Bank data & compliance
Consumer Reporting Agency: Definition & Example
Also called: CRA, Credit reporting agency, Credit bureau
What Is a Consumer Reporting Agency?
A consumer reporting agency (CRA) is a company that regularly assembles or evaluates information about consumers and furnishes consumer reports to third parties for decisions about credit, insurance, employment, or housing.
What does consumer reporting agency mean?
The best-known CRAs are the three nationwide credit bureaus: Equifax, Experian, and TransUnion. The definition under the Fair Credit Reporting Act is broader, and it also covers many tenant screening companies, employment background check firms, check verification services, and specialty data companies.
CRAs have significant obligations: following reasonable procedures for maximum possible accuracy, furnishing reports only for a permissible purpose, handling consumer disputes, and providing consumers with their file on request.
Whether a company is a CRA depends on what it does, not what it calls itself. The key questions are whether it assembles or evaluates consumer information and furnishes reports to third parties for eligibility decisions.
Consumer reporting agency example
A tenant screening company compiles credit, eviction, and criminal records on rental applicants and sells reports to landlords, who use them to decide whether to rent. It is a consumer reporting agency and must follow FCRA accuracy and dispute rules.
Related terms
- Fair Credit Reporting ActThe Fair Credit Reporting Act (FCRA) is a federal law that regulates how consumer reporting agencies collect and share consumer information and how others use consumer reports.
- Tenant Screening ReportA tenant screening report is a consumer report a landlord orders from a screening company, usually combining credit, eviction, and criminal record information about a rental applicant.
- Permissible PurposePermissible purpose is a legally valid reason under the Fair Credit Reporting Act for obtaining someone’s consumer report, such as evaluating their application for credit, insurance, employment, or housing.
- Adverse Action NoticeAn adverse action notice is a disclosure required by the Fair Credit Reporting Act when a landlord, lender, or employer takes a negative action based in whole or in part on a consumer report.
- Credit ScoreA credit score is a three-digit number, usually from 300 to 850, that estimates how likely a person is to repay debt based on the information in their credit report.
Consumer reporting agency FAQ
- Is Income Checker a consumer reporting agency?
- No. Income Checker provides applicant-authorized, informational analysis of bank transaction data and is not a consumer reporting agency. Its reports are not consumer reports and do not include credit scores.
- What are the three major consumer reporting agencies?
- Equifax, Experian, and TransUnion.
