What does “meets FCRA requirements” mean?

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Fact-checked by Patrick Austin, J.D.

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Patrick Austin is a licensed attorney with a background in data privacy and information security law. Patrick received his law degree at George Mason University's Antonin Scalia Law School, where he served as the Editor-in-Chief for the National Security Law Journal.

Summary: If you have disputed information on your credit report, the FCRA requirements can protect you from unfair treatment. "Meets FCRA requirements" may be added if a consumer disputes information on their credit report, but the credit bureau determines that the information is accurate. Keep reading to learn more.

What are FCRA requirements?

The FCRA requirements are related to the Fair Credit Reporting Act (FCRA). This primary federal law regulates how consumer reporting agencies may use consumer information. The Fair Credit Reporting Act is a federal statute initially passed in the 1970s, and was amended in 2003 by the Fair and Accurate Credit Transactions Act.

What is the purpose of the FCRA?

The FCRA was enacted to protect consumers' rights while ensuring the accuracy of the data reported to Experian, TransUnion, and Equifax. The regulation specifies what should be included in consumer information reports. Additionally, it adds that consumers have the right to contest this information if they believe it is erroneous.

FCRA requires credit reporting agencies and lenders to handle disputes raised by borrowers with the utmost seriousness. In contrast, the law assumes that lenders will report accurate data, which places the burden of proof on the customer.

What can I do if my credit report contains inaccurate information?

Experian, Transunion, and Equifax offer consumers the opportunity to dispute mistakes on their credit reports. Customer complaints can be submitted online or by mail, and these processes are available on the agencies' websites.

Disputes can be resolved independently or collectively, depending on the instructions. The consumer's responsibility is to review their credit reports and correct any errors.

The information provided by each agency may be inconsistent, so consumers should evaluate each agency's report carefully.

Credit report dispute and FCRA requirements

According to the FCRA, if you have sent a notice of dispute to a credit union, they have 30 days to investigate the dispute. They must update the report with a note stating that it was disputed by a consumer, and they have investigated the matter according to FCRA requirements.

However, keep in mind that just because a credit union claims they have met FCRA requirements, this doesn't mean they actually have.

What's the average time for a dispute to be removed from your credit report?

A disputed item can take up to 30 days to be removed from your credit report if it is valid. Within this limit, the credit bureau is required to respond under the Fair Credit Reporting Act.

After an investigation has been completed, credit bureaus may add a note to an account stating it was disputed along with "FCRA requirements" added as a final statement.

A statement indicating that the account "meets FCRA requirements" may be added if a consumer disputes information on their credit report, but the credit bureau determines that the information is accurate. Additionally, it can be concluded that all information is accurate and under federal regulations.

Whether a credit reporting agency provides accurate information depends on the seriousness of the inaccuracies. If there are significant errors, the customer is encouraged to take legal action and provide documentation to support their case.

What is the reason for disparate credit reporting databases?

Lenders compensate the credit reporting organizations for collecting and maintaining borrower information and reporting it to them when requested. The cost of this varies greatly based on the volume of loans reported monthly by customers.

All three current credit reporting agencies (Experian, Transunion, and Equifax) earn revenue by providing lender service agreements. In the late nineteenth century, these organizations were established to provide banks with accurate information about borrower risk.

Is a decision valid if the account information “complies with FCRA regulations” but the customer objects?

There is the possibility that your credit report may contain inaccuracies. Most consumers are unaware of such trivial problems. Even if they are aware of them, they probably won't fix them.

Partly, this is due to the extensive regulation of lenders and partly to the assumption that accuracy would benefit them. It is ideal for the credit bureau to be objective when investigating a dispute, but this doesn't always happen.

Given that lenders are presumed to disclose accurate information due to being heavily regulated, consumers must present documented verification when disputing an item on their credit reports.

While reporting errors occur, the customer bears the burden of proving them. Frequently, customers must use formal dispute procedures to represent their interests and thereby, hopefully, obtain a good outcome.

What must creditors have before pulling a credit report?

The creditor must provide the credit score that the credit decision-maker used on the risk-based pricing notice. In most cases, FCRA-compliant credit scores come from consumer reporting agencies.

What is the FCRA's enforcement authority?

Over the years, the federal agencies responsible for enforcing the FCRA include the Federal Trade Commission (FTC), state attorneys general, and the Consumer Financial Protection Bureau (CFPB).

Does the FCRA cover criminal background checks?

Yes, the FCRA applies to consumer reports, and employee background checks are generally considered “consumer reports” under the FCRA. Performing a formal criminal background check on a job candidate without complying with the FCRA is illegal, much less disqualifying them from consideration for the job because of the findings of a background check.

Who is exempt from the FCRA?

Under the CCPA, any sale of personal information to or from a consumer reporting agency is not exempt if the information is used in generating a consumer report, and the FCRA limits the use. A provision such as this is referred to as an "FCRA exemption."

What is a consumer reporting agency under the FCRA?

The FCRA defines consumer reporting agencies as businesses or individuals that regularly gather and evaluate consumer credit information to provide consumer reports to third parties.

What legal questions can a creditor ask you?

It is legal for creditors to ask for personal information, such as employment history and residence, to assess your creditworthiness.

Is there a private right of action under the FCRA?

It is also significant that the FCRA does not give a private right of action to a party for alleged violations of its duties when using a consumer report, as opposed to a party's duties when requesting a consumer report under Section 1681b.

Can the result of my dispute affect my credit score?

A dispute does not affect your score. However, your credit score could change if your credit report information changes after processing the dispute. The correction of this type of information will not affect your credit score.

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