How Furnishers Impact Your Credit Report and What to Do if They Get Data Wrong

Use these links to jump to different sections:

• Furnishers Must Provide Credit Reporting Agencies with Accurate Credit Information
• Can You Sue a Furnisher if They Fail to Meet Legal Requirements?
• What Types of Damages Can You Get in a Lawsuit Against a Furnisher?
• Finding an Experienced Consumer Law Attorney

Credit reporting agencies (CRAs) like the big three of Experian, Equifax, and Transunion rely on others to provide accurate information for the credit files they maintain. These providers of credit information are labeled “furnishers” under the Fair Credit Reporting Act (FCRA) and can include:

• Creditors;
• Lenders;
• Landlords;
• Insurers;
• Employers; and
• 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, but 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 provided by the consumer; and
• Report the results back to the CRA within 30 days.

Furnishers have the same duties under a direct dispute from a consumer about 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.

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’s 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 depend first on the egregiousness of the furnisher’s conduct—whether that conduct is found negligent or willful. 

• Negligent conduct: conduct that falls short of what a “reasonably prudent person” would do if stepping in 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, which can include the following:

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

Some damages are simple to calculate, but emotional distress damages and damages to the consumer’s reputation may be more difficult to calculate. These damages can be awarded even in the absence of out-of-pocket expenses. Emotional distress damages must be supported by something more than the victim’s bare allegations. The consumer’s statements must be coupled with 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; and
• 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.

Willful violations of the FCRA open the door for statutory and punitive damage awards. Punitive damages are primarily tools of deterrence and retribution. Punitive damages must be both reasonable and proportionate to the amount of actual damages to the consumer. In determining a punitive damage award, courts consider the degree of reprehensibility of the misconduct and the disparity between the actual damage award and the punitive damages award.

Finding an Experienced Consumer Law Attorney

First and foremost, consumers must keep an eye on their credit reports and dispute errors if there is an inaccuracy. Consumers should send a formal dispute letter via certified mail to the bureau’s dispute center since the online dispute process offered by the CRAs does not provide the most reliable record of the dispute.

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. For more information on this area of law, see our overview of consumer law.