QUICK ANSWER
A consumer reporting agency (CRA) is a company regulated by the Fair Credit Reporting Act (FCRA) that collects, maintains, and sells information about you, typically in the form of consumer reports like credit reports, employment background check reports, rental screening reports, and insurance history reports.
What Does a Consumer Reporting Agency Do?
Consumer reporting agencies collect information about consumers and compile it into reports used for decisions involving credit, housing, employment, and insurance.
While credit bureaus are the most well-known, other agencies specialize in tenant screening, background checks, insurance claims, banking records, and similar consumer data.
Types of Consumer Reporting Agencies and the Data They Collect
Consumer reporting agencies vary depending on the type of information they collect and report. CRAs can include any of the following:
- Credit reporting agencies - collect data about things like loans, credit cards, payment history, debt collections, and bankruptcies
- Tenant screening agencies - collect data about things like rental history, eviction records, and criminal history information
- Employment screening agencies - collect data about things like criminal records, education verification, employment history, and professional licenses
- Specialized reporting agencies - collect data about things like insurance claims, banking activity, check-writing history, and utility payments.
Because reports are compiled from multiple sources, errors can occur, making it important to review your reports regularly and seek legal help when errors are not corrected.
Common Examples of Consumer Reporting Agencies
Many people are familiar with three of the largest consumer reporting agencies, which are also known as the credit bureaus:
- Equifax
- Experian
- TransUnion
Other common examples include background check and tenant screening companies like:
- HireRight
- First Advantage
- Checkr
- Sterling
- Accurate Background
- GoodHire
- TransUnion Rental Screening Solutions
- CoreLogic SafeRent
- Experian
- Equifax Workforce Solutions
How Consumer Reporting Agencies Collect and Use Your Information
Consumer reporting agencies (CRAs) collect information from data furnishers, public records, courts, government agencies, and other authorized sources, then update your consumer file as new information becomes available or as new information is reported on a regular schedule.
For instance, credit card companies and lenders (known as data furnishers) provide regular updates about the state of your various accounts and loans, including payment history, balances, account status, etc.
CRAs use your data by packaging it into reports and selling it to decision-makers like lenders, employers, landlords, and insurance companies.
Who Can Access Your Consumer Report and Why
Under the FCRA, your consumer reports may only be shared with parties that have a legally permissible purpose, such as lenders, landlords, employers, and insurers. And, you typically have to authorize access to the reports.
Your Rights Under the Fair Credit Reporting Act (FCRA)
The Fair Credit Reporting Act generally provides the right to:
- Get a copy of your report
- Know when information in a report was used against you
- Dispute incorrect information
- Have CRAs investigate disputed items
- Request correction or removal of unverifiable information
- Limit access to your report in certain circumstances
- Seek legal remedies, including compensation, when agencies violate the law
These rights help ensure that consumers have a meaningful opportunity to correct errors that could affect their lives.
How Consumer Reporting Agencies Impact Your Credit and Finances
Consumer reports can affect every aspect of life including your ability to get a loan, rent a home, secure employment, or qualify for favorable insurance rates. A single “small” reporting error can lead to denied applications, higher rates, and lost opportunities.
Common Errors in Consumer Reports
Consumer reports are not always accurate. Errors can show up as any data that is inaccurate, incomplete, missing, outdated, false, unreportable, or someone else’s.
Common errors include:
- Accounts that do not belong to you
- Incorrect payment details
- Duplicate entries for debts, accounts, criminal history, evictions, accidents, and insurance claims
- Outdated negative information
- Mixed files (someone else’s info in your report)
- Identity theft-related accounts
- Incorrect personal information
- Inaccurate criminal record data
Review reports carefully and dispute any inaccurate information as soon as possible.
How to Request Your Consumer Reports
Request copies of consumer reports directly from the consumer reporting agencies that produce them or, if a report was just pulled in connection with an opportunity, request a copy from the employer, lender, landlord, or insurance company that pulled it. Accessing your reports typically requires verification of your identity.
You can also request FREE credit reports at annualcreditreport.com.
How to Dispute Inaccurate Information With a Consumer Reporting Agency
If you find inaccurate information, submit a dispute to the CRA in writing through certified mail - creating a document trail.
Provide a clear explanation of the error and include copies of supporting documents. The agency generally must investigate within about 30 days, sometimes 45 days.
If the information cannot be verified, it must be corrected or removed.
What to Do If a Consumer Reporting Agency Violates Your Rights
If a CRA fails to investigate a dispute, reports false information, provides information without a permissible purpose, or otherwise violates the FCRA, you have legal options. Depending on the nature of the FCRA violation and the extent of the harm it caused, you will either need to file a dispute or a lawsuit.
Most violations start with a dispute, though contacting a consumer protection lawyer can be helpful in getting a clear perspective on how to build the best dispute or whether a lawsuit is warranted on a more immediate timeline.
When to Contact a Consumer Protection Lawyer About Reporting Issues
You may want to speak with a consumer protection lawyer if false information remains on your report after a dispute, if a reporting agency fails to conduct a reasonable investigation, or if reporting errors have caused financial, career, reputational, housing, emotional, or other harm.
Frequently Asked Questions
What is considered a consumer reporting agency?
A consumer reporting agency (CRA) is a company that collects consumer information and provides reports to third parties for decisions involving credit, employment, housing, or similar purposes.
What are examples of consumer reporting agencies?
Examples include the credit bureaus- Equifax, Experian, and TransUnion- as well as tenant screening companies and employment background check providers.
How do consumer reporting agencies get my information?
They obtain information from lenders, landlords, public records, courts, collection agencies, and other authorized sources.
Who can legally access my consumer report?
Generally, only parties with a permissible purpose under the FCRA, such as lenders, landlords, employers, insurers, or businesses involved in certain transactions.
What rights do I have under the FCRA against reporting agencies?
You have several important rights under the FCRA, including the right to access your reports, dispute inaccuracies, request investigations, and seek legal remedies when reporting agencies violate the law.
How do I get a copy of my consumer report?
You can request a copy directly from the consumer reporting agency that maintains the report or from the company that requested it.
What should I do if my consumer report has an error?
File a dispute with the consumer reporting agency, provide supporting documentation, and keep records of all communications. Consult a lawyer if your dispute is ignored or mishandled or you suffered harm as a result of errors.
How long does negative information stay on my consumer report?
The reporting period depends on the type of information and how state laws intersect with federal laws, but many negative items remain for up to seven years before they must be removed.
Can I sue a consumer reporting agency for mistakes?
Yes, depending on the nature of the mistake and the harm. If a CRA violates the FCRA and causes harm, or if it fails to properly investigate and respond to a dispute, you may be able to sue.
When should I contact a lawyer about a reporting agency issue?
Consider contacting a lawyer if reporting errors remain unresolved, disputes are ignored, or false information has caused financial or other significant harm.