If you report consumer credit information to credit reporting agencies, then you must be familiar with the FCRA to ensure you report only accurate and relevant information to national and local credit bureaus.
The Fair Credit Reporting Act (FCRA) requires information supplied to or by consumer reporting agencies (CRAs) to be as accurate as possible. Therefore, reviewing the information on this page is a must for anyone who reports consumer credit information to credit reporting agencies or credit bureaus. Additionally, amendments to the FCRA spell out new legal obligations AND allows consumers to sue individuals who knowingly furnish inaccurate or false information including debt collectors and creditors.
- How do I know if the FCRA Affects Me?
- What Are My Responsibilities?
- Prohibition on Reporting Inaccurate Information
- Correcting and Updating Information
- Responsibilities After Being Notified of a Consumer's Dispute
- Responsibilities After Notified by CRA
- Reporting Voluntary Account Closings
- Reporting Delinquencies
Up 1. How do I know if the FCRA affects me?
If you report information about consumers to any Credit Reporting Agency (CRA), then you are considered a "furnisher" of information under the FCRA. If you provide information to a CRA regularly, then the FCRA requires that the CRA send you a notice of your responsibilities.
CRAs collect information to help businesses evaluate consumers and can include databases such as credit bureaus, tenant screening companies, check verification services, medical information services and so forth
Up 2. What are my responsibilities?
The responsibilities of information providers are found in Section 623, Responsibilities of Furnishers of the FCRA - 15 U.S.C. § 1681s-2
Items B and E apply only to furnishers who provide information to CRAs "regularly and in the ordinary course of their business."
All information providers must comply with all other responsibilities.
Up A. General Prohibition on Reporting Inaccurate Information
You may not furnish information that you know -- or consciously avoid knowing -- is inaccurate. If you "clearly and conspicuously" provide consumers with an address for dispute notices, you are exempt from this obligation but subject to the duties discussed in Item 3.
What does "clear and conspicuous" mean? Reasonably easy to read and understand. For example, a notice buried in a mailing is not clear or conspicuous.
If you discover you've supplied one or more CRAs with incomplete or inaccurate information, you must correct it immediately, resubmit to each CRA, and report only the correct information in the future.
Up C. Responsibilities After Notice of a Consumer Dispute from a Consumer
If a consumer writes to the address you specify for disputes to challenge the accuracy of any information you furnished, and if the information is, in fact, inaccurate, you must report only the correct information to CRAs in the future. If you are a regular furnisher, you also will have to satisfy the duties in Item 2.
Once a consumer has given notice that he or she disputes information, you may not give that information to any CRA without also telling the CRA that the information is in dispute.
If a CRA notifies you that a consumer disputes information you provided:
- You must investigate the dispute and review all relevant information provided by the CRA about the dispute.
- You must report your findings to the CRA.
- If your investigation shows the information to be incomplete or inaccurate, you must provide corrected information to all national CRAs that received the information.
- You should complete these steps within the time period that the FCRA sets out for the CRA to resolve the dispute -- normally 30 days after receipt of a dispute notice from the consumer. If the consumer provides additional relevant information during the 30-day period, the CRA has 15 days more. The CRA must give you all relevant information that it gets within five business days of receipt, and must promptly give you additional relevant information provided from the consumer. If you do not investigate and respond within the specified time periods, the CRA must delete the disputed information from its files.
You must notify CRAs when consumers voluntarily close credit accounts. This is important because some information users may interpret a closed account as an indicator of bad credit unless it is clearly disclosed that the consumer -- not the creditor -- closed the account.
If you report information about a delinquent account that's placed for collection, charged to profit or loss, or subject to any similar action, you must, within 90 days after you report the information, notify the CRA of the month and the year of the commencement of the delinquency that immediately preceded your action. This will ensure that CRAs use the correct date when computing how long derogatory information can be kept in a consumer's file.
Here is an example of how to report accounts that you have charged off or placed for collection:
1. A consumer becomes delinquent on March 15, 2000. The creditor places the account for collection on October 1, 2000.
In this case, the delinquency began on March 15, 2000. The date that the creditor places the account for collection has no significance for calculating how long the account can stay on the consumer's credit report. In this case, the date that must be reported to CRAs within 90 days after you first report the collection action is "March 2000."
2. A consumer falls behind on monthly payments in January 1998, brings the account current in June 1998, pays on time and in full every month through October 1998, and thereafter makes no payments. The creditor charges off the account in December 1999
In this case, the most recent delinquency began when the consumer failed to make the payment due in November 1998. The earlier delinquency is irrelevant. The creditor must report the November 1998 date within 90 days of reporting the charge-off. For example, if the creditor charges off the account in December 1999, and reports this charge-off on December 31, 1999, the creditor must provide the month and year of the delinquency (i.e., "November 1998") within 90 days of December 31, 1999.
3. A consumer's account becomes delinquent on December 15, 1997. The account is first placed for collection on April 1, 1998. Collection is not successful. The merchant places the account with a second collection agency on June 1, 2003.
The date of the delinquency for reporting purposes is "December 1997." Repeatedly placing an account for collection does not change the date that the delinquency began.
4. A consumer's credit account becomes delinquent on April 15, 1998. The consumer makes partial payments for the next five months but never brings the account current. The merchant places the account for collection in May of 1999.
Since the account was never brought current during the period that partial payments were made, the delinquency that immediately preceded the collection commenced in April 1998 when the consumer first became delinquent.Up