Credit Report Errors That Will Ruin Your Credit Score

credit report errors

There are millions of Americans who report having credit report errors on their credit report every year. It is wise to check your credit report periodically to make sure that there are no inaccurate or incomplete information on it.

When you see an error on your credit report, you have the right under the Fair Credit Protection Act (FCRA) to dispute your credit report. The credit report companies then must investigate your claims and fix the errors mentioned in your letter.

If you do spot an error on your credit report, you should immediately take action to get it fixed. Having inaccurate items on credit reports can lead to a drop in credit score and could indicate a sign of identity theft. In either case, it is always a good idea to check your credit report for any signs of errors.

Below are some cases of credit report errors that can potentially lead to a significant enough change to your credit score.

Mixed Credit File

mixed credit file

A mixed credit file case occurs when credit reporting agencies (CRAs) get a consumer’s credit report mixed up with someone else’s report, usually due to their similar credit information. These cases are more common with individuals with common names, such as James Smith, and for family members sharing the same name.

Having your credit report mixed up with someone else’s can pose a huge threat because lenders and employers may turn your applications down because they see irresponsible or criminal records on your credit report. For this reason, it is incredibly important to constantly check your credit report for any incorrect or inaccurate information.

If you do happen to come across such anomaly, there are steps you can take to correct the mistake.

Send A Credit Dispute Letter to Credit Reporting Agency

One way that you can get your credit report corrected is to send a credit dispute letter to your credit reporting agencies. Once the CRAs receive your dispute letter, they will begin to investigate your credit report for the errors listed on your letter. Once the 30-day investigation period is over, the CRA must have either corrected the mistake or conclude your dispute as frivolous.

If you know that there are incorrect information on your credit report but the credit bureaus have not corrected them, you can file a lawsuit against them for violating the FCRA.

File A Lawsuit For Statutory Damages

If the credit reporting agencies have failed to correct the mistakes on your credit report, you can sue them for violating the FCRA. They can be fined $1,000 to $5,000 in statutory damages for each month the credit report errors stay on your credit report unfixed.

Each month the CRA does not correct the issue is another month that your application for a loan or job is more prone for being denied. There may be other opportunities that could be missed due to the errors.

Suing for Non-quantifiable Damages (General Damages)

You may also sue the credit bureaus for causing you non-quantifiable damages, or general damages, by not fixing your credit report errors. These general damages can be emotional distress that you sustained for not getting your credit report errors fixed in a timely manner and can be added on top of the statutory damages.

Suffering from emotional distress can have significant negative impact on your health and should not be taken lightly. If you think you have suffered emotional distress from your credit reporting agencies not remediating the issue, contact a credit report attorney to see how strong your case may be.

Identity Theft

identity theftEach year, there are millions of Americans that have been victims of identity theft. In United States, identity theft is when someone uses or attempts to use another individual’s sensitive personal information to acquire goods and services. These information include the person’s name, address, date of birth, Social Security number, driver’s license number, credit card and bank account numbers, phone numbers, and even biometric data (e.g. fingerprints and iris scans).

When identity theft occurs, you should immediately take action to limit and minimize the damage that can result and to fix the issue. First steps should be to document the crime that occurred. The purpose for documenting the crime is to show to creditors that you are not responsible for any fraudulent new account and to exercise certain legal rights. The following are steps you can take to obtain the documents.

Documenting Identity Theft

1. Report Identity Theft with the FTC

The first step in documenting identity theft is to file a complaint with the FTC. You can visit the FTC website here to report identity theft online.

The FTC does not handle identity theft cases. The purpose of filing the complaint is so that the FTC can enter it into the Consumer Sentinel Network to make it available for enforcement agencies for their investigations. Additionally, it helps the FTC gather trends in identity theft and FCRA violations.

