Given the heavy emphasis that businesses and lenders place on credit reports, mistakes in your report could have a devastating effect on your financial health. Credit Report errors can prevent you from receiving credit for essential purchases like a mortgage to buy a home or financing for a car. Despite the fact that mistakes on credit reports are rather common, many customers are unaware of their legal rights to have the errors fixed and, in certain cases, get compensation for the harm that the reporting errors caused.
The credit reporting system falls short of the maximum possible accuracy. As a result, credit report errors are rather common. Many consumers face inaccurate and false data on their reports which lower their credit scores and subsequently harm their creditworthiness. To prevent such consequences, the FCRA set a standard under §1681e(b) for the credit bureaus to have rigorous procedures and policies in place to make sure the information is as accurate as possible. This is to prevent disputes by consumers and investigation requests by the consumer.
When the credit bureaus fail to follow reasonable procedures to assure maximum accuracy or when creditors report false information, the FCRA offers powerful redress to consumers harmed by such errors. Consumers must, however, take action to correct the report if they want to avoid paying higher interest rates or possibly being turned down for credit altogether.
If you have disputed the error and the credit bureau has failed to correct it, you have a right to sue for compensation and an updated credit report. Monetary damages that consumers might seek include:
Compensation: If, because of inaccurate information in your credit report, you suffered serious financial harm and emotional distress, you are entitled to compensation.
Punitive damages: The law also provides punitive damages, which is an extremely potent remedy, to consumers who are the victims of willful wrongdoing. The monetary award could be significantly raised by a jury's decision to award punitive damages.
Attorney’s Fees: In addition to damages, the law makes you entitled to be awarded attorney’s fees.
§1681e(b) applies to all the consumer reporting agencies, including the main three credit bureaus – Experian, TransUnion, and Equifax, and all other consumer reporting agencies that are used for the purpose of a background screening, tenant screening, or employment information, etc.
