The FCRA is a federal law that regulates how consumer reporting agencies collect and share your information. It provides you with the right to review your reports and requires that credit bureaus follow reasonable procedures to ensure the information reported about you is accurate and private.
Inaccuracies occur frequently. Research from the FTC suggests that a significant number of consumers have errors on at least one of their credit reports that could impact their ability to obtain favorable loan terms or interest rates.
Inaccuracies often occur because a lender (the “furnisher”) provides incorrect data, or because a credit bureau fails to maintain separate files for individuals with similar names. In other cases, these errors are a result of identity theft.
Generally, most negative information—such as late payments or collection accounts—may stay on your report for seven years. Bankruptcies typically remain for up to ten years.
You should focus on the “Account Information” and “Public Records” sections. Verify that every account listed belongs to you and that the payment histories and balances are accurate. If you find unfamiliar entries, it may indicate a “mixed file” or identity theft.
An inquiry occurs when a business requests to view your credit file. Under the FCRA, businesses must have a “permissible purpose” to access your data. For example, applying for a credit card gives the lender a permissible purpose to pull your report.
A credit freeze restricts access to your credit report, which helps prevent unauthorized accounts from being opened in your name. You can place or lift a freeze at any time by contacting Equifax, Experian, and TransUnion.
The law requires credit bureaus to follow reasonable procedures to assure “maximum possible accuracy.” This means they are not permitted to simply report whatever data they receive; they must take reasonable steps to ensure the information is factually correct.
You should notify the credit bureaus of the error in writing. At Sherman & Ticchio PLLC, we recommend sending your dispute via certified mail. This creates a formal record that the bureau received your request.
To initiate a dispute, you must contact the credit bureaus directly. Provide a clear explanation of the error and include copies of any supporting documentation, such as bank statements or identity theft reports.
Once you submit a dispute, the credit bureau usually has 30 days to conduct an investigation. They will contact the furnisher to verify the information. If the data cannot be verified, it must be deleted or corrected.
A reasonable investigation requires the bureau and the furnisher to actually review the evidence you provided. They generally cannot simply rely on their internal automated systems if those systems are the source of the error.
When a creditor is notified of a dispute by a credit bureau, they are required to conduct a reasonable investigation. They must report the results back to the bureau and, if the info is wrong, notify all other bureaus they report to.
No. The act of disputing an error does not directly negatively impact your credit score. If an inaccurate negative item is removed as a result of your dispute, your score may improve.
A mixed file occurs when a credit bureau combines your credit information with that of another person. This often happens to people with similar names, Social Security numbers, or addresses.
A merged file is another term for a mixed file. It is a technical error where the bureau’s software incorrectly decides that two different people are actually the same person, leading to a cluttered and inaccurate report.
This is a significant issue because you may be held responsible for someone else’s financial history, including their debts or defaults. These errors are often difficult to resolve without legal assistance because the bureaus may accidentally “re-merge” the files later.
Being mistakenly reported as deceased is a serious error that can result in frozen bank accounts and denied credit. If you have been incorrectly declared deceased, you must provide proof of identity to the bureaus. If they fail to correct this, Sherman & Ticchio PLLC is prepared to represent consumers in seeking a resolution.
You should place a fraud alert on your credit reports, file a report with the FTC at identitytheft.gov, and file a police report. You should send formal disputes to the credit bureaus including these documents.
Yes. If an inaccurate background check—such as one containing a wrongful criminal record—causes you to lose a job opportunity, you may be entitled to damages. These reports are governed by the FCRA.
Common errors include reporting criminal records that belong to someone else and showing expunged or sealed records. These errors can significantly hinder your employment opportunities.
If a company takes “adverse action” against you (like denying a job application) based on a report, they must provide you with an Adverse Action Notice. This notice will include the contact information for the agency that provided the report so you can request a copy.
If a consumer reporting agency refuses to provide your file upon request, they are violating your rights under the FCRA. In these instances, seeking legal guidance is recommended.
If you have disputed an error and the bureau or furnisher has failed to correct it, you may have grounds for a lawsuit. A legal claim can help ensure the records are corrected so you aren’t held responsible for mistakes you didn’t make.
Adverse action occurs when a business makes a negative decision based on your credit report or background check report, such as denying a loan or an employment application. The business is required to provide you with a notice regarding this decision.
You may be entitled to compensation for actual financial losses, emotional distress, and statutory damages. Furthermore, the FCRA is a “fee-shifting” statute, meaning the defendant may be required to pay your attorney’s fees if your case is successful.
While you can handle initial disputes on your own, the legal team at Sherman & Ticchio PLLC is prepared to represent consumers when credit bureaus or furnishers refuse to follow the law. We can review your reports and help you navigate the litigation process.
You are entitled to a free copy of your credit reports from Equifax, Experian, and TransUnion.