Every credit report has a credit score, and lenders use this to decide whether you are eligible for a loan. Nevertheless, errors and misreporting of consumers’ financial records have often caused damaged reputation, job loss, or other negative consequences.
In such cases, it may be possible for you to sue the company that wronged you. However, to do so, you should follow certain guidelines. Contact a legal expert as soon as possible to ensure your rights are protected.
The Fair Credit Reporting Act
The Fair Credit Reporting Act is a federal law that regulates the process of gathering and reporting consumer information, including credit reports and scores. The FCRA holds credit reporting agencies accountable for the accuracy of the reported information. It also requires the consumer to be notified in writing if there is a dispute regarding any reported error.
When it comes to reporting errors, there are three main parts of the act that you need to be aware of:
- Errors must be reported: If a credit reporting agency learns about a mistake in your file, they must report it to all three credit bureaus.
- The consumer is entitled to seek correction of any erroneous information: Under the FCRA, you are entitled to seek correction of any information in your file that is inaccurate, incomplete, or unverifiable.
- The consumer is entitled to obtain an additional free report: The FCRA requires that each consumer is allowed to get a free copy of their credit report from each of the three credit bureaus once per year.
If you notice an error in your file, you can contact the credit reporting agency to report the mistake. However, if the creditor cannot provide proof of the validity of your report’s information, the disputed information must be removed from your record.
The Legal Process
To sue for damages due to inaccurate reporting, you must meet certain criteria. To determine whether you have a case, the following must be true:
- The debt owed must include funds that are delinquent or unpaid.
- The debt must be for a financial obligation owed to you.
- You are not responsible for the debt in question, and the creditor has reported your name to the credit reporting agency as either directly or indirectly responsible for the debt.
- You did not give written permission to this company to use your information.
- You have suffered an injury due to the wrongful action of a third party.
Furthermore, you can take legal action if the company reporting the information violated Section 623 of the FCRA by not complying with the following three rules:
- Reporting the information within 30 days of its receipt
- Proper identification of your name and current address on your file
- Make a notation of any errors on your report.
It is also important to note that to win a lawsuit and recover it helps to prove that you have experienced reputational harm from these errors. You will need to show that the false reporting has caused damage to your personal or professional life.
You should consult qualified Fair Credit Reporting Act lawyers as soon as possible after learning of the error so that you can file your case quickly. Most states have a limitation period of two years from when the error was made, so it is not wise to delay. Your attorney will prepare the legal documents that make up your lawsuit.
Settlements
You may be able to settle the case out of court. This outcome is more probable if the creditor is not conforming to their legal obligations. There are several ways this can happen.
For example, a financial organization may be reporting false information about you because they are not investigating after receiving notice of an error or are not conducting investigations through proper channels. If this is the case and proven in court, you could have a valid settlement claim.
Contact an Attorney
It is essential that you know and understand your rights under the FCRA before you decide to sue for wrongful credit reporting. Consult a lawyer to learn the best strategy to adopt for your particular case.
With a law degree under his belt, Mark Scott understood very early that law communication was a relatively neglected area. He decided to help people by “translating” the language and offering information and advice in a clear, useful, and actionable manner. For this reason, instead of finding him in court, you will most likely find his name online, where he is very active and thriving as a legal columnist. His part of making the world a better place is to make the law a less convoluted maze. He aims to make it easier for people to understand when and how to seek legal counsel, how to proceed in a significant number of legal matters, and to find the proper resources so they can stand up for their rights.
