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Fincash » Fair Credit Reporting Act

Fair Credit Reporting Act (FCRA)

Updated on February 29, 2024 , 1200 views

What is Fair Credit Reporting Act?

As per the FCRA meaning, it is a type of federal law that helps in the regulation of the process of collecting credit information of the consumers while accessing the respective credit reports.

FCRA

The FCRA was passed in the year 1970. When you go through the Fair Credit Reporting Act PDF in detail, you will observe that it aims at addressing the overall privacy, accuracy, and fairness of personal information that is contained in the files of the respective credit reporting agencies.

How does FCRA Work?

The FCRA is a primary federal law that aims at governing the collection as well as reporting of credit information related to consumers. The subsequent rules cover how the credit information of the consumers is obtained, for what duration the same is kept, and how the same is shared with others –including the consumers as well.

The CFPB (Consumer Financial Protection Bureau) and the FTC (Federal Trade Commission) are two integral federal agencies that takes the responsibility of observing and monitoring the act’s provisions. Most of the states tend to have individual laws with respect to the process of credit reporting.

There are three major bureaus related to credit reporting-

There are several other specialized companies that aim at collecting and selling information on the individual financial history of the consumers. The information in the respective reports is also utilized for computing the credit scores of the consumers which could end up in affecting the interest rate that they are required for paying towards borrowing money.

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Determination of Collection of Data

The FCRA meaning implies the specific type of data that the respective bureaus are given the allowance to collect. This tends to include the current debts, past loans, and bill payment history of the person. It is also known to include information about employment –both current as well as past addresses, whether or not they have been filing for Bankruptcy.

The FCRA is also known to limit the individuals who can see the respective Credit Report –specifying under the given circumstances in which the same can be achieved. For instance, the lenders might consider requesting a report when someone would apply for the car loan, mortgage, or any other type of credit.

Insurance companies might also view the respective credit reports of individuals while applying for a specific policy. The government organizations might request the same as a response to the respective court order, or in case the individual might be applying for specific types of licenses as issued by the government. In some instances, the consumers might have initiated some transaction for releasing the respective reports.

Disclaimer:
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
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