See 15 U.S.C. § 1681i(a)(5)(A). Such information cannot be
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reinserted unless the provider of the information certifies that it is complete and
accurate. The agency must notify you of a reinsertion; notice must be in writing,
sent within 5 days, and provide the name and address of the information
provider. See 15 U.S.C. § 1681i(a)(5)(B).
Whatever the result of a reinvestigation, the agency must notify you of the
outcome and provide: (1) a statement that the reinvestigation is complete and
(2) a consumer report based on the revised information. See 15 U.S.C.
§ 1681i(a)(6)(B). If the disputed information was deleted from your file, you may
request that the agency furnish notifications of the deletion to anyone you
designate that has received your consumer report within the last six months (or
two years if used for employment purposes). See 15 U.S.C. § 1681i(d).
If the resolution of your dispute is not satisfactory, you have several rights.
1. You have the right to request a description of the investigation. See 15
U.S.C. § 1681i(a)(7).
2. You have the right to add a statement to your file summarizing your
dispute regarding the accuracy of the information. See 15 U.S.C. §
3. The consumer reporting agency must include your statement in any
subsequent report (unless there are reasonable grounds to believe that
the dispute is frivolous or irrelevant). See 15 U.S.C. § 1681i(c).
In addition, you may also raise your dispute directly with the creditor that
provided the information that you believe is inaccurate.
Rights to damages. The Act also provides that you have the right to
obtain damages from anyone who fails to comply with the requirements of the
Act. If the failure is willful, you may be entitled to actual damages caused by the
failure (or statutory damages between $100 and $1000), punitive damages,
costs of suit, and attorneys fees. See 15 U.S.C. § 1681n. If the failure is due to
negligence, you may be entitled to actual damages caused by the failure, costs
of suit, and attorneys fees. See 15 U.S.C. § 1681o.
The author, Sean P. Gates, is an attorney in Washington D.C. and can be
reached at mailto:email@example.com
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