The Fair Credit Reporting Act Guarantees You Basic Rights and Protections for Your Credit

The Fair Credit Reporting Act is an important law that grants several key rights and protections to American consumers to protect their credit files

The Fair Credit Reporting Act (FCRA) is a federal law designed to promote accuracy, fairness, and privacy in the information maintained by consumer reporting agencies. While most people know it gives you the right to one free annual credit report from each of the three major credit reporting agencies, the law offers far more. It also gives you tools to fix inaccuracies, control access to your reports, and limit damage from identity theft. These rights apply nationwide, with some additional protections under North Carolina law.

Free Credit Reports

Under the FCRA, you can get a free credit report every twelve months from each of the three major credit bureaus: Experian, TransUnion, and Equifax. The official site for requesting these reports is Annual Credit Report. You are also entitled to a free report outside the annual cycle if:

• You place a fraud alert on your file due to suspected or confirmed identity theft.
• A lender, insurer, employer, or other entity takes adverse action against you based on your report.
• You are unemployed but will apply for work within 60 days.
• You receive public assistance.

Since 2020, the major bureaus have also allowed free online access to your reports weekly, a practice they have extended into 2025, making it easier to monitor for fraud and errors.

Right to Credit Score

Credit scores are numerical representations of your creditworthiness. They are based on the data in your credit report and are used to make decisions about loans, insurance, and sometimes employment. The FCRA allows you to request your score from a credit reporting agency that creates or distributes scores used in residential real estate loans. You will usually pay for this service unless you are in a mortgage application process, in which case the lender must give you the scores it used, along with related key factors, for free.

Notification of Adverse Actions

Whenever a credit report or consumer report is used to take adverse action against you, such as denying credit, raising interest rates, or rejecting an employment application—the user must notify you. This notice must include the name, address, and phone number of the credit reporting agency that supplied the report so you can review it and dispute any errors.

Disputing Inaccurate Information

The FCRA gives you the right to dispute inaccurate or incomplete items on your credit reports. Once you submit a dispute, the credit bureau generally has 30 days to investigate (45 days in certain cases). The bureau must forward all relevant information to the source of the disputed data, often a lender or debt collector. If the dispute is deemed frivolous, the bureau can refuse to investigate but must tell you why.

Results of a Dispute

After investigation, the bureau must correct or delete any information that is inaccurate, incomplete, or unverifiable. Verified information can remain on your report. If the disputed item cannot be verified within the allowed timeframe, it must be removed. The bureau must also send you written results of the investigation and a free copy of your updated report if changes are made.

Limits on Reporting Old Negative Information

Negative information, such as late payments, collections, and certain judgments, generally cannot be reported after seven years. Bankruptcies have a ten-year reporting limit. North Carolina follows the same timeframes. These limits are designed to give consumers a fresh start after a reasonable period.

Security Freezes

You have the right to place a security freeze on your credit report. A freeze blocks new creditors from accessing your file without your consent, reducing the chance of new accounts being opened in your name. In North Carolina, placing or lifting a freeze is free for all consumers. While effective, a freeze can slow legitimate applications for credit, insurance, or services, so you may need to temporarily lift it when applying for new accounts.

Fraud Alerts

Instead of a freeze, you can place a fraud alert on your credit file at no cost. An initial alert lasts one year and requires creditors to verify your identity before opening new accounts. If you are an identity theft victim, you can request an extended fraud alert that lasts seven years. Fraud alerts are easier to manage than freezes but provide less control.

Protecting Credit Card Information

To limit card number theft, the FCRA requires merchants to shorten account numbers on printed receipts, often replacing digits with symbols such as asterisks. This makes it harder for thieves to use discarded receipts to steal your card information.

Who Can Access Your Credit Reports

Access to your credit file is restricted to those with a legitimate need. Under the FCRA, your report can be accessed by:

• You, as often as you want, though a fee may apply outside your free report eligibility.
• Creditors and lenders when you apply for credit, loans, or certain services.
• Insurers underwriting your policy.
• Employers, but only with your written permission.
• Court orders or certain government actions.
• Existing creditors reviewing or managing your account.

Opting Out of Pre-Approved Offers

The FCRA allows you to opt out of prescreened credit and insurance offers. To stop these offers, visit the official Opt Out Prescreen Website or call 1-888-5-OPT-OUT. Opt-outs can be set for five years or permanently, and the service is free.

Damages for Violations

If your FCRA rights are violated, you may recover:

• Actual damages for proven harm.
• Statutory damages for certain violations, even without proof of harm.
• Attorney fees and court costs.
• Punitive damages for willful violations.

North Carolina residents with complaints can contact the NC Department of Justice Consumer Protection Division for help in resolving disputes or reporting violations.

Best Practices for Using Your Rights

• Check your credit reports from all three bureaus at least once a year, more often if you suspect fraud.
• Dispute errors in writing and keep records of all correspondence.
• Use security freezes or fraud alerts if you believe your personal information is at risk.
• Opt out of prescreened offers to reduce the risk of mail theft.
• Monitor your credit score to spot sudden changes that may signal fraud.

The FCRA provides the foundation for fair and accurate credit reporting, but it works best when you use your rights proactively. Staying informed, reviewing your reports regularly, and taking action when something is wrong can protect your credit profile and financial future.