The FCRA explained: your rights over credit reports and background checks

The FCRA, first enacted in 1970, applies to three groups:

• Consumer reporting agencies. The three nationwide credit bureaus (Equifax, Experian, TransUnion), plus tenant screening companies, employment background check firms, insurance data companies, and check verification services.
• Furnishers. Banks, card issuers, lenders, and debt collectors that send information about you to the bureaus.
• Users. Lenders, landlords, employers, and insurers that pull reports to make decisions about you.

Anyone pulling your report needs a permissible purpose, such as a credit application, an insurance underwriting decision, or employment screening with your written authorization. Before getting a background report for employment, an employer must give you a written disclosure in a document that consists solely of that disclosure and get your written authorization. Stuffing that disclosure into a long application is a frequent basis for background check lawsuits.

• Accuracy. Under 15 U.S.C. 1681e(b), a consumer reporting agency must follow reasonable procedures to assure maximum possible accuracy of the information in your report.
• Free reports. Federal law entitles you to a free report from each nationwide bureau every 12 months, and the FTC says the bureaus have permanently extended a program that lets you check each report once a week for free at AnnualCreditReport.com.
• Disputes. You can dispute anything inaccurate or incomplete, and the bureau must investigate.
• Time limits on old information. Most negative items, such as collection accounts and charge-offs, cannot be reported after seven years. Bankruptcies can be reported for up to 10 years from the date of the order for relief.
• Adverse action notices. If a lender, landlord, or employer turns you down based on a report, it must tell you and identify the company that supplied it.
• Security freezes and fraud alerts. These are free. See what to do after a data breach notice.

Disputes are the heart of most FCRA cases, because a company that ignores a clear dispute is more likely to have acted willfully.

1. Dispute in writing with the bureau, and consider disputing with the company that furnished the information too. Explain exactly what is wrong and attach proof.
2. The bureau must investigate. Under 15 U.S.C. 1681i, a credit bureau generally must complete its reinvestigation within 30 days of receiving your dispute, extendable by up to 15 days if you send relevant information during that period.
3. The bureau notifies the furnisher, which must investigate and report back.
4. You get the results, and inaccurate or unverifiable information must be corrected or deleted.
5. If it is not fixed, you can add a statement to your file, file a complaint with the CFPB, and consider a lawsuit.

Keep copies of everything you send and receive. For a full walkthrough, see how to dispute a credit report error. Common errors that lead to lawsuits include mixed credit files (someone else's accounts on your report), paid debts still shown as owed, and debts discharged in bankruptcy still shown as due. See credit report error lawsuits.

Actual damages can include denied credit, higher interest rates, lost job offers, and emotional distress. Statutory damages are why many FCRA class actions exist: when a company's standard practice affects everyone the same way, each class member may have a willfulness claim worth $100 to $1,000 without proving individual losses.

There is an important limit. In TransUnion LLC v. Ramirez (2021), the Supreme Court held that only class members concretely harmed by a statutory violation have standing to seek damages in federal court, and it ruled that 6,332 of 8,185 class members whose inaccurate reports were never sent to a third party could not recover. Today, FCRA class definitions are often limited to people whose reports were actually furnished to a lender, landlord, or employer.

An FCRA lawsuit must be filed by the earlier of 2 years after you discover the violation or 5 years after it occurred, under 15 U.S.C. 1681p.

Recent FCRA class settlements show what these cases look like in practice:

• TransUnion bankruptcy remarks. In Brooks v. Trans Union in federal court in Pennsylvania, the claim is that TransUnion sold reports with a bankruptcy remark on a credit account even though the report showed no bankruptcy filing. TransUnion agreed to an $8,310,000 settlement fund, and members of the "No Bankruptcy Group" receive an automatic $100 payment without filing a claim if the court approves the settlement. Objections are due October 30, 2026, and the final approval hearing is set for December 2, 2026. TransUnion denies the allegations. See the TransUnion settlement.
• GEICO and C.L.U.E. reports. Kohama v. GEICO, in federal court in Maryland, covers people who disputed mixed-file or misattributed information on their LexisNexis C.L.U.E. insurance report between March 13, 2022 and May 1, 2026. See the GEICO credit reporting settlement.
• Other cases. See the Equifax credit reporting settlement and the Wells Fargo bankruptcy reporting settlement.

If an error on your credit report or background check cost you credit, housing, or a job, a free case review takes about two minutes.