Fair Credit Reporting Act (FCRA)

The Fair Credit Reporting Act (FCRA) is a federal law that regulates the collection, dissemination, and use of consumer credit information. The purpose of the FCRA is to promote accuracy, fairness, and privacy of consumer credit information. The FCRA applies to all consumer reporting agencies (CRAs), which include credit bureaus, tenant screening companies, and employment screening companies.

Under the FCRA, consumers have the right to access their credit reports and dispute any inaccuracies. Credit reporting agencies are required to investigate and correct any errors within 30 days of receiving a dispute. Consumers also have the right to know who has accessed their credit reports within the past year, and the reason for the access.

The FCRA also regulates who has access to consumer credit reports. Credit reports can only be accessed by entities with a permissible purpose, such as lenders, landlords, and employers. Permissible purposes are defined by the FCRA and generally include decisions related to credit, employment, and housing.

The FCRA also requires that consumers receive notice and give consent before their credit report is accessed for employment purposes. Additionally, the FCRA requires that companies that use consumer credit reports for employment purposes provide adverse action notices to applicants who are denied employment based on their credit reports.