What is the Fair Credit Reporting Act (FCRA)?

Below is a summary of the FCRA. The full Act can be obtained directly from the Federal Trade Commission's web site .

Fair Credit Reporting Act (Summary)

Public Law 91-508

The Fair Credit Reporting Act (FCRA) allows a consumer to challenge the information on his credit report on the basis of "completeness and accuracy." If, after a reinvestigation by the credit bureau, the disputed information "is found to be inaccurate or can no longer be verified, the [credit bureau] shall promptly delete such information."

The credit bureaus are required to complete the investigation within a "reasonable period of time." This period has been set at thirty days.

The credit bureaus can ignore the consumer dispute if they have reason to believe that the dispute is "frivolous or irrelevant." The FTC commentary on the FCRA cites, as an example of a frivolous dispute, a dispute wherein the consumer challenges all negative items on his credit report without providing any allegations regarding specific items in the credit file. However, "A [credit bureau] must assume a consumer's dispute is bona fide, unless there is clear and convincing evidence to the contrary."

When a consumer challenges a negative credit listing on the basis of extenuating circumstances, such as health problems, divorce, job loss, etc., the credit bureaus apparently feel that they are entitled to ignore that dispute.

When a consumer submits a dispute which is neither frivolous nor irrelevant by credit bureau standards, the credit bureau must "at a minimum... check with the original sources or other reliable sources of the disputed information and inform them of the nature of the consumer's dispute." In some cases of consumer dispute, "Reinvestigation and verification may require more than asking the original source of the disputed information the same question and receiving the same answer."

From our experience, most people quickly discover that the process can be troublesome and time consuming.

In theory and law, the process is deceptively simple, thus leading many people to believe that they can easily handle this themselves "for the price of a few postage stamps." From our experience, most people quickly discover that the credit bureaus often make the process troublesome and time consuming. In these cases, many seek the assistance of a credit repair firm.

Your Six Basic Rights under The Fair Credit Reporting Act
1. You, the consumer, have the right to challenge the accuracy of your credit report any time.

2. The credit bureaus must reinvestigate anything you challenge without a charge.

3. The credit bureaus must reinvestigate within a reasonable amount of time. 30 days constitutes a "reasonable amount of time" unless the bureau notifies you otherwise (so keep accurate records).

4. If the credit bureau finds an error in the challenged item, they must delete or correct that information in your files immediately.

5. If the credit bureaus cannot or do not confirm the challenged item within 30 days, they must delete that information from your files immediately.

6. You have the right to submit a Consumer Statement of your view of the problem. If you, as a credit consumer, dispute the accuracy of certain information in your credit report and it is verified by the creditor as correct, then the credit bureau is required to include your explanation of your dispute, if you request, in your credit report. Limit your explanation to no more than 100 words.
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