Frequently Asked Questions about Credit

• What is the Fair Credit Reporting Act?
• Was I denied credit because of a "bad credit report"?
• How do I locate the Consumer Reporting Agency that has my file?
• Do I have the right to know what the report says?
• Is this information free?
• What can I do if the information is inaccurate or incomplete?
• What can I do if the Consumer Reporting Agency won't modify the report?
• Do I have to go in person to get the information?
• How long can Consumer Reporting Agencies report unfavorable information?
• Can anyone get a copy of the report?
• Do I have to be told before a creditor increases my periodic interest rate?
• If I am denied credit, do I have to be told why?
• What if I think a Consumer Reporting Agency has violated my rights under the law?

• Summary of your rights under the Fair Credit Reporting Act
• Liability for FCRA violations

1. What is the Fair Credit Reporting Act?

If you've ever applied for a charge account, a personal loan, insurance, or a job, someone is probably keeping a file on you. This file might contain information on how you pay your bills, or whether you've been sued, arrested, or have filed for bankruptcy.

Companies that gather and sell this information are called "Consumer Reporting Agencies" or "Credit Bureaus." Some people may refer to these companies as "Credit Reporting Agencies" or CRA's. The information sold by Consumer Reporting Agencies to creditors, employers, insurers, and other businesses is called a "consumer report." Consumer reports generally contain information about where you work and live and about your bill-paying habits.

In 1970, Congress created a law which gives consumers specific rights in dealing with Consumer Reporting Agencies. The Fair Credit Reporting Act protects you by requiring that Consumer Reporting Agencies furnish correct and complete information to businesses for use in evaluating your application for credit, insurance, or a job.

2. Was I denied credit because of a "bad credit report"?

If you applied for and were denied credit, the Equal Credit Opportunity Act requires the creditor who denied you credit to tell you the specific reasons for your denial. For example, the creditor must tell you whether the denial was because you have "no credit file" with a Consumer Reporting Agency or because the Consumer Reporting Agency says you have "delinquent obligations." This law also requires that creditors consider, upon your request, additional information you might supply about your credit history. If you have negative information on your credit report that is not correct or complete you should contact the credit reporting agencies to try to fix your credit report.

3. How do I locate the Consumer Reporting Agency that has my file?

If your application was denied because of information supplied by a Consumer Reporting Agency, the company that denied your application must provide you with the name, address and telephone numbers of the Consumer Reporting Agency. Otherwise, you can find the Consumer Reporting Agency that has your file by calling those listed in the Yellow Pages under "credit" or "credit rating and reporting." Since more than one Consumer Reporting Agency may have a file about you, call each one listed until you locate all agencies maintaining your file. Telephone numbers for the three major consumer Reporting Agencies, Equifax, Experion and Trans Union can be found on the Evaluating Credit Injury page on this website.

4. Do I have the right to know what the report says?

Yes, if you request it. The Consumer Reporting Agency is required to give you all the information in your report and, in most cases, the sources of that information. However, the Consumer Reporting Agency is not required to reveal any credit rating or risk evaluation. You also have the right to be told upon request the name of anyone who received a report on you in the past 12 months, and you may also request the address and phone number of each such person. (If your inquiry concerns a job application, you can get the names of those who received a report during the past two years.) The Consumer Reporting Agency will also provide you with a written summary of your rights under the Fair Credit Reporting Act.

5. Is this information free?

Yes, in certain circumstances. If your application was denied because of information furnished by the Consumer Reporting Agency, and if you request a copy of your report within 60 days of receiving the denial notice you are entitled to the information without charge. You are also entitled to one free report once in any 12 month period, if you certify in writing that you:

• Are unemployed and intend to apply for a job in the next 60 days;
• Are receiving public welfare assistance; or
• Believe that your report is wrong due to fraud.

Furthermore, the Federal Trade Comission issued rules requiring credit reporting agencies to begin providing free credit reports on an annual basis. The rules will be phased in from December 2004 through September 2005. Please consult the map below to determine when these free annual credit reports will become available in your area.

Zone 1: Western States December 1st, 2004 Zone 2: Midwest States March 1st, 2005 Zone 3: Southern States June 1, 2005 Zone 4: Eastern States September 1st, 2005

Requesting a credit report is free and easy. Please visit our Links page for more information on accessing this free service.

6. What can I do if the information is inaccurate or incomplete?

Notify the Consumer Reporting Agency. The agency probably has a toll-free telephone number. Be as specific as possible. The agency is required to delete or reinvestigate the items in question. If the new investigation reveals an error, a corrected consumer report will be sent to you, and upon your request, to anyone who received your report in the past six months (Job applicants can have corrected reports sent to anyone who received a copy during the past two years.). If you dispute the accuracy of the information in your file and the Consumer Reporting Agency deletes it, the agency can not put the disputed information back into your file without notifying you in writing.

