Dealing with Credit Reporting Agencies & Bureaus

Chances are that your financial information is on file at one or more consumer reporting agencies (CRAs), which are also known as credit bureaus or consumer credit reporting agencies. These companies collect financial information about consumers and provide that information to its customers, such as lenders, employers or insurance companies. The report that the CRA produces is called a credit report or a consumer report. The compilation and use of the financial information of individual consumers are regulated by the Fair Credit Reporting Act (FCRA).

Permissible Purposes

A consumer reporting agency may furnish consumer reports only for ''permissible purposes.'' These purposes are:

• For use in connection with a credit transaction with the consumer
• For use in an employment decision for the consumer
• For use in the underwriting of insurance for the consumer
• For use in determining a consumer's eligibility for a license or other benefit granted by a governmental agency
• For use in connection with an existing credit obligation of the consumer
• For use in connection with a business transaction initiated by the consumer
• In accordance with written instructions from the consumer to whom the report relates
• In response to a request by the head of a state or local child support enforcement agency
• In response to a request by a state agency which decides child support awards
• In response to court order that involves proceedings before a federal grand jury

Consumer reporting agencies are required by the FCRA to take all steps necessary to assure that their consumer reports are furnished only to those persons who will use them for permissible purposes.

Accuracy Requirements

The FCRA requires that every consumer reporting agency establish reasonable procedures to assure the maximum possible accuracy of the information it has collected. It also requires the agencies to reinvestigate the accuracy or completeness of information contained in the consumer's file when the consumer disputes it.

Disclosure Requirements

Any consumer who offers proper identification to a consumer reporting agency and requests full disclosure of what is in his or her file must be told clearly and accurately the nature and substance of the information in the file at the time of the request, including the sources of information. If the information in a consumer credit file is in code, it is the responsibility of the CRA to explain each item in the file.

There are four exceptions to the requirement of full disclosure to you by consumer reporting agencies:

1. If you request that the first five digits of your Social Security number not be included in the disclosure, and you provide proof confirming your identity, the consumer reporting agency must use only a partial Social Security number in the disclosure documents.
2. The sources of investigative information need not be disclosed to you if collected solely for use in an investigative consumer report. An investigative consumer report is a special report about your character, general reputation, personal characteristics or mode of living obtained through personal interviews with people who know you.
3. Certain types of secondary information need not be disclosed, such as the contents of a consumer relations folder if the information is not from a consumer credit report or will not be used in preparing future reports, or billing records or audit trails of charges made by the consumer reporting agency to your file.
4. Credit or risk scores that are provided to the users of consumer reports based on analysis of data on you need not be disclosed. However, you can ask for your current credit score, and you might be charged a fee.

Consumer reporting agencies must disclose to you the names of any parties who have received consumer reports for employment purposes within the last two years prior to the date of your request for information. The agencies must also disclose to you the names of any parties who have received reports for any other purposes within the past one-year period prior to the date of your request.

When a consumer reporting agency maintains information in its files concerning checks written by you which results or may result in an ''adverse characterization'' of you, the consumer reporting agency must disclose to you the dates, original payees and amount of any checks upon which such adverse characterization is based.

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