The credit bureaus are bound by the laws set forth in the Fair Credit Reporting Act to maintain the privacy of consumers and the accuracy of the financial information contained within the credit reports of every American citizen.
Consumer Rights Regarding Permissible Pulls Under the FCRA
Given that a credit report is sensitive personal information, the consumer’s permission is typically required in order for a third party to have access to credit information. This is known as a permissible pull. Cases in which a permissible pull may be performed without a consumer’s consent are:
- A court may subpoena a credit report for use in a trial.
- State governments may request a copy of a credit report to enforce an individual’s child support obligations.
- The federal government may request a credit report if the individual in question is the subject of a national security investigation.
- The FBI may access a consumer’s credit report if it has reason to believe the consumer in question is involved in counterintelligence measures.
FCRA Reporting Periods
The reporting period is the amount of time an entry may remain on a credit report. As a rule, positive and up to date information may remain on a credit file indefinitely. Negative information, however, is subject to a limited reporting period. After the reporting period expires, the information in question must be removed. The majority of negative credit report entries can only remain for seven years. Chapter 7 bankruptcies, however, can be reported for 10 years and unpaid tax liens can report indefinitely.
Laws Regarding Inaccurate Information Contained Within Credit Reports
Consumers have the right to request an investigation into any information they discover on their credit reports that is inaccurate. The FCRA gives the credit bureaus 30 days to investigate the information’s accuracy. Once the time period has expired, the credit bureaus must notify the consumer in writing of the results of the investigation and provide the consumer with an updated copy of his or her credit report if changes have been made as a result of the investigation
The FCRA grants credit bureaus the right to refuse a reinvestigation into information that has already been previously confirmed. In these cases, the credit bureau will notify the consumer that the dispute is considered “frivolous” and an investigation will not be conducted.
In the event that a consumer disputes any information contained within his or her credit report and the ensuing investigation does not affirm the consumer’s claims, the individual has the right to add a 100 word statement to his or her credit report explaining the notation in question. The disputed item must then be identified as being disputed by the consumer.
Enforcement of the FCRA
The Federal Trade Commission is responsible for enforcing the FCRA. Consumers who feel that a credit bureau has violated FCRA laws may file a formal complaint with the Federal Trade Commission detailing the incident. Consumers may also file a complaint with the Attorney General for their state.
Consumers may not, however, file a lawsuit against any credit bureau for violating the FCRA. The right to file a lawsuit against a credit bureau is restricted to state Attorney Generals.
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