It isn’t uncommon to find errors on your credit report (which negatively affect your score). You can dispute these mistakes, but if the dispute is unsuccessful or ignored, this is a violation of the Fair Credit Reporting Act (FCRA), and you may be entitled to compensation/settlement.
Is It Possible To Sue A Credit Bureau?
Yes, you can sue the credit bureaus which include Experian, Equifax, and Transunion. However, suing the credit bureau is a lengthy and technical process. You must take certain steps to have a viable case against them in court.
What Can You Sue A Credit Bureau For?
It’s important to know what constitutes a lawsuit and what does not before beginning the legal process. Below are some of the common violations that may potentially warrant a lawsuit:
- If the credit bureau refuses to correct information on your credit report after being provided with proof (i.e. a dispute letter and supporting documents), you can sue them for defamation and willful injury. (FCRA Section 623).
- “Re-aging” an account is a violation of the FCRA (Sec. 605) If the bureaus change the date of last activity on your credit report with the intention of keeping negative information on your account longer, you can sue them.
- If the credit bureaus reinsert a removed item from your credit report without alerting you in writing within five business days, you can sue them for violating FCRA Part (A)(5)(B).
- If the credit bureaus fail to reply to your written disputes within 30 days (sometimes 45 depending on the circumstances), you can sue them for violating FCRA Section 611 Part (A)(1).
- If you have submitted a formal dispute, contacted the CRA and the creditor, and after 30 days there is no response and/or correction, you may sue.
How You Can Sue Credit Bureaus?
The process to sue them can be technical and long. It’s important that you understand how to take legal action against a credit bureau for the best results.
Below, find the appropriate steps that should be taken to sue the credit bureaus.
Before You Can Begin Legal Action:
- Get a consumer disclosure. This is a more detailed version of your credit report. Only you will have access to it, lenders will not.
- A dispute must be filed first. If you haven’t done so already, you should file a dispute with the CRAs regarding the error on your report.
- Disputes, once submitted, are allowed 30 days for review and correction by the bureau.
Preparation For the Lawsuit:
- Get a good consumer protection attorney. Consumer protection law is a complicated field of law and you will need representation to help you. Ideally, you will find an attorney who has experience going up against credit bureaus.
- Understand your state and federal laws. You can potentially initiate your lawsuit against the credit bureau at either state or federal court. Lawsuits disputing FCRA violations will be heard in federal court.
- Contact a consumer protection agency.
- Your attorney can help you determine what court you will sue in. The court chosen needs personal jurisdiction to exercise power over the credit bureau.
Initiating the Lawsuit:
- File an official complaint. Your complaint letter serves as the legal document that will explain to the court what the dispute entails and the parties thereto.
- Serve the credit bureau with the complaint. The official complaint needs to be delivered to the credit bureau to provide them with the necessary notice that you are initiating a lawsuit against them.
- The discovery phase will begin once the credit bureau has responded to your lawsuit. This phase involves the sharing of information that may be used in court. You can anticipate requests involving documents related to the dispute and written questions.
Negotiate A Settlement Offer
Most civil litigation suits never reach the trial phase as most are settled before then. It is possible to receive a settlement offer in response to your complaint, as a cost saving approch. Cases that go to trial will incur high costs and consume time that could be focused elsewhere.
You might even be offered enough money in an attempt to get you to drop the case. Your attorney can present you with the settlement offer, but whether you choose to accept is always your choice.
If you do not accept any settlement offers, you will likely go to trial. You should be prepared to testify and answer questions posed by the bureau's legal practitioners. Your attorney should guide you in how to structure your answers before the trial.
If you have taken all actions to resolve an error reported by a credit bureau, but still don’t get answers, you may sue. You may accept a settlement offer or decide to go through with the trial. In any case, when planning to sue a credit bureau, make sure to hire a good consumer protection attorney.