Fcra Compliance

Written by Kimberly Clark
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The Fair Credit Reporting Act (FCRA) was originally enacted in 1971 and subsequently amended in 1997 and 2003. The law was originally passed to enable consumers to learn what information is contained in their credit reports and to dispute any erroneous information. In addition, the law ensures that all the information contained in an individual's report is kept confidential and that it can only be accessed by outside sources after they've obtained the proper authorization.

The FCRA guarantees consumers several rights. Failure to comply with the rules and regulations can results in stiff penalties or civil lawsuits for a credit reporting agency (CRA) or any other violator. Compliance with the FCRA is enforced by the Federal Trade Commission (FTC).

A Consumer's Rights under the FCRA

Under the FCRA, a person must be informed if they were denied credit, employment or insurance because of information listed in their credit report. Plus, any adverse action an individual experiences because of information contained in their credit reports entitles that person to a free report from the CRA whose information the decision was based on. Any incorrect or outdated information discovered must be removed from the credit file.

If a consumer suspects that their report contains inaccurate or fraudulent information, they can request that the CRA conduct an investigation. When this happens the CRA is required to investigate the item in question. The CRA must also place a note, in the credit report, next to the disputed items and provide the consumer with regular updates on the status of the investigation.

The FCRA also states that a person's credit report must list all inquiries made into their credit history. The report must contain both those authorized by the consumer as well as any unauthorized ones. Furthermore, a consumer has the right to have their names removed from any lists the CRA sells to outside creditor to generate unsolicited credit offers.

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