A few months ago, you received your free credit score report. On it, you noticed mistakes: someone with the same name had accounts in collections, but somehow they were added to your report. The wrong Social Security number was even added to your report. No problem, you thought, as you can fix most of these mistakes simply by contacting the three major credit bureaus. And then you heard nothing, despite credit agencies being required to fix mistakes within 30 days. What recourse do you have? Can you actually sue the credit bureaus?
First Steps: Filing Disputes
The short answer is yes, you can sue credit reporting agencies — TransUnion, Equifax, and Experian. The long answer is that bringing a lawsuit against the credit bureaus is not an easy process, and you have to follow certain steps before you can sue.
First, you want to get a consumer disclosure. This is a more comprehensive version of your credit report. Only you may request it; it will not be seen by lenders. It lists all inquiries, including promotional, and information that may be suppressed and does not appear on your credit report at the request of creditors.
Before suing, you should contact the lender (called a “furnisher” under the Fair Credit Reporting Act). Ask them to verify the information with the CRAs. You can dispute with the furnisher as much as you want, but at this point, you cannot sue.
Next, contact the CRAs, and ask them to verify the information with the lenders. This covers both bases, and the CRAs cannot update your credit report without verification from the furnisher. The key is to file a dispute with the CRA if they do not correct your report. Without a dispute with the CRA, you will not be able to sue them.
You may want help from a credit repair agency to start the dispute process. If the furnisher responds that the information is correct, send a copy of the letter to the CRA.
If the furnisher can’t or won’t assist you, or the CRAs are still unresponsive, it’s time to escalate.
File a Complaint Against the Credit Bureau or Creditor
At this point, legal self-help site Nolo recommends contacting the Federal Trade Commission (FTC) and filing a complaint against the CRA. You can file a complaint here.
The FTC can also help you filed a complaint against the furnisher provided incorrect information and failed to correct it or inform the CRAs the information was incorrect. You can also file a complaint against the furnisher directly with the Consumer Financial Protection Bureau here.
As a side note, the CFPB is the government body in charge of levying fines against the CRAs due to false reporting or marketing. For example, the CFPB fined both TransUnion and Equifax in January 2017 when the CRAs “misstated the cost and usefulness of credit scores and products they sold [and] lured consumers into costly recurring payments.” Later, in March, the CFPB fined Experian $3 million for misstating how credit scores it sold were used.
Suing for Credit Damage
If you have contacted the CRA and the creditor, and after 30 days there is no correction, you may be able to sue.
For willful violation, you can sue for:
- Actual, provable damages with no limit against a CRA, or
- Statutory damages between $100 and $1,000 without proving the violation harmed you.
- Actual, provable damages if the violator was an individual, or
- $1,000 flat.
- Punitive damages, defined by the court
- Attorney fees and court costs
The furnisher or CRA may simply change the mistake. Or, they may not bother sending a lawyer to court, if it’s not worth their time to settle for a relatively small amount of money to them. However, if the case does go to court, you could have a small windfall, of a few hundred or even a thousand dollars. Or, if the court decides to teach the furnisher or CRA a lesson, you could be set for life.
Julie Miller sent 13 letters to Equifax over two years, and yet they did nothing, according to a New York Times report. She sued when they would not remove 38 collections accounts against a different Julie Miller, which showed up on her credit report — along with the other Julie Miller’s Social Security Number. The original Julie was denied a line of credit due to the other Julie’s collections. She tried sending W-2 forms, her driver’s license, pay stubs and phone bills, but nothing changed.
This type of case, called a mixed-file case, can result in judgments of $50,000 to $250,000, while other, lesser mistakes can result in much less. Julie Miller, however, received $18.4 million in punitive damages in order to teach Equifax a lesson. However, with outsourcing, automation, and receiving some 10,000 disputes every day, it’s not likely a lesson Equifax will remember. They simply have too large of a volume of disputes for a human to go over the disputes with a fine-toothed comb, unless the court system is brought in.
Need more information on your credit score, and how to fix mistakes? visit our credit score resource center for more guides and articles. For more information on disputing a mistake, visit our dispute letter template resource center.
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