The Fair Credit Reporting Act was passed in 1970 to protect the credit rights of the consumer, as well as regulate the collection, dissemination, and use of consumer data.

The Fair Credit Reporting Act
It is enforced by the Federal Trade Commission. According to the act, you have a right to review your credit report and to have mistakes and/or discrepancies corrected.
 
Several organizations are under the discretion of the FCRA, the majority of which are either consumer reporting agencies or information furnishers. A consumer reporting agency (CRA) collects and studies information on the general public to be used for other purposes, including employment.
 

Credit Bureaus
The three largest credit bureaus in the U.S. (Equifax, Experian, and TransUnion), are types of consumer reporting agencies and have the largest number of responsibilities under the FCRA. They are required to provide consumers with information about themselves and maintain accuracy in said financial records. When negative information is removed from a report because of a dispute, it cannot be reinserted without a five-day notification in writing; they also cannot retain negative information for an excessive amount of time. The FCRA has strict rules about length of time regarding bankruptcies and late payments, although some information will stay longer on your report than other negative notations.
 
The second group, information furnishers, are companies that provide the CRAs with their information. Generally, this is a lending company, such as a credit card company or mortgage broker. Due to many legal disputes between consumers and the CRAs, information furnishers do not directly interact with CRAs. They go through a system called E-Oscar instead. In any case, these lenders have a serious role in keeping credit reports; they must provide complete and accurate information to the CRA, and investigate any and all disputed information reported by consumers. In addition to these functions, they have an obligation to inform a consumer when negative information is placed on their credit report.
 
The FCRA protects consumers not only by placing information exchange restrictions on CRAs and information furnishers but also by holding them liable for noncompliance. A person may file a lawsuit against the company (or companies) in question for violating a restriction in the act. This can include debtors exchanging lists of debt-ridden consumers, non-investigation of a dispute, keeping a discrepancy on a report despite its inaccuracy, as well as many other things. As always, there is a statute of limitations on the ability to file: two years from the discovery or five years from the violation, whichever is earlier.
 
By being aware of your legal rights, you can save yourself a lot of headache in the world of credit. The FCRA is available to read on our website, and can also be downloaded. Use credit wisely, be a smart consumer, and do your research before you get in over your head.