[fair kred-it ri-pohrt-ing akt] n. title passed requiring credit bureaus to operate in a way that ensures the confidentiality, accuracy, relevancy, and proper utilization of the information in your credit reports.
Originally passed in 1970 and amended multiple times in the past two decades, the Fair Credit Reporting Act (FCRA) was designed to protect consumers from abusive practices of the credit bureaus while also protecting the ability of credit grantors, employers, insurance companies, etc. to use credit reports to determine your credit risk. Congress realized how crucial the credit reporting system has become in our economy, but they also recognized that consumers were being treated unfairly.
Prior to 1970, you did not have the right to know what information was listed on your credit reports. There was no way to order a copy of your reports and no way for you to see if the information in your reports was accurate or not. Even worse, if somehow you learned that there were entries on your credit reports that were inaccurate, there was no procedure for disputing those items with the credit bureaus. Because there were no limits on how long listings could remain on your credit reports, your erroneous listings could have haunted you forever.
Fortunately, the FCRA helped clean up many of the abusive practices of the credit reporting system. As a result of the FCRA and amendments such as the Fair and Accurate Credit Transactions Act, you have the right to order free copies of your credit reports and to dispute the questionable items they may contain. You also have a myriad of other credit rights dealing with what information can be recorded on your credit reports, how long it can remain, and how it can be used.