Contrary to some people’s belief lender is not mandated by the law to report consumer data to the credit bureaus. Many lenders do so because they rely on the information provided by the credit bureau regarding the credit rating and credit history of an individual to make lending decisions. This kind of information can only be present if lenders are willing to share the information that they have with the credit bureau as well. So most of the lenders that use credit bureaus to access the consumers information also share the information that they have on their consumers as that is a fair policy and the only way that the credit reporting system can survive.
The Fair Credit Reporting Act lists guidelines and requirements that lender needs to follow in order to report data to a credit bureau. This involves having a certain amount of technological and equipment facilities so as to ensure timeliness and accuracy of the data reported. The lenders also are required to have a system in place in order to respond to disputes in a timely manner. In order to subscribe to the facilities of a credit bureau lender is usually required to pay a subscription fee and have certain facilities, Labour, equipment and technology in place.
The Fair Credit Reporting Act also lists guidelines that the lender is supposed to follow in order to report to the credit bureau which includes not knowingly reporting inaccurate information, updating information regularly and responding to disputes about the accuracy of an information within a specified period of time which normally ranges from 30 to 45 days.