Have you consistently paid your bills on time only to get turned down when you applied for credit? This might be the result of credit reporting errors that happened beyond your control.
If that’s the case, you’re not alone: One in four American consumers has uncovered errors on their credit reports. These mistakes can take all shapes and sizes:
- Billing errors (e.g., a utility company charged you the wrong amount or your student loan servicer applied your payment to another person’s account).
- A previous lender is still reporting old information even though you closed out that account.
- Your debt-to-income ratio wasn’t updated after you paid off a significant amount of debt.
- Your spouse was falsely reported as deceased, even though they’re still paying dozens of other credit accounts.
- Your insurer disputed and never paid a medical bill – and never notified you of the issue.
In any case, you end up marked as delinquent or with another negative status on your credit file. Fortunately, with credit reporting errors, you’re going to be easily able to identify the problem. Incorrect payment histories will always be documented. (Keep in mind, we offer more specialized guidance for mixed credit reports, which can be more complicated and harder to uncover.)
Getting an up-to-date and correct credit report, as outlined in the Fair Credit Reporting Act (FCRA), allows you to quickly move on with your financial goals. It’ll help you get the necessary credit for a new home or vehicle – and get it at the best rate possible.
Let’s look at how to make that happen.
Correcting credit reporting errors
The good news is you can correct any error through the dispute process. The not-so-great news? Consumer law gives credit reporting agencies and credit lenders almost a free pass to miss certain errors until they receive that dispute.
So, you’ll want to file a dispute as efficiently and effectively as possible. Here’s what you need to do:
- Provide objective records such as bank or credit card statements to show that you made the right payments on time.
- Share invoices and other correspondence to confirm the amounts you were billed and any approved changes, if those changes were called into question.
It’s common for approved changes to be questioned after a modification is made on a mortgage loan. You might have been approved for a lower amount, but that wasn’t communicated to the reporting agency. The agency would’ve then marked you as delinquent, even though you’d been paying exactly what you and the bank agreed on for the modified payment.
A consumer law attorney can help you present that information in a dispute letter, asking the credit agency to update its reporting. In turn, the agency would reach out to the furnisher (the bank or institution that provided the data) to research the claim. Very rarely will a credit agency directly and immediately update a credit report.
However, you must file an FCRA claim directly with the credit agency. That law doesn’t address any dispute you might have directly with your bank or other furnisher.
If your claim isn’t investigated…
If you have a viable claim that the credit agency failed to investigate the dispute, you can pursue legal action.
This is important, though: Under FCRA, you cannot file a lawsuit simply because a credit reporting agency made an error in your report. You can only take legal action if you sent a dispute letter and the credit reporting agency didn’t investigate it.
The agency is required to review your version of the facts (the evidence you presented with your dispute letter) and the furnisher’s version. After studying that information, the agency decides which side is correct. If the decision isn’t in your favor, your lawyer can pursue a claim that could generate a larger settlement for you.
Receiving a settlement from the credit reporting agency could take a while, depending on where you live. Thankfully, we operate in jurisdictions with relatively quick courthouses like Virginia, Maryland, D.C. and Hawaii, so our clients can usually expect to settle within a year.
But your primary goal should be to come out with a clean, accurate credit report, not just a large pile of settlement money. Ask your lawyer to get a new copy of your credit file and scan it for any remaining errors.
Let us help you
At Kelly Guzzo, PLC, we’ve helped hundreds of clients correct credit reporting errors and restore their good financial standing.
We can help you submit your initial dispute letter, and we know how to confirm that your claim is officially investigated. And if it isn’t, we’re here to help set things right. Schedule time for a free consultation, where we’ll review any credit reporting errors and outline your next steps. And because we know how valuable your money is to you and your well-being, you only pay if we obtain a settlement on your behalf.