Credit Report Errors

Credit reporting errors can block loans, housing, employment, and insurance pricing. When a bureau or furnisher keeps reporting false information after it should have been corrected, the Fair Credit Reporting Act may give you a real claim.

Overview

When a Credit Reporting Error Becomes a Legal Case

The Fair Credit Reporting Act requires credit bureaus and data furnishers to use reasonable procedures, investigate disputes, and stop reporting information they cannot verify accurately. In practice, many cases arise because the system still relies on rushed, automated responses instead of a real review.

A case usually becomes viable when an error remains after a proper dispute, reappears after deletion, or causes a concrete problem like a credit denial, higher interest rate, lost housing opportunity, or employment issue. Those facts often matter more than the abstract existence of a bad tradeline.

We handle FCRA cases on contingency. That means no upfront fee, and if the case succeeds the statute allows recovery of attorney fees from the defendant. We have litigated against the major bureaus and a wide range of furnishers, including banks, servicers, debt buyers, and student-loan companies.

Common Credit Report Errors

Mixed Files

A mixed file occurs when another person's accounts, addresses, or public records appear on your credit report. This frequently happens to people with common names, family members with similar names (such as Jr. and Sr.), or individuals whose Social Security numbers differ by only one or two digits. Mixed files can devastate your credit score overnight by loading your report with someone else's delinquent accounts.

Identity Theft

When someone opens accounts in your name or uses your personal information to obtain credit, those fraudulent accounts can appear on your credit report. Even after you report the identity theft to the bureaus and provide a police report and FTC Identity Theft Report, the bureaus sometimes fail to remove the fraudulent accounts or allow them to reappear after deletion.

Outdated Information

The FCRA establishes strict time limits on how long negative information can remain on your credit report. Most derogatory items must be removed after 7 years, and bankruptcies after 7 or 10 years depending on the chapter. When bureaus continue reporting items beyond these time limits, they are violating the law. Accounts that were included in a bankruptcy discharge must also be reported with a zero balance.

Incorrect Balances & Account Status

Furnishers sometimes report incorrect balances, wrong payment histories, or inaccurate account statuses. A paid-off account may show as open with a balance. A current account may be reported as 30, 60, or 90 days past due. A discharged debt may still show as active and owing. These errors can significantly lower your credit score and prevent you from qualifying for loans and housing.

Your Right to Dispute

The FCRA gives every consumer the right to dispute inaccurate information on their credit report. When you file a dispute, the credit bureau is required by law to conduct a "reasonable investigation" within 30 days. This means they must contact the data furnisher, review the evidence you provide, and either verify, correct, or delete the disputed information.

In practice, the credit bureaus often conduct superficial, automated investigations that amount to nothing more than sending an electronic form to the furnisher and rubber-stamping whatever response comes back. This process, called "e-OSCAR," has been widely criticized by courts and consumer advocates for its inadequacy. When a bureau fails to conduct a genuine investigation of your dispute, it may be liable under the FCRA.

We recommend disputing errors in writing by certified mail so you have proof of what you sent and when. Include copies (not originals) of any supporting documents such as payment receipts, account statements, court orders, or identity theft reports. Keep copies of everything you send. If the bureau does not resolve the dispute properly, that written record becomes critical evidence in a lawsuit.

When to Sue: Furnisher & CRA Liability

There are two types of defendants in FCRA cases: credit reporting agencies (Equifax, Experian, TransUnion) and data furnishers (banks, lenders, servicers, and collection agencies that report information to the bureaus).

CRA liability arises when a credit bureau fails to follow reasonable procedures to ensure maximum possible accuracy (Section 1681e(b)) or fails to conduct a proper reinvestigation after receiving a consumer dispute (Section 1681i). If you disputed an error and the bureau verified it without conducting a real investigation, or if the error reappears after being corrected, the bureau may be liable.

