Fair Credit Reporting Act (FCRA)/Fair and Accurate Credit Transactions Act (FACTA)

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Information included in a FACTA disclosure

Credit score & info on the company who generated the score (including notice of the borrower's right to contact the company), and info regarding limited disclosure of SSN

Credit score evaluation methods

Use of 3 credit agencies: Experian, Equifax, and Transunion

Length of time a bankruptcy will show on a credit history

A CRA can report negative information up to seven years, subject to the following exceptions: Information about a lawsuit or an unpaid judgment against the consumer can be reported for seven years or until the statute of limitations runs out, whichever is longer. Bankruptcy information may be reported for 10 years .There is no time limit on reporting information: about criminal convictions, in response to an application for a job with a salary of more than $75,000 or, in response to an application for more than $150,000 worth of credit or life insurance.

Information included in a "consumer report"

A consumer report is any written, oral or other communication of any information by a CRA: bearing on a consumer's creditworthiness, credit standing, credit capacity, character, general reputation, personal characteristics or mode of living; and to be used in establishing eligibility for credit or insurance to be used primarily for personal, family, household or employment purposes.

"Fraud Alert"

An alert placed in a consumer's credit report file at his or her request to notify any user of the information that the consumer is or is believed to be a victim of fraud. A fraud alert must be kept in the consumer's file for 90 days.

"Creditor"

Any person or entity that regularly extends, renews, or continues credit

Requirement to develop policies and procedures regarding identity theft

FACTA was enacted in 2003 as an extension of FCRA in order to combat identity theft. Policies and procedures include the Red Flag rule (reporting suspicious activity) and Safeguards rule (requires financial institutions to have measures in place to keep customer info secure)

Permissible times when a credit report may be accessed

Only people with a legitimate business need, as recognized by the FCRA, can get a copy of a consumer's report. For example, a company is allowed to get a report if someone applies for credit, for insurance, for employment or to rent an apartment. In a loan transaction, the borrower, the underwriter and the closer would be entitled to a copy of the borrower's report, but the seller would not.


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