What is a Consumer Reporting Agency?

Consumer Reporting Agencies, or “CRAs” for short, are companies that gather and provide detailed credit information on individual consumers.

They are governed by the Fair Credit Reporting Act (FCRA) and primarily function as information clearinghouses providing credit information on borrowers to lenders, who use that information to assess the borrower’s creditworthiness and ability to repay his or her loan. Employers may also use a Consumer Reporting Agency to initiate a background check on a potential employee. Your credit score is based on the information provided in your credit report by the Consumer Reporting Agency.

Who are some consumer reporting agencies?

The “big three” credit bureaus – Experian, Equifax, and Transunion – qualify as Consumer Reporting Agencies.

However, while these may be the three names you are most familiar with, they are not the only CRAs in existence. Smaller credit bureaus, such as CSC Credit Services, may operate in partnership with one of the other consumer reporting agencies, or completely independently.

What do consumer reporting agencies do?

Under the Fair Credit Reporting Act, consumer reporting agencies are required to follow certain guidelines when handling your credit report information. Some of their responsibilities under the FCRA include:

  • If you dispute information that is contained in your credit report, the CRA is required to take steps to verify whether or not that information is accurate.
  • If a negative item is removed from your credit report as a result of your dispute, and the information is reinserted in your credit report, you must be notified in writing within five days.
  • Under the Fair Credit Reporting Act, the Consumer Reporting Agency may not retain negative information on your credit report in excess of a certain period of time. For instance, late payments, judgments or accounts sent to collections may only stay on your credit report for seven years from the date of delinquencies. Bankruptcies can stay on for up to ten years, and tax liens stay on your credit report for up to seven years after the date that they are paid in full.