The Fair Credit Reporting Act of 1970 is a piece of legislation that governs the collection, dissemination, and use of consumer credit information. Guidelines set forth in the act serve to protect consumers from fraudulent or incorrect credit information reporting.
The act is best known for enabling consumer rights when it comes to the files that credit reporting agencies hold on them. In accordance with FCRA, credit reporting agencies must:
- Provide consumers with a copy of their credit reports on request (though they may charge for delivering the requested copy).
- Notify consumers when negative information that has been removed from their reports is re-entered onto the report.
- Remove past credit items in a reasonable amount of time. The exact length of time an entry can stay on a credit report varies by state.
The FCRA also lays out guidelines for the companies that provide information to credit reporting agencies. Those guidelines including providing accurate information, investigating disputes in a timely manner, and notifications to the consumer when negative information is about to be put on their credit report.