Furnisher liability arises when a company that reports information to the bureaus fails to investigate a dispute that has been forwarded by a CRA (Section 1681s-2(b)). If your bank or loan servicer received notice of your dispute from the credit bureau and responded inaccurately, or failed to respond at all, they may be liable for damages.

Klein & Sheridan frequently sues both the CRA and the furnisher in the same case. This dual approach maximizes pressure on both parties and often leads to faster resolution and higher settlements.

Damages Available Under the FCRA

Actual Damages

These include the tangible financial harm caused by the credit report error: higher interest rates you paid because of a lower credit score, denied loan applications, lost housing opportunities, lost employment, and out-of-pocket costs from addressing the error. Actual damages also include compensation for emotional distress such as stress, anxiety, loss of sleep, and embarrassment.

Statutory Damages

For willful violations of the FCRA, you can recover statutory damages of $100 to $1,000 per violation even if you cannot prove specific financial harm. A company acts willfully when it knows about the law's requirements and disregards them, or acts with reckless disregard for whether its conduct violates the law.

Punitive Damages

In cases of willful violations, courts may also award punitive damages to punish the defendant and deter future violations. There is no cap on punitive damages under the FCRA.

Attorney Fees & Costs

The FCRA requires defendants to pay your reasonable attorney fees and litigation costs if you prevail. This is what allows us to take FCRA cases on contingency with no upfront cost to you.

Signs You May Need Our Help

  • You found accounts on your credit report that are not yours
  • You disputed an error and the credit bureau came back saying it was "verified"
  • A negative item was removed from your report but then reappeared
  • You were denied a mortgage, car loan, or credit card because of inaccurate information
  • Your credit report still shows debts that were discharged in bankruptcy
  • You lost a job opportunity because of incorrect information on a background check
  • Someone else's information keeps appearing on your credit report

Frequently Asked Questions

Do I need to dispute with the credit bureau before I can sue?
For claims against the credit bureau (CRA), a prior dispute is generally required to show that the bureau was on notice of the error and failed to correct it. For claims against furnishers under Section 1681s-2(b), you must first file a dispute with the CRA, which then forwards notice to the furnisher. For claims based on the CRA's failure to ensure maximum possible accuracy under Section 1681e(b), a prior dispute may not be required. We evaluate each situation individually during your free consultation.
How much does it cost to hire you for an FCRA case?
Nothing upfront. We handle FCRA cases on a contingency fee basis, meaning we only get paid if we recover money for you. The FCRA also includes a fee-shifting provision that requires the defendant to pay your attorney fees if you prevail. This structure means there is no financial risk to you in pursuing your claim.
How long do I have to file an FCRA lawsuit?
The FCRA has a two-year statute of limitations that begins running from the date you discover (or should have discovered) the violation. There is also an absolute five-year outer limit from the date of the violation itself. Because these deadlines can be complex to calculate, we strongly recommend contacting us as soon as you become aware of a credit reporting error that is not being corrected.
What should I do if I find an error on my credit report right now?
First, pull your credit reports from all three bureaus at AnnualCreditReport.com. Document every error you find. Then file a written dispute by certified mail (not online) with each bureau that is reporting the error. Include copies of supporting documents. Keep copies of everything you send. If the dispute does not resolve the issue, or if you have already disputed and been denied, call us immediately for a free case evaluation.
Can I sue if a background check company reported incorrect information?
Yes. Background check companies are considered consumer reporting agencies under the FCRA and are held to the same accuracy standards as Equifax, Experian, and TransUnion. If a background check company reported inaccurate criminal records, eviction history, or other negative information that cost you a job or housing, you may have a claim. Additionally, employers must follow specific disclosure and authorization procedures before using a background check, and failure to do so is a separate FCRA violation.

Your Credit Report Should Be Accurate

If the credit bureaus or data furnishers are refusing to fix errors on your credit report, you have the right to sue and we can help. Your consultation and case review are completely free.

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