Equifax Data Breach

New York Consumer Law Blog

Wednesday, November 2, 2016

Your Right to Know - Your Consumer Credit File Under the Fair Credit Reporting Act

Consumer reporting agencies (also known as credit reporting agencies or CRAs) compile consumer data primarily for use by "users."  Users are entities that access a consumer's information to gain insight into the consumer's past behavior including prior use of credit (payment history and type of credit accessed), criminal history for a job application, or tenant history in the case of housing.  In the credit context, users rely upon these "consumer reports" to decide if the consumer is a high or low risk borrower for a variety of consumer transactions such as auto purchases, home loans, and credit cards.

Critically, however, consumers have a right to access that data as well.  Several circumstances trigger the credit bureau's duty to provide a consumer with a copy of his or her complete credit file.

Free Consumer Acquired Reports:

  • Upon a consumer's request, the three nationwide CRAs (Equifax, Experian, and Trans Union) must provide the consumer with a free credit report once every twelve months. The centralized source for such requests is www.annualcreditreport.com. A consumer can also obtain their credit score (for a fee) either at the time of the credit report request or at a later date as desired.
    • Note that many websites offer"free" credit reports that are anything but free. They may try to sell you other unneeded services.

By Notice:

  • If a user takes adverse action against a consumer based on information in the consumer's credit report, the consumer is entitled to a free credit report from the CRA in question. The potential creditor must communicate to the consumer that the latter may obtain information regarding the reasons for the adverse action.
    • Furthermore, under the amendments to the FCRA, the creditor must provide the credit score along with the adverse action or risk-based notice.
  • If an employer takes adverse action based even in part on a consumer report, the employer must provide the consumer report to the employee.
  • Mortgage lenders who use the credit scores for applications for residential real estate-secured credit must provide the credit score and other factors used.

15 USC § 1681g(g)(1)(A).

After a Fraud Notice:

  • When a consumer informs a nationwide credit reporting agency that there has been fraud related to their identity or their consumer reporting file, they have the right to a free credit report either when the fraud suspicion is reported or when the consumer submits a proof of identity and a report already submitted to a law enforcement agency regarding the  fraud. The reporting agency then sets up a fraud alert in the consumer's file and must provide two reports upon request in the twelve months after the alert is triggered.

 


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