If you have ever applied for a credit card, automobile loan, or other forms of credit, you have a credit report. If you find incorrect information in your report, you can dispute that information. Then, once your dispute is investigated, your credit report should be corrected. However, if your credit report dispute is denied, you may need to work with a credit report attorney to protect your rights.
Credit Report Basics
Your credit report is an important document that can be requested by businesses in various situations if your creditworthiness or ability to pay is in question. For example:
- A credit card company can request your credit report to decide whether to issue a new card and what interest rate you will pay
- A prospective landlord may review your credit report before deciding whether to rent to you, and
- A mortgage company will review your credit report before extending a home loan to decide how much to loan, the length of the loan, and the interest rate to charge.
Inaccurate information and credit report errors can create serious problems for you through no fault of your own. You could lose a job offer or rental opportunity, pay more interest than you should on a credit card or bank loan, or you might be rejected outright for a mortgage or car loan.
Credit Report Procedures That Must Be Followed
Credit reporting agencies (CRAs) such as Experian, TransUnion, and Equifax have a legal obligation to establish and follow policies and procedures for gathering and reporting consumer information. These procedures are meant to create more accurate reports. When mistakes do occur, the CRA’s must conduct a reasonable investigation.
The CRAs receive credit information from sources called information “furnishers” under federal law. Furnishers must provide accurate information to the CRAs and when a dispute occurs, they must verify the accuracy of the disputed information.
What Causes Credit Report Errors?
Unfortunately, credit reporting mistakes are disturbingly common for a variety of reasons. According to a study by Consumer Reports, 34% of people who reviewed their credit report found at least one error. In that group, 41% found an account they didn’t recognize and 26% found a debt they didn’t incur.
Some of these mistakes are completely inadvertent. Some are the result of sloppy data management. Other problems are related to identity theft that can result in unfamiliar accounts and debts.
Also, unethical creditors may skirt the law to put pressure on consumers to pay debts that are not legally collectible. This is one of the reasons the Fair Credit Reporting Act was created.
Fair Credit Reporting Act Basics
Congress enacted the Fair Credit Reporting Act (FCRA) to ensure the consumer information in credit reports is as accurate as possible and to create clear rules for how CRAs and creditors that furnish debt information must act when a consumer notifies them about credit report errors.
According to the FCRA, you have the right to dispute false or inaccurate information in your credit reports. To begin, you should file a dispute in writing with the CRA. In turn, that CRA must then notify the creditor that supplied the incorrect information. While it is usually a good idea to also report your dispute directly to the creditor, the key is to notify the CRA. When the credit reporting agency receives your dispute, FCRA consumer protection is triggered.
When the CRA receives your dispute, both the CRA and creditor must investigate and correct false information promptly. Unfortunately, some CRAs and information furnishers do not follow the law and improperly deny legitimate consumer disputes without conducting a reasonable investigation. You may need an FCRA lawyer to help enforce your rights and remove inaccuracies from your reports.
Why Was Your Credit Report Dispute Denied?
There are several reasons your dispute could be denied. First, if the disputed information is true and verifiable, you have no grounds to dispute it, and the information will remain in your credit report. However, even if the disputed information is false, the CRA or credit furnisher may still deny your dispute in violation of the FCRA.
Obligation to Reasonably Investigate
One of the most common FCRA violations is the failure to “reasonably investigate” a consumer dispute. A “reasonable investigation” according to the FCRA is highly case-specific, but one critical factor is how much meaningful detail and documentation you provide in support of your dispute. If you provide little supporting information, the CRA and furnisher will typically do a minimal investigation.
For example, there is a big difference between telling a CRA that the “balance is incorrect” and explaining that you are the victim of identity theft, and providing a police report, identity theft affidavit, or other supporting documents. Similarly, if the balance is incorrect because it was previously paid in full, you should provide proof of payment to strengthen your position. A reasonable investigation must consider the details and documentation provided by the consumer.
But even when your dispute is specific and well documented, it may still be rejected. Why? Some CRAs prioritize processing disputes as quickly as possible rather than closely examining the documents you submitted. Often CRAs send consumer disputes to overseas facilities run by third-party vendors that don’t follow FCRA requirements.
Another frequent situation occurs when the credit furnisher says the disputed information is true and the CRA simply accepts the creditor’s verification without further investigation. This practice (known as “parroting” because the CRA simply repeats whatever the creditor says) has been repeatedly flagged by courts as insufficient yet it continues to happen.
If you reach an impasse with the CRA or the credit information furnisher, you should consult with an experienced credit report attorney who is familiar with FCRA litigation.
If Your Dispute is Denied, a Credit Report Attorney May Help
Often consumers get frustrated and just give up when they can’t correct their credit report on their own. Some CRAs and credit information furnishers count on this reaction when they ignore FCRA rules. If your dispute was denied unjustly, don’t give up. You have rights that an experienced consumer protection lawyer may be able to protect.
For example, if the CRA or information furnisher violates the Fair Credit Reporting Act, your FCRA lawyer may help you recover:
- actual damages—which can include out-of-pocket expenses, damage to your credit, and emotional distress,
- statutory damages—ranging from $100 to $1,000 if the FCRA violations were willful, and
- punitive damages depending on the circumstances.
The FCRA also created a financially viable way for consumers to challenge inaccurate credit reporting. If the CRA or creditor has violated the FCRA, they are responsible for paying your attorney’s fees and costs. This “fee shifting” provision allows consumers to hire skilled and experienced FCRA counsel on a contingent basis.
Trust a Credit Report Attorney at Schlanger Law Group When Your Dispute is Denied
When you have followed the procedure to dispute an error in your credit report, but the credit reporting agency or creditor has denied your dispute, a credit report attorney at Schlanger Law Group can help you understand your rights, assess your claim, and help you map out your next steps, including litigation, if necessary. Be advised, most FCRA cases must be filed within two years of the violation, but the rules are complicated, so you don’t want to miss your window of opportunity.
We are passionate about protecting consumers from overreaching creditors and agencies that don’t follow the law. Call (212) 500-6114 or complete this online form to schedule a free, no-obligation case consultation with a member of our team today.