What is FCRA?

FCRA or the Fair Credit Reporting Act is the United States of America’s federal legislation that advocates the accuracy of the information, decorum, and privacy, used by consumer reporting agencies (CRAs).

These agencies include credit bureaus and financial agencies that gather, collect, compile, utilize and distribute customer information for background checks.

It was in the 1970’s when the legislation was enacted to ensure that consumer information collected by CRAs are done with accuracy, fairness, and in respect to a consumer’s privacy.

Consumer credit reports are often obtained and used by landlords to make rental decisions, such as in renewing a lease or approving an application for rental housing.

Before Landlords can obtain consumer reports, they must:

  • Obtain a written permission from the tenant or applicant as proof that they have a permissible purpose to get one.
  • Certify to the CRA that the report will be used for housing purposes only.

On one end of the spectrum, consumers can use the report in response to an adverse action notice from the landlord. This refers to any action unfavorable to a rental applicant or tenant’s interests, such as denying the application, requiring a deposit larger than that of other applicants, and requiring a co-signer on the lease.

Through FCRA, consumers are also able to:

  • Demand the information obtained from them to be revealed, especially when used against them. Furthermore, anyone who uses the information to deny them of any application for a new credit, insurance, or even a chance at employment, must inform the consumer the name, address, and the contact number of the entity that provided the data.
  • Know what is listed in the data stored under their name. They will be able to demand and gain access to all of the information about the company or agency that reported them. They are entitled to a free disclosure that lasts for 12 months upon the initiated request from each nationwide credit bureau and specialty consumer reporting agencies.
  • Ask for a credit score, a summary of credit history obtained from the credit bureaus.
  • Dispute inaccurate or incomplete data about them.
  • Take legal action or seek financial help for damages when an agency violates the FCRA.

 

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