Consumer Rights Under the Fair Credit Reporting Act

Madeleine Jones
November 8, 2016

customer sign in a bubble, consumer rightsThe Fair Credit Reporting Act provides multiple protections to consumers for the information that is contained in their credit reports with the three major credit reporting agencies, smaller credit bureaus, and specialty agencies. Under the law, creditors that report information to the credit reporting agencies and the credit reporting agencies themselves must follow some strict guidelines and correct their mistakes. If they fail to do so, the consumers whose rights have been violated may file lawsuits against them. It is important for Nevadans to understand what their rights are under the FCRA and to make certain that the information that is contained in their reports is accurate.

Right to Know if Information Used Against Them

When consumers apply for credit and are denied, they have the right to know whether information that is contained in their credit files was used against them. Consumers who have been denied credit will be notified by mail about the decision, and they then have the right to get a free copy of their reports so that they can review them.

Right to Get Copies of Credit Files

Consumers have a right to know what information is contained in their credit files and to get copies of them. All people are entitled to receive one free copy of their reports once each year by going to annualcreditreport.com. In addition, consumers may get free copies of their reports if any of the following apply:

  • When adverse action is taken based on the information in the report
  • When consumers are victims of identity theft and have placed fraud alerts on their files
  • When consumers are unemployed and will be applying for work within 60 days
  • When consumers are receiving public assistance
  • When there is inaccurate information contained in the files because of fraud

When consumers get copies of their credit files, it is important for them to review them carefully in order to look for any inaccurate information.

Right to Dispute Wrong Information

Consumers are allowed to dispute information that they identify in their credit reports that are wrong or incomplete. As long as the dispute is not frivolous, the agencies must then investigate the disputed information and complete their investigations within 30 days. If the information cannot be verified, the agencies must delete it. If the agencies learn that the information is wrong, it must be updated so that it is accurate. Agencies are allowed to continue reporting any information that they verify as accurate.

Old Information Cannot be Reported

There are time limits that apply to negative information appearing on credit reports. Agencies may not report negative information that is more than seven years old for most debts. They may not report bankruptcies that are 10 or more years old.

Right to Ask For Credit Scores

Credit scores are numerical scores indicating the creditworthiness of consumers. Each major credit reporting agency has its own credit score. The scores range from 350 to 850, and the higher the scores are, the better the person’s credit is judged to be. Consumers should ask for their credit scores from Experian, TransUnion and Equifax when they get copies of their credit reports so that they can see how the information that is contained in their reports is affecting their scores.

Credit File Access Is Limited

Under the Fair Credit Reporting Act, only certain persons who are deemed to have valid needs can access the credit reports of others. Credit reporting agencies are not allowed to give out information to parties other than those that have valid needs for it. The parties who do have valid needs include those who need to make a determination about an application such as a landlord, creditor, insurer or employer. Employers may only be given access to the file if the applicants have given written consent to access their credit files. There is an exception for the trucking industry, however.

Right to Opt Out

Consumers have the right to opt out of receiving pre-screened offers of credit. When they receive unsolicited offers, the offers must include information about how the recipients can opt out from the lists on which the offer was based. Consumers may also opt out with the credit reporting agencies by calling 1-888-5-OPTOUT.

Right to Recover Damages

When consumer rights under the Fair Credit Reporting Act have been violated, the consumer has a right to file a lawsuit against the breaching entity. The potential defendants in an FCRA lawsuit may include the credit reporting agency, a party that uses the credit reports or a party that submits information to the agency. A debt attorney may analyze the facts in order to determine the appropriate parties that should be named as defendants in a resulting lawsuit. A lawsuit may be filed in either state or federal court so that the victim might recover compensation for the losses.