Question: If we use more than one credit report in making a credit decision, do we have to tell the customer about both credit bureaus or is one enough?
Answer: FCRA requires that whenever you use a report from a credit bureau to take adverse action, you must provide the customer with the FCRA notice required in ?615 of the act. Arguably, if one report contained negative information and the second one contained no negative information, you would only need to name the bureau that reported the negative information. However, if the same negative information is in both reports, you should disclose that you used both bureau reports. The customer has a right to know where the negative information resides. Giving the customer the name of only one credit bureau does not accomplish this. Also the customer has a right to a free copy of the credit report when information from the report was used to take adverse action. If you don't name the reporting bureau, the customer doesn't get the free copy.
Note that with the changes to FCRA made by FACTA, the accuracy and completeness of this disclosure becomes more important than ever. Do not leave off information that the consumer has a right and a need to know.
Copyright © 2004 Compliance Action. Originally appeared in Compliance Action, Vol. 8, No. 16, 1/04
First published on 01/01/2004