History

• This act is an amendment of the Fair Credit Reporting Act of 1970 and was itself altered by the Fair and Accurate Credit Transactions Act of 2003.
  
  

Intent

• This act's purpose was to protect the consumer from the negative impacts of false claims on a credit report, as well as to increase the banking system's ability to accurately rate risk.
  
  

Function

• The act required any agency that pulled a credit report to inform the consumer of their actions and obtain written authorization. Upon receiving news of a negative decision based upon the credit report's contents, the consumer has up to 60 to ask the agency that supplied the report for a free copy. She is also entitled to a free copy of her credit report every year through the website annualcreditreport.com.
  
  

Warning

• While the act generally strengthen consumer protection, it did allow for certain businesses to prescreen credit reports to send out unsolicited offers of credit and limited the ability of states to pass stronger laws.
  
  

Considerations

• Some employers chose not to run credit reports on employees as a result of the act because they feared they would accidentally run afoul of the statute.