In 1970, a very important piece of legislation was passed. This piece of legislation would go on to become the bedrock for the defense of consumers when it comes to how their credit-related information is stored, communicated, and updated. 

This piece of legislation is known as the Fair Credit Reporting Act, and it serves as a collection of enforceable best practices and regulations governing the ways in which credit reporting agencies collect and maintain the information used to derive consumer credit reports

In this week’s blog post, the legal team at Matthew R. Osborne, PC is taking some time to explain why the FCRA is so important, what it means for the average consumer, and why it’s the single piece of legislation that does the most to protect our rights as consumers with credit. 

History of the Fair Credit Reporting Act

fair credit reporting act 2Initially introduced in the House of Representatives as HR 15073, the Fair Credit Reporting Act was signed into law by then-President Richard Nixon on October 26th, 1970. The act was meant to be an addendum to another set of laws specifically put into place to protect consumers in their dealings with banks—the Federal Deposit Insurance Act, or FDIA. 

A lot was happening as the United States was exiting the 1960s. The Vietnam war was in full swing, the nation was still reeling from the assassination of President Kennedy, and the era of a data-driven economy was upon us. Personal computing hadn’t yet become popular, but the methods that financial institutions were using to store, update, and disseminate consumer credit information were becoming increasingly computer-based. 

This was the dawn of the Information Age, and at the time, there were no laws in place that directly dealt with inaccuracies in consumer reports. 

Therefore, the Fair Credit Reporting Act was passed in an effort to do three fundamental things: 


  • Regulate how consumer credit information is stored in databases. Until the FCRA was passed, there was no law against using private databases to keep tabs on consumer credit reports. This meant that there were no checks and balances in place to ensure accuracy of the credit information that was so important to US citizens.
  • Give consumers the right to access and challenge the credit information pertaining to them. The Fair Credit Reporting Act essentially ‘open sourced’ consumer credit information. This meant that any consumer could take the steps necessary to view their credit information and, if there were discrepancies, they could take action to have those discrepancies corrected.
  • Ensure that outdated or irrelevant consumer data expires in favor of current data. Without the FCRA, there wouldn’t have been any laws that dictated just how far back a consumer’s credit report would extend. This meant that things like bankruptcies or loan defaults could live forever on a credit report.


In order for the Fair Credit Reporting Act to hold any kind of operational value for consumers, it needed to be enforceable. That’s why the Federal Trade Commission stepped up to be the arbiter of this new legislation. The FTC, in combination with the Consumer Financial Protection Bureau, is responsible for the enforcement of the FCRA whenever consumer credit cases are brought before the courts. 

Who Is Affected by the FCRA?

The organizations that are most impacted by the FCRA are consumer reporting agencies like Equifax, Transunion, and Experian. However, third-party users of consumer reports and furnishers of consumer information are also affected by these laws. 

If a consumer’s rights under the FCRA are found to be in violation, the consumer is empowered to take action to uphold their good name and, in some cases, sue for damages. Lawsuits that use the FCRA as the basis for consumer defense can force the hand of financial institutions using the enforcement power and judicial oversight of the United States federal government. 

The FCRA has been instrumental in keeping credit reporting agencies honest and accurate. Without the FCRA, our data-driven world would be a lawless, chaotic place where consumers wouldn’t have any recourse in defending their credit standings. 

Many consumers don’t even know that these laws are on the books. Often, it’s not until their credit information has been compromised or falsely represented that they learn what legal options are available to them.

If you believe that your rights under the Fair Credit Reporting Act have been violated by reporting agency or other financial institution, contact our offices. We’ll review your case and let you know what actions can be taken to ensure that your credit information comports with reality.