Fair Credit Reporting Act (FCRA) (FCRA)

Fair Credit Reporting Act (FCRA)

In forceFCRA

Summary

If an adverse decision (credit, employment, rental, insurance) is based in whole or part on a report from a consumer reporting or screening company, the person must receive a notice naming that company and explaining their rights. This includes AI-generated scores and profiles when a third party sells them.

Who it applies to

Businesses that use third-party reports about consumers, job candidates or tenants to make decisions in the US.

Penalties

Actual, statutory ($100 to $1,000 for willful violations) and punitive damages; FTC and CFPB enforcement.

Official name: Fair Credit Reporting Act (15 U.S.C. § 1681 et seq.)
Official reference: 15 U.S.C. § 1681m(a); § 1681b(b) (fines de empleo)
Regulator: CFPB and FTC
Official source: Check the sourceHow we verify sources

Obligations and dates

Obligations table
Obligation	Article or citation	Status	Date	Who it applies to	Verification
Adverse action notice based on third-party reports	15 U.S.C. § 1681m(a); § 1681b(b)(3)	In force	Already applicable	Applies if your credit, insurance or rental decisions rely in whole or part on reports or scores bought from a consumer reporting agency. In hiring it applies only if you use background checks or other third-party reports; the assessment does not assume it just because you use AI in hiring.	Verified in the official source on November 4, 2026

Adverse action notice based on third-party reports

15 U.S.C. § 1681m(a); § 1681b(b)(3)In force

Already applicable

When it relates: Applies if your credit, insurance or rental decisions rely in whole or part on reports or scores bought from a consumer reporting agency. In hiring it applies only if you use background checks or other third-party reports; the assessment does not assume it just because you use AI in hiring.
What the rule provides: Identify the reporting company and state that it did not make the decision.
Explain the right to a free copy within 60 days and to dispute inaccurate data.
In employment, send a pre-adverse action notice with a copy of the report before the final decision.
If a credit score was used, disclose it with its key factors.
Typical evidence: Pre-adverse and final adverse action templates
Contract with the reporting vendor
Related base documents: Adverse Automated Decision Explanation Letter
Supporting documents: AI Vendor Management Policy
AI Vendor Due Diligence Checklist
Verification: Verified in the official source on November 4, 2026Checked on govinfo: 15 U.S.C. § 1681m(a)(1)-(4) (notice, agency identity, statement that it did not make the decision, free copy and right to dispute) and § 1681b(b)(3) (employment: copy of the report and summary of rights before the adverse action).