Which federal legislation allows borrowers to receive a free copy of their credit report annually?

The Fair Credit Reporting Act (FCRA) is the federal legislation that enables borrowers to obtain a free copy of their credit report once a year from each of the three major credit reporting agencies: Experian, TransUnion, and Equifax. This provision aims to enhance consumer protection by giving individuals the opportunity to review their credit reports for accuracy and to identify any potential fraud or errors that may affect their creditworthiness.

The FCRA established the framework for how consumer credit information is collected, used, and shared. By allowing access to free annual credit reports, the act promotes transparency and empowers consumers to manage their credit more effectively. This legislative approach is crucial in helping borrowers to make informed financial decisions and to take corrective action if any discrepancies are found in their credit history.

The other options pertain to different aspects of consumer financial protection and do not include provisions specifically related to free access to credit reports. For instance, the Equal Credit Opportunity Act focuses on prohibiting discrimination in lending, the Real Estate Settlement Procedures Act regulates disclosures related to real estate transactions, and the Home Mortgage Disclosure Act requires lenders to collect and disclose information about their mortgage lending activities to ensure compliance with fair lending laws. Each of these serves important functions but does not provide the specific benefit of free annual