What does the Fair Credit Reporting Act protect consumers against?

The Fair Credit Reporting Act (FCRA) is designed to protect consumers by ensuring the accuracy, fairness, and privacy of information in the files of consumer reporting agencies. The correct answer, which focuses on the circulation of inaccurate or obsolete information, reflects one of the core principles of the FCRA. This law mandates that consumers have the right to access their credit reports, dispute inaccuracies, and seek corrections for any incorrect or outdated information that may affect their credit rating and access to credit. The FCRA aims to minimize the risk of consumers suffering from negative consequences due to erroneous data being disseminated by credit reporting agencies.

This protection is especially critical because inaccurate credit information can lead to denied loan applications or unfavorable interest rates, directly impacting a consumer's financial well-being.