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Most Common Violations of the FCRA
Learn common ways that creditors and consumer reporting agencies violate the FCRA so you can better protect your credit information.
The Fair Credit Reporting Act provides protection against the misuse and misreporting of your credit information. When creditors, collectors, or credit reporting agencies violate the provisions of the FCRA, it can cause a lower credit score, denial of credit, higher interest rates on loans and credit extensions, and more. It’s important to recognize when the FCRA has been violated, so you can take action and prevent harm to your credit. This article describes some of the more common FCRA violations.
What Is the Fair Credit Reporting Act?
The FCRA governs the behavior of consumer reporting agencies (also called credit bureaus) and the businesses or individuals that report information to the consumer reporting agencies (CRAs). The CRAs compile this information into your credit report. Your credit report serves an important purpose. It can determine whether you can obtain a mortgage, car loan, job, and even an apartment. The FCRA tells CRAs, creditors, and other authorized persons what they can and cannot do with your credit information.
Common Violations of the FCRA
Here are some of the more common ways that creditors, collectors, and CRAs violation the FCRA.
Furnishing and Reporting Old Information
CRAs and the creditors who supply information to them must provide and keep your credit information current. When your credit circumstances have changed and the information in your credit report is not updated to reflect these changes, this may be a violation of the FCRA. Some examples of this include:
Furnishing and Reporting Inaccurate Information
misstating the balance due
listing you as a debtor on an account when you were only the authorized user, or
CRAs can also run afoul of their obligations to report accurate credit information about you. In many instances, this happens when a credit bureau mixes your file with that belonging to someone else with similar background information. Some common cases of mixed files include:
failing to distinguish the Jr. and Sr. in similar surnames
Failing to Follow Debt Dispute Procedures
When you submit a written dispute about the accuracy of an item on your report, credit bureaus and your creditors must take certain actions in response. Their duties include conducting a reasonable investigation of your dispute, correcting any inaccurate information, or even removing the disputed debt from your credit report. There are a number of ways they can fall short of their duties, depending on whether they are the CRA or the creditor.
Debt Dispute Violations by CRAs
Some common violations by a CRA include failing to:
notify a creditor that you dispute the debt that it has reported
Debt Dispute Violations by Creditors and Other Information Suppliers
Some common violations by a creditor or other information furnisher include failing to:
notify every CRA involved that you dispute the debt
inform you of the results of its investigation within 5 business days after it completes the investigation.
utility companies, and
employers (only if you previously consented).
Requesting a Credit Report for an Impermissible Purpose
Even though your employer, creditor, or landlord might be allowed to pull your credit report, they must still have a permissible purpose to do so. If someone pulls your credit report for an impermissible purpose, then it may be a violation of the FCRA. Some examples of impermissible purposes include:
someone pulls your credit report to determine if you are collectible before filing a lawsuit against you on an involuntary debt or other non-credit matter (for example, in determining whether to file a personal injury lawsuit)
a creditor fails to notify you when it supplies negative credit information to a CRA
If any of these three types of entities (credit bureau, creditor, or information user) violated your rights under the FCRA, you may be able to sue them in state or federal court for damages. For more information, see Remedies for FCRA Violations.