Meets FCRA Requirements (2022 Explanation)

If the account information on a credit report is disputed by the consumer, but the credit agency determines the information is correct, the reporting agency may add a statement to the account that it “meets FCRA requirements”.

In other words, the information is considered wholly accurate and in compliance with federal regulations. 

The outcome of the dispute though depends on the gravity of the inaccuracies as lenders are already mandated to provide accurate credit reports.

The Fair Credit Reporting Act (FCRA) requires lenders to accurately report consumer credit activity.

If there are significant errors, the consumer is encouraged to take legal action and/or provide supporting documentation for their case.

What is the purpose of FCRA?

The FCRA was established to protect consumer rights, and ensure the accuracy of information reported to the three credit bureaus, Experian, TransUnion, and Equifax.

The regulation clearly defines what should be included when reporting customer information.

It also states consumers have the right to dispute this information if they consider it to be inaccurate.

Because it is a consumer protection regulation, FCRA tasks the lenders and reporting agencies to take seriously the disputes initiated by borrowers.

Report accurate information in credit report

However, the law also assumes it is in a lender’s best interest to report accurate information, so the burden to prove errors exist often remains with the consumer.  

How to dispute credit report errors?

All three credit reporting agencies (Experian, TransUnion, Equifax) have specific procedures in place for consumers to dispute inaccuracies.

These procedures can be located on each agency website and consumers have the option of filing disputes online or via mail.

Depending on the instructions, disputes may either be filed separately or submitted all at once.

It is the responsibility of consumers to obtain and review their credit reports and make note of any inaccuracies.

Consumer credit report review

It is also important that consumers review a report from each of the three agencies because the information reported by each may not be consistent.  

How long does it take to resolve a credit report dispute?

Once the dispute is submitted, the credit reporting agency has 30-45 days to resolve the dispute.

The reporting agency contacts the lender and requests documentation to support the information being reported.

If the dispute is regarding personal information, such as name or address, documentation is requested either from the consumer or from whoever is responsible for initiating the dispute.

After the credit reporting agency has reviewed the necessary documentation, a decision is made as to whether the information reported by the lender is accurate and in compliance with FCRA.

If the decision deems that the report is inaccurate, the agency corrects or entirely removes the information from the credit report.

Otherwise, the information in the report remains unchanged and a statement “meets FCRA requirements” is sometimes added to the account, which basically confirms the information is accurate.

A credit reporting agency will only make corrections on their report, so it is necessary to file disputes with Experian, TransUnion, and Equifax if the error exists in all three.

Otherwise, you may find yourself in a situation where only one credit agency removes the derogatory information whereas the others continue to report it.

Why do credit reporting agencies have different information?

Lenders pay for these credit reporting agencies to collect and maintain borrower information, and report it back to them when requested.

The cost to do this, depending on the customer loan volume reported monthly, can be considerable.

As a result, lenders often only favor one credit agency to receive very detailed information over the remaining two agencies, who receive only limited information or none at all.

This is especially true of very small lenders, such as a local credit union.

The three current agencies (Experian, TransUnion, Equifax) are competitors which derive their profit margins from lender service agreements.

Created in the late 19th century, the initial purpose of these agencies was to provide banks with a reliable gauge of borrower risk.

Provide banks with gauge of borrower risk

While much of the data collected in previous eras is now illegal, concerns remain that lender bias is prevalent when collecting consumer data for the purpose of forecasting probability of default.  

What happens when account information “meets FCRA requirements” but the consumer disagrees with the decision?

The reality is that most credit reports contain errors. Many are insignificant, so most consumers are not inclined to correct them if they are aware the errors exist.

Even when the information is harmful to a borrower’s credit rating (late payments, charge-offs, etc.), the sheer volume of disputes being reviewed often creates a default assessment of ‘accurate unless obviously inaccurate.’

This is partly because the lenders are heavily regulated, so it is assumed that accuracy is in their best interest. 

Ideally, the credit reporting agency would remain neutral when researching a dispute, but that’s not always the case.

Since lenders are assumed to report accurate information due to operating under heavy regulation, it is critical for consumers to provide written documentation when disputing an item on their credit reports.

Reporting errors do occur, but the onus to prove it lies solely with the consumer.

Often consumers need to enlist legal means in order to have their interests represented and therefore receive a favorable outcome. 

Will providing documentation help my dispute?

It is in the best interest of the reporting agency to be accurate. If an account is labeled “meets FCRA requirements” but the consumer disagrees, providing documentation is the next step and, if accurate, will likely swing the decision in the consumer’s favor.

Provide documentation when disputing credit

When a lender makes a decision based on a borrower’s credit report, the borrower may have no knowledge of reviewed information.

Depending on personal circumstances such as prolonged illness, divorce, death of a partner or close family member, months or years may pass before a borrower is aware of derogatory credit information, and often only when it becomes necessary to apply for credit.

The information may or may not be correct, but the closed loop between lender decisions, based wholly on information provided by the credit reporting agencies, and agency reporting based wholly on information assembled and reported by lenders, creates a legitimate concern for consumers.

Do I have to pay to see my credit score?

It is in fact disallowed for a lender to share credit report information directly with a borrower, whether or not the application was approved.

This practice is ethically questionable because the borrower must then pay the credit reporting agency to see information the lender already knows, which could be considered a double penalty if their application was denied.

This is a point of contention for many consumer advocacy groups because credit reporting agencies are legally allowed to charge consumers monthly or annual fees to access their own credit information.

Consumer advocacy groups challenge the legality and ethics of requiring payment from consumers, particularly when initial access is first needed when a borrower becomes aware of derogatory credit through loan denial.

How to monitor my credit report for free?

It is important that consumers keep a watchful eye on their credit reports. Currently, the only free access is via annualcreditreport.com.

Depending on circumstances, the website may only offer a hard copy for review.

There are other limitations. As the name suggests, it is one credit report per year, per agency.

However, borrower information is submitted monthly to credit reporting agencies, so it is sometimes necessary to monitor personal credit more frequently than once per year.

One possibility is to request a copy from each of the three agencies, staggered over the course of a year.

Annual credit report service

Many consumers use annualcreditreport.com as a credit knowledge baseline.

Depending on the situation, a temporary monthly subscription to one or all of the three agencies may be necessary to make sure any issues are resolved.

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