Identification

• The first modern-day credit reporting agency was established in 1899. That company, Retail Credit Company, which later changed its name to Equifax, compiled information on consumers from various sources. It then sold consumer credit reports to lenders and later expanded by buying smaller credit-reporting agencies and selling credit reports to insurers and employers. As late as the 1960s, Retail Credit and other credit-reporting agencies still did not allow consumers access to the information contained within those reports even though the reports were used to deny services to consumers. These reports also contained consumer lifestyle data such as sexual orientation and marital status.
  
  

Effects

• In response to the abusive practices of the credit reporting agencies, Congress passed the Fair Credit Reporting Act in 1970. The federal law gave consumers certain rights when it came to their credit reports and placed responsibilities and restrictions upon credit bureaus in the handling of consumer data. Among other provisions, the law requires credit bureaus to make a consumer's credit report available to him upon request. It also prohibits the inclusion of data that has no bearing on creditworthiness, such as marital status, race, ethnicity and sexual orientation. The law also forbids credit-reporting agencies from sharing consumer credit files with others unless they had a permissible purpose, or valid reason, for viewing the information.
  
  

Consideration

• In 2003, Congress expanded the rights of consumers under the Fair Credit Reporting Act when it passed the Fair and Accurate Credit Transactions Act as an addendum to the Fair Credit Reporting Act. The law gave consumers the right to receive one free credit report each year from TransUnion, Equifax and Experian. The law also required the bureaus to establish a central website that would allow consumers the ability to order the reports in one location. That site is the Annual Credit Report website.
  
  

Prevention/Solution

• The Fair Credit Reporting Act included a major right for consumers -- the right to dispute errors and inaccuracies contained within a credit report. Bureaus are required by the law to respond to such disputes within 30 days. You can file a dispute online at the bureau's website, by phone or by mail. The contact information for each bureau is on your credit report. Once filed, federal law requires the bureau to investigate the dispute and send you written notification of the results.