Disputing a Furnisher’s Error in Your Credit Report

Credit reporting agencies (CRAs) like the big three of Experian, Equifax, and Transunion rely on others to Errors on your credit report can damage your credit score and make it harder to obtain a loan or approval from a credit card company. Some errors come from simple mistakes, but more serious problems involve identity theft.

If you don’t achieve the results you expect when disputing errors with furnishers or CRAs, it may be time to contact an experienced consumer law attorney for legal advice.

Credit Reporting Agencies

Credit reporting agencies (CRAs), such as Experian, Equifax, and TransUnion, rely on others to provide accurate information for credit files. These providers of credit information are “furnishers” under the Fair Credit Reporting Act (FCRA) and can include:

• Creditors
• Lenders
• Landlords
• Insurers
• Employers
• Debt collectors

Furnishers Must Provide Credit Reporting Agencies with Accurate Credit Information

Most consumers understand the role of large credit reporting companies in establishing their credit history. However, the role of furnishers is just as important. The FCRA requires furnishers to provide accurate information to the CRAs and correct inaccurate information.

If a consumer files an “indirect dispute” with one of the CRAs, the FCRA requires the furnisher of the disputed information to complete the following steps:

• Conduct an investigation of the disputed information
• Review all relevant information and supporting documentation provided by the consumer
• Report the results back to the CRA within 30 days

Furnishers have similar duties when receiving a direct dispute from a consumer regarding credit report errors. If the investigation shows incorrect information, incomplete information, or is unable to be verified, the furnisher must either:

• Modify the information;
• Delete the information; or
• Permanently block the reporting of that information.

“The bureaus are trying to clean up their act, but they can’t because it’s a garbage-in, garbage-out situation,” says Robert Brennan, a California consumer lawyer. “They accept information from credible furnishers, but they also accept information from not-so-credible furnishers.”

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Can You Sue a Furnisher if They Fail to Meet Legal Requirements?

Yes. When a furnisher does not comply with its requirements under the FCRA, it is liable to the consumer for damages the consumer suffered because of the furnisher’s error.

Furnisher errors could result in a consumer being denied credit or losing out on a job opportunity. The amount of damages a furnisher may be liable for will primarily depend on the egregiousness of the furnisher’s conduct — whether that conduct is negligent or willful.

• Negligent conduct: conduct that falls short of what a “reasonably prudent person” would do if stepping into the shoes of the furnisher;
• Willful conduct: conduct performed with knowledge or reckless disregard of the law.

What Types of Damages Can You Get in a Lawsuit Against a Furnisher?

Whether a furnisher’s conduct was negligent or willful, the furnisher is liable to the consumer for the consumer’s actual damages. Damages can include the following:

• Out-of-pocket expenses
• Lost wages
• Lost credit opportunities
• Emotional distress and humiliation
• Damage to reputation

Some damages are simple to calculate, but emotional distress damages and damages to the consumer’s reputation may be more challenging to assess. These damages can be awarded even in the absence of out-of-pocket expenses.

Emotional distress damages require something more than the victim’s bare allegations. The consumer’s statements must also have additional evidence of actual or genuine injury. That additional evidence can take the form of:

• Testimony regarding the surrounding circumstances
• Testimony of the injured party’s conduct
• Corroboration of other witnesses
• Medical or psychological evidence

There is no limit to the amount of damages if a consumer can prove the loss. Other damages consumers may recover from a furnisher who violates the FCRA include attorney fees and statutory damages of between $100 and $1,000 for willful violations.

Finding an Experienced Consumer Law Attorney

“False credit reporting is going to continue,” says Brennan, “because the furnishers just have too great an incentive to put derogatory information on people’s credit reports because that is right now the biggest leverage they have to make people pay debts.”

First and foremost, consumers must keep an eye on their credit reports and dispute any inaccuracies. Consumers can get a free copy of their credit report every year from annualcreditreport.com.

Consumers should send a formal consumer dispute letter via certified mail to the bureau’s dispute center. The online dispute process offered by the CRAs does not provide the most reliable record of the credit report dispute.

You can also file a complaint with the Consumer Financial Protection Bureau (CFPB). When consumers don’t get the results they feel they should when disputing with furnishers or CRAs, it may be time to contact an experienced consumer law attorney to determine if relief for their credit woes is available through the courts.