2. File a Police Report

Next step for documenting identity theft is to obtain an Identity Theft Report. The purpose for the Report is to help you:

  • exercise certain rights provided under the FCRA
  • obtain a company’s business records related to its transactions with the identity thief

The Identity Theft Report is a police report that contains specific information for a creditor or CRA to determine the legitimacy of your identity theft claims. You may also choose to report to your local police station in case:

  • You know who committed the identity theft
  • The thief used your name in any interaction with the police
  • A creditor or CRA requires you to provide a police report

Using Documents for Repairing Your Credit Report

1. Sending Credit Dispute Letters to Creditors

You should send a written dispute letter to your creditors with a list of fraudulent charges from the crime. You can include a copy of the police report if your creditor is asking for one. It is recommended to send in the letter by certified mail, with return receipt requested, to keep record that the company received your letter and when.

Once the creditor confirms your claim, they should send you a letter of the verification and that your disputed account is closed and fraudulent debt discharged. Keep the letter in case the errors reappear on your credit report.

2. Fix Your Credit Report

If you are attacked by an identity thief, there’s a good chance that fraudulent activities show up on your credit report. If this is the case, you should act quickly to get them corrected. While checking your most recent credit report, look out for any other inaccuracies such as your SSN, address, name or initials, and etc.

You can fix your credit report by sending a credit dispute letter to the CRAs. Make sure to include all essential items you want fixed and to send it via certified mail for record (learn how to fix your credit report). The credit bureau then has 30 days (upon receiving your dispute letter) to investigate your claims and to correct the errors. If they do not remediate the items within the 30 days, you can file a lawsuit to get the errors fixed. Contact a credit dispute lawyer if you are interested in filing a lawsuit.

Unauthorized Credit Inquiries

unauthorized credit inquiries

Credit inquiries are when potential lenders, employers, and landlords pull your credit report to evaluate how much of a risk you are for them. If you have too many pulls in a short amount of time, however, it can negatively impact your credit score. Because these credit pulls can add up and hurt your credit score, companies and creditors are not allowed to pull a hard inquiry without your authorization (soft pulls are okay and won’t hurt your credit).

There are several illegal credit pulls that are in violation of the FCRA. All illegal credit pulls can have severe consequences. You’ll read about some of the unauthorized credit inquiries below.

Multiple Pulls

When you are applying for a loan or looking to rent an apartment, the lender or landlord will need to pull your credit in order to assess risk of lending it out to you. This is normal, and you’ll see the inquiry on your credit report.

However, it is unlawful for them to pull your credit more than once. Multiple pulls will stay on your report and can reflect negatively on your score. When you obtain your credit report, make sure to check that the person or company has only pulled your credit once (unless you have given permission for multiple pulls).

Consent for Pulling

All hard inquiries require consent. This means that every time a lender wants to check your credit to decide whether or not they want to approve of your application, they must acquire your consent. If the lender pulls a hard inquiry without your permission, it is considered a violation of FCRA. Even if the pull will not affect credit score, businesses must acquire consent (otherwise, it’s an FCRA violation).

Background Check

Some employers might check applicant’s credit report to perform a background check. Before pulling your credit report for a background check, they must receive consent to do so. Some applications have checkboxes that state that you are agreeing to the soft credit inquiry the employer may pull. Checking boxes that state something like this only allows employers for soft inquiries.

This means that the employer cannot use the checkbox to justify any hard inquiries on your credit report in the future. If you believe that an employer has pulled your credit without your permission, talk to a lawyer to see how you can be compensated for it.

Speak To An FCRA Attorney For Legal Advice

When you spot illegal activities with your credit report, it can be tough and confusing to take legal action against the violators, especially against big corporations who have experience in dealing with these kinds of accusations. Trying to resolve your issue alone without the right knowledge can take you a long time and might even hurt you instead.

This is why it is recommended to speak with an FCRA attorney to see what your options are. It is always helpful to hear what experienced attorneys recommendations are.

If you are dealing with companies, landlords, or employers who are violating the FCRA and would like to hear professional legal advice, call our lawyers to see what legal advices they might have for your specific type of situation. Our experienced FCRA lawyers offers free legal advice when you call.

Call us today at (818) 254-8413 for free legal advice.

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