Credit Reporting Errors
Credit reports are a necessary evil for consumers to access loans and mortgages, but errors contained within — be they the result of identity theft or just poor recordkeeping by creditors — can block them from getting capital or force them to pay more for higher interest rates.
The Federal Trade Commission found in a 2013 study that 21 percent of consumers’ credit reports contained inaccurate information, 13 percent had mistakes that affected their credit scores, and that 5 percent had such glaring problems that they caused loan applications to be denied.
Fortunately for consumers, they are protected by law when inaccurate information ends up in their credit reports. Under the federal Fair Credit Reporting Act, consumer reporting agencies and the companies that provide them with consumers’ data are required to convey accurate information and fix errors once after they have been disputed.
Consumers should check their credit reports from time to time to search for any irregularities and let reporting agencies know as soon as possible if things are amiss. But according to the National Consumer Law Center, consumers simply disputing inaccurate information in their credit reports might not be enough to clear their records.
With help from attorneys from Consumer Attorneys, consumers may be able to fix errors in their credit reports in a timely manner and potentially obtain compensation for damages caused by the mistakes.
Inaccuracies and problems in credit reports
The Fair Credit Reporting Act offers protection and recourse for victims of identity theft. The Act’s purpose is to require consumer reporting agencies to “adopt reasonable procedures . . . in a manner which is fair and equitable to the consumer, with regard to the confidentiality, accuracy, relevancy, and proper utilization of [consumer] information.”
For example, an ex-husband may open a credit card in his wife’s name, stealing her identity. If the wife reports the application as false, the credit reporting agency must research the claim. If the claim is valid, the wife’s consumer report must be corrected. Unfortunately, the reports are often not corrected, and the wife will suffer the consequences.
Or, if someone’s information was stolen on the dark web, or somebody lost their wallet with identifying info the credit agency must not list the transactions done by the identity thief as the victim’s. When the reports are not corrected, the victim can seek a change in their report and compensation for the harm done.
Consumer Attorneys will work with you to correct the errors in your report and obtain compensation for the identity theft.
Mixed Credit Reports
One of the most common inaccuracies that occur in the consumer reporting industry is a “mixed file.” A mixed file is a consumer report in which some or all of the information in the report pertains to an individual who is not the subject of the report. The main cause of this mistake is a consumer reporting agency’s failure to use the full identifying information to match records to the personal identifying information of consumers.
For example, a consumer reporting agency may list accounts that do not apply to a person. We’ve seen agencies attribute an unpaid loan to a person who has not taken the loan. Credit furnishers and landlords may see the loan’s record on the consumer’s credit report and wrongfully deny a loan or an apartment to the consumer.
Consumer reporting agencies may use partial matching and not full identifying information in preparing consumer reports. For instance, agencies might not require a match to full last name and first name, middle initial, full street address, zip code, year of birth, any generational designation, or social security number. This results in an improper report about a consumer.
Consumer Attorneys will evaluate the errors in your consumer report and, if necessary, will proceed in an action to make sure the report is corrected and that you are fully compensated for the mistake.
The credit agencies often use “loose matching algorithms” that cause a party’s credit profile to become combined with another consumer’s credit file. When they assign a deceased person’s credit profile to a live consumer's credit file, the credit score will be reduced to zero. The consumer will face rejection when they apply for a credit card, a home loan, or any other product in which the consumer’s credit is checked.
If you face this problem, Consumer Attorneys will evaluate your credit report and work with you to lift the deceased person’s credit profile from your credit file.
Bankruptcy Reporting Errors
Post-bankruptcy you may be entitled to a fresh start, and improvements to your credit score. But a credit reporting agency may wrongfully fail to update your credit report, adversely affecting your credit score.
For example, a loan that was discharged by a court may wrongfully remain on a consumer's credit report. This inaccurate and misleading listing will cause the consumer to deal with the aggravation, humiliation, and embarrassment of a low credit score and credit denial.
Consumer Attorneys understands this situation and will work to fix your credit report.
Protecting Credit Is Crucial
Consumers’ credit reports contain a wide array of their personal information: where they live, their bill-paying habits, whether or not they have filed for bankruptcy, and even if they have been arrested or sued in the past.
Inaccurate information contained in the reports may force consumers to pay more for loans and mortgages or block them from accessing lines of credit. Worse yet, bad credit reports may stand in their way of getting jobs or insurance policies.
According to the Federal Trade Commission, financial advisers say that consumers should regularly check their credit reports to make sure their information is up to date and error-free.
Under the Fair Credit Reporting Act, consumers may order a free credit report every 12 months. They are also entitled to a free report anytime a company turns them down for a line of credit or for employment if they believe the denial was based on erroneous information in their reports.
Consumers may also obtain free credit reports if they’ve become unemployed and plan on getting a new job within 60 days, if they are depending on public assistance or if they have fallen victim to identity theft.
If a consumer takes issue with information contained in their credit reports, they should file disputes with all three major reporting agencies — Equifax, Experian and TransUnion — as well as any companies they believe are responsible for the mistakes.
Credit Reporting Errors
Daniel C. Cohen
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