What is a credit report?

Although this term is widely used, the law that governs the reporting of credit matters, the Fair Credit Reporting Act (“FCRA”) actually doesn’t use the term at all. It discusses “consumer reports” and “consumer disclosures.” 

“Consumer reports” are any written, oral, or other communication of any information by a consumer reporting agency (“CRA”)(such as Equifax, Experian, or TransUnion - the three big players) which compiles and generates reports on consumer’s credit-bearing on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or part for the purpose of service as a factor in establishing your eligibility for:

(A) credit or insurance to be used primarily for personal, family, or household purposes; 

(B) employment purposes; or 

(C) any other purposes authorized under [other parts of the FCRA] [1]


"Consumer disclosures” are the disclosures of the information in your file at the CRA. 

The difference is important to the extent of the responsibilities the CRA has under the FCRA. A consumer report is communicated to a third party (such as when you apply for a credit card or a home loan) and under the law, the CRA has a duty of “maximum possible accuracy” of the information contained in those reports.[2]  A consumer disclosure, however, does not have this standard, as it is not communicated to anyone other than you (such as when you contact a CRA to get a copy of your “credit report”). Instead, a CRA’s responsibilities for disclosures come when you dispute the accuracy of something in the disclosure.
 
Kellam T. Parks
Managing Member of Parks Zeigler, PLLC