Key Takeaways
- Credit report errors include inaccurate, misleading, incomplete, false, outdated, or unreportable information
- Common errors include mixed files, identity theft accounts, false delinquency reporting, and deceased reporting errors
- Credit report errors can affect credit scores, loan approvals, housing opportunities, employment, and insurance rates
- Consumers have the right to dispute credit report errors under the Fair Credit Reporting Act (FCRA)
- If errors aren’t corrected or cause harm, a credit report lawyer helps consumers pursue corrections and seek compensation
What Are Credit Report Errors?
Any information in your credit report that is inaccurate, misleading, incomplete, outdated, or unreportable is an error that you have the right to disptue and fix under the Fair Credit Reporting Act (FCRA).
Consumer Reports found that “having incorrect information on a report has been the No. 1 complaint with the Consumer Financial Protection Bureau” (CFPB) and that “hundreds of thousands of consumers each year…struggle to get errors removed from their credit reports.”
Studies estimate the likelihood of discovering wrongful data in your credit report at 44%, and of discovering serious errors in your credit report at nearly 30%. This means 1 out of every 3 people in the U.S. has a very good chance of being directly impacted by credit report errors.
Check out the Consumer Justice Blog for insights into everyday situations in which credit report errors cause serious harm to U.S. consumers.
Common Types of Credit Report Errors
- Mixed file errors: Your credit and financial information is combined with someone else’s information because of a similar name, birthdate, or Social Security Number
- Identity theft accounts: unauthorized credit cards, loans, debts, or other accounts opened by someone else in your name and included on your credit report
- Inaccurate personal information: wrong names, addresses, employers, or Social Security numbers
- Payment history errors: incorrect reporting of late, missed, or delinquent payments
- Account status mistakes: false reporting about accounts being opened, closed, charged-off, or in collections
- False balance or credit limits: Incorrect balances, utilization rates, or credit limits that impact your credit score
- Bankruptcy reporting errors: old bankruptcies that should have aged-off being reported, or accounts that were discharged being reported improperly
- Deceased reporting errors: wrongfully marked as deceased by a financial institution, lender, store account, or credit bureau. Errors can spread to the Social Security Administration.
- Dupicate entries: the same accounts, debts, loans, or other entries appearing multiple times as exact duplicates or being reported repeatedly in slightly different ways
- Outdated or unreportable information: data that should have aged-off your report or should not be reported at all under state law
- Unauthorized credit inquiries: hard credit pulls that you did not consent to
How Credit Report Errors Harm You
Credit reports are used by decision makers in lending, finance, credit, insurance, hiring, and more, so credit report errors can have serious consequences, causing lost opportunities and signifcant stress.
Common Consequences of Credit Report Errors
- Credit Score Drop. All your hard work maintaining a healthy credit score can end with a rapid and unfair credit score drop.
- Mortgage denials. At any phase of the home-buying process, including after you’ve searched for and found the perfect house, you can be unfairly denied a mortgage.
- Rental denials. Whether you’re looking for a long-term rental for housing, a vacation rental for fun, or a car rental for commuting, you can be flagged as a rental risk and denied.
- Car loan rejections. Even if you’ve saved for months, selected within your budget, and paid every single bill, loan, and debt on time, you can be unfairly turned down.
- Job loss. Whether you’re a new candidate or a current employee, if a healthy credit report is part of your assessment, you can be let go or passed up due to bad data.
- Credit denials. Home equity loans, personal loans, and lines of credit through a bank or lender can be denied without any fault of your own.
- Store account refusals. If you apply for a store card or account with a favorite retail brand, you can be refused rather than rewarded.
- Insurance denials. When you seek insurance or other financial products, a solid credit rating is usually critical, and you can be denied for falsely failing to meet the standard.
- Worse loan terms. Even if you’re approved for a loan, inaccurate or misleading data can mean that you get stuck with worse interest rates and bad loan terms.
- Added to the Death Master File. If you’re falsely reported as deceased, you can be added to the SSA’s Death Master File, losing access to ALL of your finances, benefits, and accounts with one simple keystroke.
- Mental and emotional distress. From missing out on long-awaited opportunities to losing sleep due to worry, or being plagued by anxiety, the toll these errors take is real.