If you contact a consumer reporting agency to dispute the accuracy or completeness of information in your file, the reporting agency may forward your dispute to the creditor or other person who furnished the information to the agency. But you also should still contact that source of information directly. Many creditors have a special address for this purpose, and have a duty to avoid reporting inaccurate information. Also, if you tell anyone that you dispute the accuracy of information, then that person must note that the information is disputed whenever it is provided to a consumer reporting agency.

7. What can I do if the Consumer Reporting Agency won't modify the report?

The new investigation may not resolve your dispute with the Consumer Reporting Agency. If this happens, have the Consumer Reporting Agency include your version of the disputed information in your file and in future reports. You may submit a written statement of any length to be included in your file, although if the Consumer Reporting Agency helps consumers write a clear summary of the dispute, the statement may be limited to 100 words. At your request, the Consumer Reporting Agency will also show your version or a summary of your version to anyone who recently received a copy of the old report. There is no charge for this service if it's requested within 30 days after you receive notice of your application denial. After that, there may be a reasonable charge.

8. Do I have to go in person to get the information?

No, you may also request information over the phone, by mail, or via the internet. But before the Consumer Reporting Agency will provide any information, you may have to establish your identity by completing certain forms or answering specific questions. If you do wish to visit in person, you'll need to make an appointment.

9. How long can Consumer Reporting Agencies report unfavorable information?

Generally seven years. Adverse information can't be reported after that, with certain exceptions:

• Bankruptcy information can be reported for 10 years;
• Information reported because of an application for a job with a salary of more than $75,000 has no time limitations;
• Information reported because of an application for more than $150,000 worth of credit or life insurance has no time limitation;
• Information concerning a lawsuit or judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer.

10. Can anyone get a copy of the report?

No, it's given only to those with certain specified permissible purposes.

11. Do I have to be told before a creditor increases my periodic interest rate?

Generally, yes. The Fair Credit Reporting Act requires a creditor or financial institution to provide notice to a consumer where the lender is taking an action based on information in a consumer's credit report that negatively affects the consumer's credit card account, such as increasing the periodic interest rate.

12. If I am denied credit, do I have to be told why?

Yes. In December of 2003, the Fair and Accurate Credit Transactions Act, also called the FACT Act, was signed into law. The FACT Act amended the Fair Credit Reporting Act ("FCRA") to improve the accuracy of consumer records by imposing additional requirements upon lenders, including new disclosure requirements.

Under the FACT Act, a creditor's or financial institution's decision to grant a consumer credit terms based on information in his or her consumer credit report in response to an application for a new account must provided in a notice to the consumer.

The notice must meet the following minimum requirements:

• It must include a statement informing the consumer that the terms offered to the consumer are set based on information from a consumer credit report;
• It must identify the consumer reporting agency furnishing the report;
• It must include a statement informing the consumer that he or she may obtain a copy of a consumer report from that consumer reporting agency free of charge; and
• It must include the contact information specified by that consumer reporting agency for obtaining such consumer reports. (If the consumer reporting agency operates on a nationwide basis, the notice must provide a toll-free telephone number.)

13. What if I think a Consumer Reporting Agency has violated my rights under the law?

You may wish to seek the advice of an attorney. In some cases, but not always, a Consumer Reporting Agency or other person who has violated the Fair Credit Reporting Act must pay damages and your attorney's fee.

Although the Federal Trade Commission can't act as your lawyer in private disputes, information about your experiences and concerns is vital to the enforcement of the Fair Credit Reporting Act. Please send questions or complaints to the FTC, Washington, DC 20580.

14. Summary of your rights under the Fair Credit Reporting Act

The federal Fair Credit Reporting Act ("FCRA") is designed to promote accuracy, fairness, and privacy of information in the files of every consumer reporting agency. Consumer reporting agencies are credit bureaus that gather and sell information about you – for example, whether you pay your bills on time or have filed bankruptcy, and how much debt you are carrying – to creditors, employers, landlords, and other businesses. The following is a summary of your rights as a consumer under the Fair Credit Reporting Act ("FCRA") and the Fair and Accurate Credit Transactions Act ("FACT Act"):

You must be told if information in your file has been used against you. Anyone who uses information from a consumer reporting agency to take an adverse action against you – such as denying an application for credit, insurance, employment, apartment rental, or increasing the annual percentage rate on your credit card – must tell you, and give you the name, address, phone number (toll free if the consumer reporting agency is nationwide) of the consumer reporting agency that provided the consumer report in oral, written, or electronic form. In addition, the user must give you a statement informing you of your right as a consumer to obtain a free disclosure of your file from the consumer reporting agency within 60 days. Beginning December 1, 2004, a creditor or financial institution that uses performance-based pricing to increase a cardholder's interest rate must also provide a notice to the consumer.

