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How Credit Reporting Agencies Work

Credit Reporting Agencies and Your Rights
Keep yourself informed with what's going on with your credit. A bad report could prevent you from buying your own home.
Keep yourself informed with what's going on with your credit. A bad report could prevent you from buying your own home.
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As we mentioned earlier, credit reporting used to be a closed system. Consumers had no idea what information was on their credit report, why they were denied credit or if their credit reports contained mistakes. Also, in the past, credit reports only contained negative credit events, not positive information. They were also allowed to share "lifestyle" information about consumers, like sexual orientation and reported problems with drugs or alcohol [source: PBS].

In 1971, the U.S. congress enacted the Fair Credit Reporting Act, the first legislation protecting the rights of consumers when dealing with credit reporting agencies. U.S. citizens, under the Fair Credit Reporting Act, have a right to:

  • a complete copy of your credit report (for a fee)
  • a free copy of the report with the negative information, if you're denied credit
  • know exactly who has requested a copy of your credit report in the past six months
  • report errors on a credit report and have the credit reporting agency respond within 30 days
  • have proven errors removed within 30 days
  • add comments to your credit report to tell
  • have negative credit events removed from your report after 7 to 10 years
  • restrict access to your credit report and block credit reporting agencies from selling your information to credit card companies and other marketing firms


The Fair and Accurate Credit Transactions Act of 2003 (FACTA) goes even further, giving U.S. citizens the right to request one free copy of their credit report from each of the Big Three credit reporting agencies every year. FACTA also includes several provisions protecting against the growing problem of identity theft, which we'll talk about in the next section.

Here's how you request a free copy of your credit report, as established by FACTA:

  1. You can request a report by phone at (877) 322-8228, online at, or by mailing this request form to the following address: Annual Credit Report Request Service P.O. Box 105281 Atlanta, GA 30348-5281
  2. At, select your state from the pull-down menu and press "request report."
  3. On the following page, enter your personal information (name, birth date, social security number and current address).
  4. You will then be asked to choose from which of the Big Three credit reporting agencies you want to request a report. You can choose to request a report from a particular agency or from all three (remember, you can request one copy from each CRA once every 12 months).

The free annual copy of your credit report doesn't include your credit score, which can be purchased directly from the individual CRAs for around $6. You can also purchase as many credit reports as you want from each of the Big Three CRAs. The price for a basic credit report is under $10.

Now let's talk more about errors and fraud related to credit reporting agencies.