Old debts and settled accounts are not supposed to show up on background and credit checks.
While there are many types of inaccurate information that can be wrongly reported on a credit report, an especially infuriating kind is information that is obsolete.
My Credit Report Has Incorrect Information - What Should I Do?
When your credit report contains information that shouldn't be there, not only is it a hassle to deal with, but it can also lead to real, life-changing consequences. Many people discover the inaccurate information is keeping them from obtaining a mortgage or a loan. If you find information that is wrong or outdated on your credit report, do not be discouraged. Incorrect information on credit reports is more common than you might think, and there are steps you can take to address the issue. In this article, we will focus on a specific type of inaccurate information on a credit report: obsolete (or outdated) debts.
Reporting of Old Debts
While there are many types of inaccurate information that can be wrongly reported on a credit report, an especially infuriating kind is information that is obsolete. Under the Fair Credit Reporting Act (FCRA), certain kinds of debts cannot be listed on your report after seven years (or ten years, for some bankruptcy cases). Among those are accounts that were sent to collections or charged off, civil lawsuits and judgments, paid tax liens, Chapter 13 Bankruptcies, and several other types of debts. For example, if you defaulted on your student loans and they were sent to collections, they should only be reported for about seven years.
This federal law was enacted to protect consumers from harm caused by old or paid debts being reported on their credit reports or background checks. That's why it specifies a timeline after which certain delinquencies will no longer be listed. This means that there is a statute of limitations included in the FCRA that prohibits the reporting of old debts. Reporting certain debts beyond that statute of limitations is thus in violation of the FCRA. It is critical to note that while outdated information cannot be reported on your credit report, debt collectors may still be able to collect on that debt.
What Can I Do?
If you determine that your credit report contains outdated information, the first thing you should do is dispute the information with the bureau that produced the report. If all major credit reporting agencies (Equifax, Experian, and TransUnion) are reporting it, send a dispute letter to each agency. The credit reporting bureaus will notify the entity that reported that debt to them (the holder of the debt – the debt collector or loan servicer) of the issue. Under the FCRA, the credit reporting agencies have 30 days from the date of receipt of your dispute to investigate the issue and correct it. They are also required to inform you of the results of their investigation.
You might be wondering how to successfully dispute credit reports. The first step is that your dispute should be in writing. Do not dispute the reporting over the phone or on the credit reporting agencies’ websites, as that will be more difficult to prove in a potential lawsuit. You should send the dispute by mail, in a way that can track the receipt of the dispute letter (such as certified mail or with a return receipt).
As far as the content of the dispute, we suggest you keep it brief. Do not go into any unnecessary details, but give the credit reporting agencies enough information to understand what the problem is and correct it. Of course, include your personal information, and enough information about the account they are erroneously reporting so that the credit reporting agencies can find it in your file. Remember to always keep records of everything related to your dispute and any interaction you have with Equifax, Experian, or TransUnion.
Can I File a Lawsuit for Incorrect Information on My Credit Report?
Yes, it is very possible that we will be able to sue on your behalf. As mentioned above, after you dispute the information, the credit reporting agencies have 30 days to respond to your dispute. If they do not correct the inaccurate information, we might be able to sue. The end goal of the lawsuit would always be to correct the inaccurate information on your credit report, but if you’ve suffered real financial and/or personal adversity, a settlement of at least $10,000 is common. Eventually, if your case does not advance to trial, we will be able to settle your claim with the defendants in your case. Due to the ever-increasing reliance on background and credit information, and the sheer amount of data being processed, FCRA lawsuits are becoming increasingly common. Click here to contact our legal team to schedule a time to discuss your case.