The FCRA, or Fair Credit Reporting Act, sets rules for how consumer credit information is collected, shared, used, and disputed. In practical terms, it requires consumer reporting agencies and data furnishers to keep information accurate, allow consumers to access and correct it, and follow limits on who can use it and for what purpose.

Main requirements

  • Accuracy and fairness. Credit reporting agencies must use reasonable procedures to help ensure the information they report is accurate and relevant.
  • Consumer access. Consumers generally have the right to see their credit information and dispute inaccurate or incomplete items.
  • Dispute investigation. If you challenge an item, the company must investigate and, if the information cannot be verified, delete or correct it.
  • Permissible purpose. A credit report can only be pulled for allowed reasons, such as credit, employment, insurance, housing, or similar legitimate purposes.
  • Notice and consent in employment. Employers must give notice and get written permission before obtaining certain background or consumer reports for hiring decisions.
  • Negative information rules. Furnishers of information have duties to report accurate, complete data and to handle disputes about negative items.

Who it affects

The FCRA applies to consumer reporting agencies, businesses that furnish information to them, and users of consumer reports such as lenders, landlords, employers, insurers, and background-screening companies.

Simple example

If a credit report incorrectly shows a late payment, you can dispute it, the reporting company must investigate, and if it cannot confirm the item, it must remove or fix it.

Bottom line

If you meant “what does FCRA require?” , the short answer is: accurate reporting, consumer rights to access and dispute, and strict limits on how credit/background information can be used.

If you want, I can also give you:

  • a consumer-friendly FCRA checklist , or
  • an employer/background-screening FCRA checklist.