Credit Bureau Reporting Laws

Fair and accurate credit reporting can affect not only your credit options, but also your employment and insurance opportunities. The U.S. Federal Trade Commission's (FTC) Fair Credit Reporting Act regulates credit reporting bureaus to ensure both the accuracy and privacy of your credit report. Learn about the Fair Credit Reporting Act to protect yourself from unfair or inaccurate credit reports.

Legal Purposes of Consumer Reports

In general, consumer reporting agencies such as credit bureaus may only provide your credit report to a third party under the following circumstances: in response to a court order; with your written permission; or to someone considering hiring you, giving you credit, insuring you, issuing you a government license dependent on your financial responsibility, evaluating your ability to pay child support or otherwise using it for legitimate business reasons.

Disclosure

No one can obtain your credit report for employment purposes without a clear written disclosure to you beforehand and your written authorization.

Excluded Information

The Fair Credit Reporting Act mandates that credit reporting agencies exclude certain information from your credit report. This information includes civil judgments, paid tax liens and collection or charged-off accounts more than seven years old and Chapter 11 bankruptcies more than 10 years old. Generally, credit reports must also exclude other adverse items from more than seven years before the date of the report.

Credit Scoring

Credit inquiries such as loan applications can negatively affect credit scores. To mitigate this effect, the Fair Credit Reporting Act requires credit reports significantly affected by a high number of inquiries to clearly disclose that those inquiries played a major role in lowering the score.

Disputing

If you dispute an item on your credit report, your report must clearly reflect this.

Fraud Alerts and Free Credit Reports

To help combat identity theft, the Fair Credit Reporting Act requires credit reporting agencies to place a 90-day fraud alert on your credit report if you report that you have been or may be a victim of identity theft. When you request a fraud alert, the credit reporting agency must also provide you with your credit report and inform the other credit reporting agencies of the fraud alert. The Fair Credit Reporting Act entitles you to two free copies of your credit report within 12 months after you place a fraud alert.