Credit Report Errors at a Glance
| Error Type | Common Consequences |
|---|---|
| Mixed File Errors | Loan or credit denials, worse terms |
| Identity Theft Errors | Debt collections, loan or credit denials |
| Bankruptcy Errors | Credit score damage, denials |
| Deceased Reporting | Loss of access to accounts, money, and benefits |
| Late Payment Errors | Higher interest rates, credit score damage, denials |
| Account Status Errors | Credit score damage, denials |
| Unauthorized credit inquiries | Credit score damage |
| Balance or Credit Limit Errors | Loan or credit denials, worse terms |
What Causes Credit Report Errors?
Credit report errors are the result of a fast and furious data industry that relies on monstrously large corporations to gather, process, and report data for approximately 200 million consumers on a rolling basis.
The information is pulled from public records, creditors, lenders, retail accounts, third-party data vendors, and other sources. Sometimes information is input incorrectly so that typos and data entry mistakes show up or snowball across accounts.
But most of the errors are due to the massive volume of data handled and processed by automated systems with very little human oversight. Data mismatches, sorting errors, and mixed files are a regular occurence. This is made worse by an emphasis on maximizing corporate profit over ensuring data accuracy.
Top Causes include:
- Clerical mistakes and data entry errors
- Mismatching, gathering, and sorting errors
- Identity theft errors
- Wrong data being sent by the companies that furnish it
- Reinserting accounts
- Not updating systems or relying on old information
Your Rights Under the Fair Credit Reporting Act
In response to the high incidence of credit report mistakes, federal lawmakers passed the Fair Credit Reporting Act (FCRA) to protect consumers.
The FCRA applies to all consumer reporting agencies, which are the companies that create consumer reports, including credit bureaus (Experian, Equifax, and TransUnion), background check companies, tenant screening companies, insurance reporting companies, and others.
“Whenever a consumer reporting agency prepares a consumer report it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.”
The FCRA also gives you the right to:
- Have an accurate credit report
- Review your credit reports for free
- Know which data in a credit report was used to deny you an opportunity
- Dispute credit report errors
- File lawsuits against the responsible parties
- Seek compensation for harm suffered
- Make the consumer reporting agency pay for your legal costs and fees
In fact, the FCRA plays such a critical role in protecting consumers from credit report errors, the lawyers who help fight these mistakes are frequently called FCRA lawyers.
The FCRA used to guarantee free access to your credit reports once annually, but since approximately 2020, you now have weekly access to your own credit reports through annualcreditreport.com.
How To Dispute a Credit Report Error
Under the Fair Credit Reporting Act, you have significant rights to fight credit report errors. Taking these three steps will set you on the path toward recovery.
- Get copies of your credit reports. You have a right to receive and review a copy of your credit report at the time that it’s run in connection with an application or opportunity. Or, you can request one directly from each of the credit bureaus, or access all three at the verified site annualcreditreport.com.
- Review your credit reports for mistakes. Carefully review your credit reports from all three credit bureaus- Equifax, Experian, and TransUnion. Go through line by line, highlighting or clearly marking any errors in your personal, financial, and account details. You are looking for any inaccurate, misleading, incomplete, outdated, duplicate, or unreportable information.
- Gather evidence. You’ll need to include copies of supporting documents and reference them in your dispute letter.
- Write a dispute letter. Prepare a clear and thorough dispute letter, listing specific errors, explaining why the information is wrong, and describing the evidence you have to support your position. What is wrong, why it’s wrong, and what proof you have.
- Submit your dispute.* You file a credit report dispute with the credit bureau that reports the errors using their online dispute portal or mailing address. We recommend filing via certified mail to preserve all of your legal rights and create a paper trail that is under your control, including proof of receipt.
- Keep copies of everything. Maintain a copy of the letter and the documents for your file, along with the mail receipt.
- Track the timing. The credit bureaus have 30 days to respond in most instances.
- Consider legal action. You can explore legal options with a credit report lawyer at any point in the process, including the option to file a lawsuit and seek compensation.
*If a deceased reporting error has spread to the Social Security Administration, there’s a more involved process for clearing it. See our Deceased Reporting practice page.