You can find out what is in your file free of charge. At your request, a consumer reporting agency must give you the information in your file, along with a list of everyone who has requested it recently. If a person or entity has taken an adverse against you because of information supplied by the consumer reporting agency, that person or entity must give you a statement informing you of your right to obtain the report free of charge so long as you request the report within 60 days of receiving notice of the action, as well as a statement describing your right to dispute directly with the consumer reporting agency the accuracy or completeness of any information supplied by the consumer reporting agency.

You can dispute inaccurate information with the consumer reporting agency. If you tell a consumer reporting agency that your file contains inaccurate information, the consumer reporting agency must investigate the items (usually within 30 days) by giving the furnisher of the inaccurate information (e.g., financial institution or other creditor) the evidence you submitted. The furnisher must then review the evidence and report its findings to the consumer reporting agency. The consumer reporting agency must give you a written report of the investigation, and a copy of your report if the investigation results in any change. If the consumer reporting agency's investigation does not resolve the dispute, you may add a brief statement to your file regarding your dispute. The consumer reporting agency must normally include a summary of your statement in future reports.

Inaccurate information must be corrected or deleted. A consumer reporting agency must remove or correct inaccurate or unverified information from its files, usually within 30 days after you dispute it.

Duties of a furnisher of information after notice of a dispute from the consumer reporting agency. If a consumer reporting agency notifies a furnisher of information that a consumer disputes the completeness or accuracy of the information provided by the furnisher, the furnisher must follow certain procedures:

• conduct an investigation and review all relevant information provided by the consumer reporting agency, including information given to the consumer reporting agency by the consumer;
• report the results to the consumer reporting agency, and, if the investigation establishes that the information was in fact incomplete or inaccurate, report the results to all consumer reporting agencies; and
• complete the above within 30 days from the date the consumer reporting agency receives the dispute (or 45 days if the consumer later provides relevant additional information to the consumer reporting agency).

Negative information notice from creditor/financial institution. A financial institution that gives negative information to a consumer reporting agency concerning a customer's delinquencies, late payments, insolvency, or other default must provide a clear and conspicuous written notice of such action to the customer no later than 30 days after furnishing the negative information.

You can dispute inaccurate information with the creditor or financial institution that provided the information to the consumer reporting agency. If you tell anyone – such as a creditor or financial institution who reports to a consumer reporting agency – that you dispute an item, they may not then report the information to a consumer reporting agency without including a notice of your dispute. In addition, once you have notified, in writing, the source of the inaccurate information, it may not continue to report the information if the information is in fact inaccurate.

Correcting and updating information. If at any time a financial institution or creditor who regularly furnishes information about your credit to one or more consumer reporting agencies determines that the information provided is not complete or accurate, it must provide complete and accurate information to the consumer reporting agency. In addition, the financial institution or creditor must notify all consumer reporting agencies that received the information of any corrections, and thereafter must report only the complete and accurate information.

Duty of those who provide credit information to consumer reporting agencies to improve accuracy of consumer reports. A financial institution or other creditor that furnishes information to consumer reporting agencies must establish policies and procedures to (1) reinvestigate disputes concerning the accuracy of consumer report information when a customer directly requests the information provider reinvestigate the matter and (2) modify, delete, or permanently block reporting of credit information found to be inaccurate, incomplete, or unverifiable after reinvestigation.

If your credit card company uses performance-based pricing and your interest rates took a sudden jump, you should be aware of your rights as described above.

15. Liability for FCRA violations

If a creditor or consumer reporting agency fails to comply with any requirement under the FCRA, a consumer may file a lawsuit against it for damages, costs of the lawsuit, and attorneys fees.

If the creditor acted willfully (i.e., with the knowledge and intent to cause harm, or with reckless disregard for the consequences of its action) in failing to comply with the FCRA, the consumer may be entitled to receive punitive damages.

If a creditor or consumer reporting agency fails to comply with any requirement under the FACT Act, the Federal Trade Commission may file a lawsuit against a creditor or financial institution for failing to comply with these provisions of the FACT Act. (Note: This applies only to the FACT Act provisions, and not to other FCRA provisions.)

Adapted from material prepared by the National Consumer Law Center and the Federal Trade Commission.