Fair Credit Reporting Act

The Fair Credit Reporting Act (FCRA) is the federal law that regulates the collection, use, and disclosure of consumer reports. It applies to credit reports, employment-background checks, tenant-screening reports, and similar information used in insurance underwriting and pricing.

For insurers, FCRA matters because many AI models use credit data or other consumer-report information as inputs. The law requires users of consumer reports to have a permissible purpose, to ensure the information is accurate, and to provide adverse-action notices when a consumer report contributes to a denial, higher premium, or other adverse decision.

FCRA compliance is separate from but related to insurance unfair-discrimination laws. A model may comply with one while violating the other. Carrier AI governance programs should track which inputs are consumer reports, where they come from, and whether adverse-action notice obligations apply. See our AI vendor risk assessment checklist.