When Should You Contact a Credit Report Lawyer
Many people search, “Do I need a lawyer for a credit report dispute?” The answer is no. You have the right and ability to dispute credit report errors on your own. So, the real question is, “When should I contact a credit report lawyer for help?” This is a different question altogether.
Correcting credit report errors is frequently turned into a complicated and convoluted process by the credit bureaus and other companies involved.
Reasons to Contact a Credit Report Lawyer
- Your dispute is ignored
- Your dispute is not adequately investigated
- The information in dispute is falsely confirmed as accurate by the credit bureau
- The information in dispute is removed but returns again
- You suffered financial or other harm as a result of a credit report error
What Does a Credit Report Lawyer Do?
A credit report error lawyer navigates the entire process with you, from the first minute you realize there’s a credit report error until the final moment when you get correction and compensation.
- Researches and explains the law. Understanding the specific facts of your situation in light of the applicable law are how a lawyer builds a strong claim. A lawsuit should go after the credit bureaus using every possible legal option available.
- Understands the problems. An experienced credit report lawyer has seen, heard, and handled every type of credit report error.
- Anticipates legal challenges. A lawyer knows the tactics used by the credit bureaus and other companies to delay doing anything to fix credit report errors.
- Provides personalized legal guidance. A credit report lawyer helps you review and understand your credit report, where the information is coming from, identify and gather necessary evidence, craft and file legally sound dispute letters, and advise you of your rights and best practices along the way.
- File a strategic lawsuit. If your credit errors aren’t corrected or the fallout persists, a lawyer files a lawsuit to hold the credit bureaus accountable.
- Seeks compensation. If you’ve been harmed by credit report errors and you’re entitled to compensation, a lawyer knows how to make the claim and maximize the potential outcome.
How Much Does a Credit Report Lawyer Cost?
The Fair Credit Reporting Act contains a fee-shifting provision which allows you to get legal help from an attorney without paying anything upfront or out of pocket. If you work with a credit report lawyer who uses this fee model, the credit bureaus pay your legal expenses when you successfully challenge them.
You can also get a free consultation so that you pay nothing to have your case evaluated by a lawyer.
Contact Consumer Justice Law Firm
We have one of the largest credit reporting law firms in the nation for a reason. Our team of experienced consumer protection attorneys are dedicated to protecting your consumer rights under the FCRA.
If you’ve been harmed by credit report errors, reach out for a free consultation and personalized legal action plan from Consumer Justice Law Firm.
Frequently Asked Questions
How can I check my credit report?
If you’re going through a credit check process, you’re entitled to receive a copy of your credit report at the time that it’s run. If you just want to stay current, you are able to check your credit report for free once per week at each of the credit bureaus- Experian, Equifax, and TransUnion. The authorized website annualcreditreport.com is a great resource for this. Holders of certain credit cards can also get credit snapshots online or through the credit card app.
Can credit report errors lower my credit score?
Yes. Information in a credit report is used to calculate your credit score. Each credit bureau gives different weight to different factors when calculating the score. Errors in a category that is heavily weighted (such as late or missing payments) can have a significant impact on your credit score.
Is ok not to dispute errors on a credit report?
No. There is no reason to avoid disputing errors on a credit report. Even minor credit report errors should be disputed once you’re aware of them. Small errors can snowball. Even errors that seemingly improve your profile (like a mixed credit error with data that is stronger than yours), can work against you by altering debt, income, and asset data and linking you to someone else’s financial behavior outside your own control.
Can I sue for credit report errors?
Yes. There are some errors that only warrant a lawsuit if they cause significant harm. There are some errors that, while annoying and in violation of the law, aren’t the kind that get handled through a lawsuit. And there are some errors that are so egregious, a lawsuit can be filed immediately. The facts of every client and every case differ.
What are the most common credit report errors?
Mixed credit files showing someone else’s information in your credit report are common errors. Others include account status and payment history errors and duplicate entries.
How long does a credit bureau have to investigate a dispute?
Under the FCRA, a credit bureau typically has 30 days to investigate and respond to a dispute.
Is compensation available for FCRA violations?
Yes. If you are harmed by FCRA violations, including credit report errors, compensation may be available.
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