The Fair Credit Reporting Act (FCRA) requires that when a consumer disputes a “trade line” or debt entry on their credit report, the credit bureau must forward that dispute to the creditor reporting the inaccurate or incomplete information. The credit bureau must give the creditor all relevant information related to the dispute. The creditor must then review the information and conduct an investigation into whether the report is accurate. If the creditor decides the disputed information is inaccurate it must correct the description of the account.
Creditors must also (1) maintain a system capable of receiving information about disputes, (2) conduct investigations using all information forwarded to them by the credit bureaus and their own information, (3) report the results of the investigation back to the credit bureau, (4) provide corrected information to all of the credit bureaus, and (5) modify, delete or permanently block incomplete or inaccurate information that a creditor might have provided to the credit bureaus.
The FCRA also prohibits credit bureaus from reporting accounts that have been placed for collection or charged off for more than seven years. The creditor (known as a “furnisher” under the FCRA) must tell the credit bureau the date of the first delinquency because the seven years begins to run 180 days following that date. After the seven years expires, the debt’s trade line is supposed to age off the credit report. Creditors sometimes improperly “re-age” the negative trade line so that the seven year clock starts again.
Besides “re-aging” accounts, creditors may violate the FCRA if they fail to report that a consumer has disputed information in a trade line. Without notice of a dispute, the credit report is inaccurate and incomplete. Other credit report mistakes include (a) reporting the entire balance of a mortgage as unpaid even though the loan was partially repaid after a sheriff’s sale, (b) reporting a mortgage as delinquent even though the consumer may be current on a new modified loan, and (c) incorrectly reporting a mortgage loan modification under the federal government’s Home Affordable Modification Program (HAMP).
Consumers can obtain actual (and sometimes punitive) damages, costs and attorney’s fees in lawsuits proving violations of the FCRA. If your credit report contains errors contact us to discuss your options for enforcing the FCRA. We take these cases on a contingency fee basis where we only get paid if the lawsuit is successful.