Mixed File & Credit Reports
The credit reporting system in the United States is designed to inform creditors about the creditworthiness of potential borrowers. Businesses making important credit and lending decisions rely on information in credit reports provided by consumer reporting agencies, also known as credit bureaus. Credit reports are designed to provide a history of consumers’ past use of credit, including their track record of making timely payments.Unfortunately, credit reports frequently have errors, causing significant harm to consumers.Given this reality, federal law provides powerful recourse to consumers harmed by credit report errors.
Consumer Reporting Agencies
In the U.S., the three largest consumer reporting agencies are Equifax, Experian, and TransUnion.These credit bureaus compile information about a consumer’s payment history submitted by credit card companies, home and auto lenders, and other creditors. Other information typically included in credit reports includes the total amount owed to various creditors and credit utilization.
Specialty Consumer Reporting Agencies
In addition to the three national consumer reporting agencies, a multitude of specialty consumer reporting agencies provide background screening and information on certain types of transactions made by consumers. Such information includes opening or using bank accounts, bouncing checks, making automobile insurance claims, using payday lending, residential rental payment history, criminal history including arrests and convictions, and utility payments. These specialty consumer reporting agencies may also provide employment and medical record information.
Grave Consequences of Errors in Credit Reports
Given the significant reliance placed on credit reports by businesses and lenders, inaccuracies in your report can have a disastrous impact on your livelihood by preventing you from accessing credit for critical purchases such obtaining a mortgage to purchase a home or financing for an automobile. While errors in credit reports are common, many consumers are not aware that the law empowers them to have the inaccurate information corrected, and in many circumstances, even entitles them to compensation.
An attorney can help you restore accuracy to your credit report and even to obtain compensation.In many cases, consumers will not even be responsible for attorney’s fees as part of a lawsuit
How Credit Reporting Bureaus Arrive at Credit Scores
Credit reporting bureaus use complex algorithms to analyze the information about your payment history and credit profile to generate a credit score. Lenders use that score to decide whether to extend credit and how much to charge, in the form of interest. Individuals with lower credit scores are subject to higher interest rates on their loans. While credit scores are based on payment history and public record information such as judgments or liens, all too often errors in reports can unfairly damage an individual’s creditworthiness.
How to Check Your Credit Report for Free
The law requires the three national credit bureaus to provide a free credit report annually upon request.
By obtaining a free report, a consumer can then dispute any inaccurate information. To obtain your free credit report, visit annualcreditreport.com established by the Fair Credit Reporting Act. You also may consider other sites such as Credit Karma (creditkarma.com) and Credit Sesame (creditsesame.com).
The Federal Trade Commission also provides helpful information on how consumers can dispute the information contained in their credit report.
We can help you to file a proper dispute of any credit report errors. If a legitimate dispute is not resolved in your favor, you may be entitled to sue the bureaus and creditors for both a corrected report and compensation.
The Credit Reporting System Has Widespread Errors
Millions of consumers have substantial errors on their credit reports for the following reasons:
- Errors Caused by the Consumer Reporting Agency — Mixed or merged files can occur when a consumer reporting agency (CRA) or credit bureau combines the information for two consumers. A consumer might notice numerous unfamiliar entries on a credit report. Often, this is the result of individuals with similar or identical names, addresses, or other identifying information, such as a Social Security numbers. Twins and children of multiple births and even “ordinary” siblings — as well as parents and children who share a first and last name and may be distinguished only by a Sr. and/or Jr. — should pay particular attention to the information reporting on their credit reports.
- Originated by Creditor – Sometimes a creditor will misreport information about a consumer. For example, a creditor may report that a consumer missed a payment when the payment was made on-time, or may report an incorrect balance due. The creditor and the reporting agency have a duty to report payment history accurately, but consumers must take steps to dispute these errors to protect their credit reputation.
- Identity Theft – Other times, a creditor will report information about a consumer as a result of identity theft, even though the consumer was not responsible for the reported accounts. Credit report errors present an especially serious issue for a consumer victimized by identity theft.
Credit Report Inaccuracies, at a Glance
A Federal Trade Commission study of the U.S. credit reporting industry found that 5 percent of credit reports had inaccurate negative information that could cause consumers to pay more for credit. One in four consumers found errors that could affect their credit score and one in five had errors that were corrected by a credit reporting agency.
Harmed by Errors in Your Credit Report? The Law Provides Powerful Remedies
The Fair Credit Reporting Act (FCRA) is a federal law that requires consumer reporting agencies to adopt procedures to assure the “maximum possible accuracy” of information they compile in credit reports. The law also requires consumer reporting agencies to “exercise their grave responsibilities with fairness, impartiality and a respect for the consumer’s right to privacy.”
Your Right to “Maximum Possible Accuracy under the Law”
Unfortunately for many in the U.S., the credit reporting system falls far short of the requirement for “maximum possible accuracy.” As a result, many borrowers’ credit reports have inaccurate derogatory information that can lower a credit score. When the credit reporting agencies fail to meet the standard for maximum possible accuracy, or when creditors report false information, the FCRA provides powerful remedies to consumers harmed by the errors. However, consumers must take action to restore accuracy to the report or expect to pay higher rates for loans or even be denied credit altogether.
We Can Help You Correct Credit Report Errors and Obtain Compensation
If the information is not corrected after a dispute, a consumer may be entitled to sue for compensation and a revised credit report. Monetary damages may include:
If the report is not corrected after a dispute, consumers can sue for a corrected report, as well as for compensation, including damages for financial harm and emotional suffering.
The law also gives consumers who are victimized by intentional wrongdoing an especially powerful remedy: punitive damages. An award of punitive damages by a jury may substantially increase the monetary award.
If you’ve been harmed by credit report errors, the law empowers you to not only recover damages, but also to be awarded reasonable attorney fees.
How to Retain This Firm to Represent You Without PayingAttorney’s Fees
In addition to actual damages and punitive damages, a court must award reasonable attorney’s fees to consumers harmed by credit report errors. Therefore, in the typical credit report error case, a client of this firm pays no attorney’s fees for litigation in court. This firm is paid only if the consumer’s case is won or settled.
Delaying May Cause You to Forfeit Your Rights: Contact Us Today for a Free Evaluation by Phone
By not disputing errors in a credit report and failing to take legal action, consumers may lose their right to bring their case including because of the FCRA’s statute of limitations, obtain monetary damages, or restore their credit reputation. If you have otherwise good credit except for errors on your credit report, or if you suspect you are the victim of identity theft, contact the Law Office of Adam G. Singer for a free telephone evaluation.
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