How To Sue Creditors For False Credit Reporting?

Last Updated: Dec 06, 2022

Creditors can report incorrect information, whether intentionally or negligently.

You may potentially sue the creditor for false information reported.

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Credit reporting is guided by the Fair Credit Reporting Act (FCRA) and regulated by the Federal Trade Commission (FTC).  The FTC requires that all companies reporting to credit bureaus must provide accurate information for consumer credit reports.

Failure to adhere, allows consumers the option of legal action as per the FCRA, if any damages were incurred.

The process to take legal action against a party that provided incorrect information does not need to involve the appointment of a lawyer. Nevertheless, a lawyer can assist with guidance in taking the correct steps and increase the chances of being successful and potentially receive a settlement.

How To Take Legal Action Against Creditors For False Credit Reporting?

The following steps are recommended to ensure that the correct process is followed when suing for false reporting:

Step 1 – Review Your Credit Report

Request a copy of the credit report from each of the three major credit bureaus, namely, Equifax, Experian, and TransUnion.  Once received, work through the report to identify any inaccurate information.  

  • incorrect amounts,
  • false reporting of late payment,
  • incorrect entries about delinquencies and
  • debt never incurred by you.

A dispute must be lodged against the relevant credit bureaus for any incorrect details. If credit bureaus cannot resolve the dispute, the individual must be prepared to contact the creditors responsible for reporting the inaccurate information.  

Step 2 – Copies, Copies, Copies!

It is necessary to make duplicate copies of all official documents related to an inaccurate entry on a credit report. Always retain original documents to justify your inaccurate information disputes against a creditor.

Step 3 – Review The FCRA

Conduct a review of the FCRA for potential violations committed by creditors.  An individual will be eligible to receive a settlement of up to $1,000 from creditors per violation in terms of the FCRA.

Credit bureaus will not be held liable for reporting incorrect information provided by creditors. The creditors will be directly liable for damages caused by any inaccurate information they report.

Step 4 – Consider A Lawyer

Individuals are urged to contact a debt lawyer for assistance in lawsuits. Lawyers are obligated to act in an individual’s best interest and to the best of their abilities when appointed.

Debt lawyers have the expertise to assist individuals in gathering documentation to support their case. Lawyers will also draft the initial letter to the relevant creditors, informing them of the individual’s complaints regarding inaccurate information on a credit report.

Step 5 – Contacting Creditors

The next step is to contact responsible creditors regarding the inaccurate information and request that they amend inaccuracies within 30 days. It is important to inform creditors of your intent to file a lawsuit for damages should they fail to assist with the requested amendments.

Step 6 – File The Suit!

Commence with filing a lawsuit in the relevant State, against the violating creditor in terms of the FCRA. Ensure you bring all relevant documents compiled in step 2.

If the judge finds favorably in the case, you’d be eligible for damages and the debt will be wiped from the credit report.

The Bottom Line

Creditors have the duty to comply with the regulations stipulated in the FCRA and to the State laws with jurisdiction. Individuals have the right to act against creditors that have infringed their rights. Actions to take include the initiation of a civil lawsuit against the creditor or filing a formal complaint with the relevant statutory body.

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If you’re a victim of credit reporting/background check errors, or debt collection harassment, it’s time to take a stand. Contact us today & reclaim your financial future.