Your credit report plays an essential role in your financial life, influencing your ability to obtain loans, insurance, or even lease an apartment. It’s a sort of financial passport. For this reason, its accuracy can’t be understated.

Mistakes on your credit report – such as an incorrect late payment – are common and can have a severe negative impact on your credit score and on your financial opportunities. Knowing how to correct these mistakes can be critical to restoring your credit opportunities and your finances more generally.

How Common Are Mistakes on Credit Reports?

Errors on credit reports happen with disturbing regularity. A 2024 report from Consumers Union and WorkMoney found that 44 percent of those who successfully checked their credit report reported finding at least one mistake in their credit reports and that 27 percent reported account information errors, such as an account they did not recognize, incorrect reports of late or missed payments and unpaid accounts that the consumer did not recognize.

These errors happen for various reasons – from sloppy bookkeeping by the creditor or its “loan servicer” to serious cases of identity theft. If left unattended, these inaccuracies can cause a damaging issue in your financial plans. So, it’s critical to keep a sharp eye on your credit reports and take prompt action if you notice any mistakes.

Your Rights under the Fair Credit Reporting Act

The Fair Credit Reporting Act (FCRA) of 1970 is a critically important tool when it comes to challenging discrepancies in your credit report. This law requires credit reporting agencies (CRAs) – the big three being Equifax, Experian, and TransUnion – to conduct a reasonable investigation when a consumer notifies them of a problem with his or her credit report. Moreover, the FCRA outlines the roadmap for disputing credit report mistakes, which we’ll dive into below.

How to Remove Incorrect Late Payments

Start by requesting and reviewing your credit reports: The FCRA grants consumers the right to a free copy of your credit report from each of the three major CRAs every twelve months through an official website: AnnualCreditReport.com. During Covid, this was extended to allow free weekly reports. This change (from free annual reports to free weekly reports) now appears to be permanent. Thoroughly examine these reports for any inconsistencies, such as inaccurate late payments.

Take It Up with the Credit Bureau:

Spot an inaccurate late payment? Reach out to the concerned CRA without delay. You’ll need to lodge a dispute, pointing out the mistake and backing it up with relevant documentation. We recommend that you do this IN WRITING and by CERTIFIED MAIL. For more detailed guidance on written disputes with credit reporting agencies, click here: https://consumerprotection.net/how-to-dispute-credit-report-errors/

Dispute It With Your Creditor:

At the same time, get in touch with the creditor who reported the inaccurate late payment. Share the same information with them and ask for a correction. Again, do this IN WRITING and by CERTIFIED MAIL. If you have received a monthly statement, use the billing dispute address that is listed on your monthly statement. For more information on how to dispute directly with a creditor, click here: https://consumerprotection.net/i-found-unauthorized-credit-card-charges-what-can-i-do/

Important Note: The Fair Credit Reporting Act dispute process centers on disputes filed directly with the credit reporting agencies. In order to have a claim that you can pursue in Court, you must file a dispute with the credit reporting agency. Your direct dispute with the credit card company or other creditor can be important under other federal consumer protection statutes but is not a sufficient basis for a claim under the FCRA.

When an Incorrect Late Payment Becomes an FCRA Claim

Not every credit report mistake violates the FCRA. In order for the incorrect information to move from the category of error to FCRA violation, the consumer needs to take proper steps and either the credit reporting agency or the creditor (known as the “furnisher” for FCRA purposes) need to drop the ball. As a rule of thumb, if you’re disputing a late payment error, file your complaint and detailed supporting evidence with each credit reporting agency that recorded the mistake. Disputing directly with the creditor without involving the credit reporting agency can eliminate your right to sue if the creditor mishandles your dispute.

The credit reporting agency must conduct a reasonable investigation of your dispute, and as part of this, must forward your dispute and any supporting materials you have provided to the creditor/furnisher that reported it. The creditor must then verify, correct or request deletion of the disputed information. A credit reporting agency that is confronted with a detailed dispute may not simply “parrot” the furnisher’s verification but instead must conduct a reasonably investigation of information provided by the consumer.

Does Your Claim Qualify for an FCRA Late Payment Dispute?

The FCRA doesn’t guarantee accuracy on your credit report, but one of the things it does guarantee is your right to a reasonable investigation once you dispute an item. Your late payment furnisher dispute may qualify for an FCRA claim if:

• You have provided a reasonably detailed dispute (i.e. that identifies the incorrect information and provides a specific reason that it is inaccurate). A strong dispute will also include supporting documentation. In the case of an incorrectly reported late payment, this should include proof you paid on time, or that the payment history has been inaccurately reported.
• You never receive a response (the 30-day deadline passes without any findings or communication) or the creditor fails to correct the information despite your valid, reasonably detailed dispute.
• You suffer financial harm. You’ve been impacted financially, for example, with higher interest rates or denied credit opportunities, due to unfixed errors on your report that have damaged your credit score by inaccurately describing your payment history.

Remember: The above only applies if the late payment on file is, in fact, erroneous. If the late payment history was accurately recorded, you will not qualify for an FCRA claim.

The Financial Burden of Late Payment Reporting Mistakes

Misreported late payment information can cause significant financial harm. Lenders, landlords, and even employers rely on credit reports to help them assess trustworthiness – meaning damages from credit report errors can cost you thousands. Here are some examples:

• Higher interest rates or loan denials: Mortgage application rejections or approvals with significantly inflated interest rates.
• Lost housing opportunities: Lease application denials or approvals requiring double security deposits.
• Employment setbacks: Rescinded job offers due to credit checks.
• Out-of-pocket financial losses: Extra interest, higher fees, or forced prepayments on loans.

Bring in An Experienced Credit Reporting Attorney to Fix the Credit Report Issue if the Credit Reporting Agency Denies Your Dispute:

If your dispute hits a wall, think about hiring a consumer protection lawyer who focuses on fair credit reporting litigation. They can assess your situation and, if appropriate, help you to bring claims against Experian, TransUnion, or Equifax, as well as the creditor/furnisher that wrongfully verified the incorrect late payment that is impacting your credit file.

The Role of an Attorney in Resolving Credit Report Errors

Having an experienced consumer protection attorney who regularly litigates FCRA claims on board can give a serious boost to your odds of successfully correcting a late payment credit report error and receiving compensation for the harm the creditor and credit reporting agency has caused you. Credit reporting law is a specific, niche area of the law. A lawyer who brings a deep-rooted understanding of the Fair Credit Reporting Act can better navigate the defenses that the creditor and credit agency are likely to raise.

Schlanger Law Group Can Help

If you are dealing with a credit report mistake, such as a falsely stated late payment, and the credit reporting agency refuses to take it off, contact us at Schlanger Law for a private consultation. We are national leaders in credit reporting litigation and advocate regularly on behalf of consumers in New York, New Jersey, and all over the country. Call us now at (212) 500-6114.