QUICK ANSWER
Yes. If a credit bureau or data furnisher violates the Fair Credit Reporting Act (FCRA) by reporting inaccurate information in your credit report, failing to adquately investigate and correct errors after you’ve disputed them, or causing you financial or other harm, you may be able to sue and recover actual, statutory, or punitive damages, along with attorney’s fees and court costs.
What Is Inaccurate Credit Reporting?
Inaccurate credit reporting occurs when one or more of your credit reports contains information that is false, inaccurate, incomplete, outdated, misleading, unreportable, or someone else’s. These errors can affect your credit score and may impact your ability to obtain loans, housing, insurance, employment, or other opportunities.
When Does Inaccurate Credit Reporting Violate the FCRA?
Inaccurate credit reporting violates the FCRA when a credit reporting agency or data furnisher fails to comply with the FCRA’s obligations regarding privacy, accuracy, investigations, or corrections.
The FCRA requires consumer reporting agencies- which includes the credit bureaus, Experian, Equifax, and TransUnion- to follow reasonable procedures to ensure maximum possible accuracy of the information they report. It also requires credit reporting agencies to investigate disputes and correct or remove information that cannot be verified.
Furnishers of information, such as lenders and creditors, also have responsibilities to investigate disputes and report accurate information.
A credit report error may indicate an FCRA violation, but legal liability depends on who made the mistake, what caused it, and whether the credit bureau, furnisher, or other party failed to meet its obligations under the law.
Common Examples of Credit Report Errors
Common examples of credit report errors include:
- Accounts that belong to someone else
- Payments incorrectly marked as late or missing
- Duplicate entries about accounts, debts, loans, etc.
- Incorrect account balances
- Outdated negative information
- Incorrect account statuses, such as being marked open when it is closed
- Accounts, debts, loans, and other entries caused by fraud from identity theft
- Inaccurate personal information
- Accounts falsely reported as delinquent or in collections
- Inaccurate bankruptcy-related reporting
- False deceased designations on accounts or the entire report
Reviewing your credit reports regularly can help identify errors before they affect important financial decisions.
Can You Sue for Inaccurate Credit Reporting?
Yes. You may be able to sue if inaccurate credit reporting resulted from violations of the FCRA and caused you harm. Many lawsuits arise after consumers dispute inaccurate information and the errors remain on their credit reports despite the reporting agency or furnisher having an obligation to investigate and correct errors.
Who Can Be Held Liable for Credit Reporting Errors?
Credit reporting agencies, information furnishers, or both may be held liable for credit reporting errors - if they violated the Fair Credit Reporting Act.
- Credit reporting agencies (the credit bureaus): are responsible for maintaining accurate consumer reports and conducting reasonable investigations after receiving disputes.
- Information furnishers, including: banks, lenders, credit card companies, debt collectors, and other creditors, are generally responsible for providing accurate information and investigating disputes forwarded to them.
Liability depends on the specific facts surrounding how the errors came to exist and get reported, and how they are handled once you dispute.
What Must You Prove in an Inaccurate Credit Reporting Lawsuit?
Generally, in an inaccurate credit reporting lawsuit, you must prove:
- Your credit report contained inaccurate information.
- One or more of the credit bureaus or data furnishers violated the FCRA.
- The violation caused you harm.
Depending on the claim, you may also need to show that the credit reporting agency failed to use reasonable procedures or properly investigate your dispute.
What Damages Can You Recover?
Potentially, you may recover compensation (damages) for financial losses, emotional distress, and other harms resulting from FCRA violations.
Depending on the circumstances, compensation may include money for:
- Denied credit opportunities
- Higher interest rates
- Lost employment opportunities
- Out-of-pocket expenses
- Emotional distress
- Statutory damages for certain violations
- Punitive damages in appropriate cases
- Attorney’s fees and costs, where permitted by law
Steps to Take Before Filing a Lawsuit
If you believe your credit report contains inaccurate information, these steps provide guidance in what to do before filing a lawsuit:
Step 1: Get copies of your credit reports from Experian, Equifax, and TransUnion, and review each one carefully for errors.
Step 2: Dispute the inaccurate information with the appropriate credit bureau. Keep copies of your disputes, supporting documents, and proof of submission. Disputing through certified mail helps preserve your rights and creates a document trail.
Step 3: Allow time for the investigation. A credit reporting agency generally must complete its investigation within 30 days, although the period may be extended to 45 days in certain circumstances.
Step 4: Keep records of any harm caused by the inaccurate reporting, including credit denials, higher interest rates, lost employment opportunities, expenses, and emotional distress.
Step 5: Contact a credit reporting lawyer to determine whether the reporting error and investigation may support a legal claim.
How an FCRA Lawyer Can Help
An FCRA lawyer can help by reviewing your credit reports, dispute history, supporting documents, and evidence of harm to determine whether the FCRA violations by the credit reporting agency or information furnisher warrant seeking corrections and compensation through a lawsuit.
An attorney can also offer handle the dispute process for you, offer personalized legal guidance, explain your legal options, and optimize the damages to which you may be entitled.
Frequently Asked Questions
Can I sue a credit bureau for reporting inaccurate information?
Yes. If a credit bureau violated the FCRA by reporting inaccurate information or failing to comply with its legal obligations, you may have grounds to file a lawsuit.
Do I have to dispute the error before filing a lawsuit?
It depends. Some FCRA claims require a dispute before liability arises, while others may not. Whether a dispute is necessary depends on the specific claim and the facts of the case. A credit reporting lawyer can provide legal guidance specific to the facts of your situation.
How long does a credit bureau have to investigate a dispute?
Generally, a credit bureau has 30 days to investigate a dispute, with limited exceptions that may extend the deadline to 45 days.
Can I sue if inaccurate credit reporting caused me to lose a job or have a loan denied?
Yes. If inaccurate credit reporting caused you to lose opportunities, you may have legal claims depending on the facts of your case.
What if the credit bureau says the information was verified?
A credit bureau saying the information in dispute was “verified” after its investigation does not necessarily mean the information is accurate. If you are confident the information being reported is wrong and you have supporting evidence, you can dispute again or speak with a lawyer.
Can I sue for emotional distress caused by credit reporting errors?
Potentially. Emotional distress damages may be available in some FCRA cases when supported by the facts and law.
How long do I have to file an FCRA lawsuit?
Generally, you must file an FCRA lawsuit within two years of discovering the violation or five years from the date the violation occurred, whichever is earlier.