Fair Credit Reporting Act (“FCRA”)

The purpose of the Fair Credit Reporting Act, or “FCRA” is to promote the fairness, accuracy, and privacy of information in consumer reporting agencies’ files.

First, and foremost, the FCRA requires that an individual be informed that outcome which is adverse to the individual’s interest occurred as the result of a credit report. Adverse outcomes include: (1) denial for credit, (2) denial for employment; and (3) denial of insurance. If an adverse action has been taken because of your credit report, you must be informed of all the pertinent information about the agency that generated the report.

Next, an individual is entitled to know what information the credit reporting agency provides about them. The individual is entitled to a free credit report if: (1) someone has taken an adverse action against the individual based on a credit report, (2) an individual has been the victim of identity theft and has made the proper notifications, (3) the individual’s credit report is inaccurate as the result of fraud, (4) the individual is on welfare; and (5) if the individual is presently unemployed, but plans to apply for work within sixty (60) days.

Additionally, individuals have the right to dispute inaccurate information in their credit report. Once they dispute the accuracy of their credit report, the credit reporting agency is required to either inform the individual that their claim is frivolous, or conduct a reasonable investigation into the matter. If the credit reporting agency determines that there is inaccurate, incomplete, or unverifiable information in the individual’s credit report, the agency is obligated to correct or delete that information within thirty (30) days.

Further, credit reporting agencies are generally prohibited from reporting debts that are more than seven (7) years old, or bankruptcies that are more than ten (10) years old.

Finally, it should be noted the in the bankruptcy context, FCRA violations are increasingly common. The basis for this is a split of opinion in the 9th Circuit (this includes California) of whether a debt can be reported between the filing of a chapter 7, or chapter 13, bankruptcy, and the ultimate discharge of those debts. Another common issue is how credit reporting agencies report debts that were included in a Chapter 13 repayment plan. The details of those issues are beyond the scope of this article, and will be addressed in the future.

If you, or someone you know, has had their rights violated under the FCRA, we urge you to contact us today for a free initial consultation.