Credit Bureaus / Agencies
Credit bureaus, also called credit reporting agencies, are companies that collect and maintain consumer credit information then resell it to other businesses in the form of a credit report. They’re all publicly-traded, for-profit companies—they’re not owned by the government. The government does, however, have legislation—the Fair Credit Reporting Act (FCRA)—that regulates how these and other credit bureaus can and must operate.
In the U.S., there are three national credit bureaus – Equifax, Experian and TransUnion – that compete to capture, update and store credit histories on most U.S. customers. While most of the information collected on consumers by the three credit bureaus is similar, there can and often times are differences.
The Fair Credit Reporting Act (FCRA) is a federal law that details how consumer credit information can be collected, given out, and used. Under the FCRA, consumers have a right to view the information in their credit file and to dispute inaccurate information. The Federal Trade Commission (FTC) publishes the full text of the FCRA. As a consumer, you should be aware of your rights.
FCRA Rules for Consumer Reporting Agencies
The FCRA defines consumer reporting agencies as companies who collect credit information about consumers for the purpose of selling the information to third parties.
The best-known examples of consumer reporting agencies are the three major credit bureaus: Equifax, Experian, and TransUnion. However, they are not the only consumer reporting agencies in the U.S. In January 2018, the Consumer Financial Protection Bureau published a list of almost 50 different companies that self-identify as consumer reporting agencies. The FCRA rules for credit reporting applies to these agencies as well.
Under the FCRA, credit bureaus and other consumer reporting agencies are required to:
Provide you with a copy of your credit file at your request. You’ll have to provide personal identifying information so the credit bureau can confirm that you’re the person requesting your credit report. In these instances, the credit bureaus have to provide you a free copy of your credit report:
- Once annually through the centralized website annualcreditreport.com
- A business has taken adverse action (denied your application or charged a higher interest rate) because of information in your credit report
- You are unemployed and planning to look for a job within the next 60 days
- You are on welfare
- You have been a victim of identity theft
- Your credit report contains inaccurate information resulting from identity theft
The FCRA also outlines the consumers rights regarding:
- Investigating / disputing inaccurate information
- Correcting or deleting inaccurate information
- Limiting access to your file
- Allowing you opt-out of pre-screened credit offers
- Providing employers with a credit report
- Providing consumers with a copy of their credit score
Requirements for Information Furnishers
The FCRA applies to more than just credit bureaus. The businesses which provide information to the credit bureaus, information furnishers, also have obligations. For instance, they:
- Cannot report inaccurate information
- Must promptly update and correct any inaccurate information previously provided to the credit bureaus
- Must tell you about any negative information reported to the credit bureaus within 30 days
- Must let the credit bureaus known when you voluntarily close an account
- Must have a procedure for responding to identity theft notices sent by the credit bureaus
- Cannot report accounts that you have previously reported were the result of identity theft
You have the right to dispute inaccurate credit report information directly with the information furnished in writing. After receiving your dispute, the creditor must notify the credit bureau of your dispute and is not allowed to continue reporting inaccurate information until it has investigated your dispute.
Requirements for Businesses Who Use Your Credit Report Information
Companies may request to see your credit report if they have a permissible purpose, for example, to grant credit to you after you’ve submitted an application. The FCRA requires that these businesses:
- Let you know when you’ve been turned down because of information in your credit report
- Provide you with the name and address of the credit bureau who supplied the report used in the decision to turn you down.
Dealing With FCRA Violations
whether it’s the credit bureau, an information furnisher, or a user of your credit report information, you have protection of rights under the FCRA,