History

• The first credit reporting agency in the United States was the Retail Credit Company, established in 1899. Over time, it began offering its reports for sale to insurance companies and employers. By the 1960s, more reporting agencies sprang up and the industry expanded, but with the expansion came abuses, as well. The reporting agencies started to require their investigators to report some negative information. When negative information couldn't be found, investigators falsified the information to meet their quotas. Other abuses included lifestyle reporting, which included sexual orientation, drinking habits and other personal information. Outdated information was maintained and information was disseminated to unauthorized persons or agencies. Into this climate, and for these reasons, Congress passed the FCRA. Major amendments to the act were passed in 1996 and again in 2003.
  
  

Covered Entities

• Consumer credit reporting bureaus, agencies that collect financial and credit data on individuals, are covered entities. There are three national reporting agencies in the United States: Trans Union; Equifax, formerly Retail Credit Co.; and Experian, formerly TRW. Also potentially subject to the law are inspection bureaus that provide data to insurance companies and perform background checks. In addition, companies that do tenant screening or check approval may also be covered. The nature of what you do in your business determines if you are subject to the law, not what you categorize yourself as or to whom you provide data.
  
  

Provisions

• The FCRA and its subsequent amendments are responsible for: your right to a free credit report if adverse action was taken against you as a result of the report; a free annual credit report from each of the three major reporting agencies; and the right to dispute any erroneous information. It requires that data collectors make reasonable efforts to ensure the accuracy of their reports and allows consumers to opt-out of automatic offers of credit. If requested, credit agencies must give you your credit score for a reasonable fee. If an investigative consumer report is compiled, the requester must notify the consumer within three days of requesting the report of his intent. The consumer can ask the requester to provide the nature and reason for the report in writing.
  
  

Amendments

• The Consumer Credit Reporting Reform Act of 1996 strengthened some of the provisions of the act but weakened others, such as allowing reports to be shared with affiliates and allowing credit card companies to solicit consumers who didn't request credit cards. It also limited provisions that could be overridden by stricter state consumer protection laws. The Fair and Accurate Credit Transactions Act of 2003 allows you to opt-out of affiliate marketing, requires notification of credit terms less favorable than terns available to others and restricts reportable medical information.