Credit Report Errors

Most people know that maintaining their credit score in good standing is crucial to their financial health.  After all,  their credit score can have a significant impact on many aspects of their life. Credit scores can affect a person’s ability to buy a home, car, insurance, and may even affect their ability to obtain employment. However, what most people do not know is that credit reporting agencies (CRAs) and credit furnishers often make a multitude of mistakes when recording a credit score and credit report. These mistakes often remain uncorrected despite the CRAs being informed of the error.

Realizing that credit scores can have a broad impact on a person’s life, Congress enacted the Fair Credit Reporting Act (FCRA) in 1970. The purpose of the Act  was to protect consumers from the poor reporting practices of the credit reporting agencies and credit furnishers.

Credit reporting inaccuracies were one of the many problems that the FCRA endeavored to regulate. To achieve this goal, the FCRA requires credit reporting agencies (CRA’s) to follow “reasonable procedures” to ensure the “maximum possible accuracy” of credit reports.  Those CRAs also must communicate those disputes to creditors and other furnishers of information who, in turn, have an independent duty to investigate disputes and modify or delete any information that cannot be verified as accurate.

Despite these requirements, CRAs, credit furnishers, and banks continue to make errors on consumer credit reports. According to a survey by Zogby Interactive, 37% of consumers found at least one error on a credit report they requested. In addition, 50% of those people were not able to easily correct that error. Moreover, studies from the Consumers Union and the U.S. PIRG have uncovered that 25% of the errors found on credit reports were so significant that they would likely cause a denial of credit.

Common Reporting Errors

In addition to the shocking percentage of errors that are made on consumer credit reports, what is even more striking is the kind of mistakes that are made on credit reports. The most common types of errors on credit reports include mixed files, identity theft, errors by credit furnishers, and the “re-aging of old debt”.

According to a report by the U.S. Public Interest Research Group, 44% of the complaints to the FTC about credit reporting involved mixed files. And, of these complaints, 64% had total strangers’ files mixed in. This occurs because the credit bureaus’ computer systems do not effectively scrutinize the data they receive, nor do they employ rigorous criteria to match consumer data. The end result is mass confusion of mixed files. Ultimately, this means that consumers are potentially harassed by collection agencies and lawsuits for debts for which they are not responsible.   

Speaking of debt that consumers are not responsible for, CRAs and credit furnishers also contribute to harm resulting from identity theft crimes. To be clear, CRAs and credit furnishers are not responsible for engaging in identity theft, but rather, the identity and personal information matching methodology that CRAs and credit furnishers employ contribute to the problem of identity theft. For example, if a thief were to obtain your Social Security number and adopt your first name, the debt associated with whatever accounts or credit cards that the thief may open will automatically be associated with your profile because of the matching algorithms used by CRAs and credit furnishers. The software algorithms employed by CRAs and the like are simply not specific enough in their screening criteria to identify new accounts with some information (such as first name and Social Security number) belonging to the real person, and other information (such as last name and address) which do not legitimately belong to the identity theft victim. These are obvious signs of identity theft that would raise red flags if the CRAs and credit furnishers would simply implement more effective methods of screening consumer information and verifying that that the information is correct, non-fraudulent, and does in fact belong to the correct consumer. Therefore, rather than helping to stop the problem of a stolen identity as soon as possible, CRAs and credit furnishers merely help the identity thief continue to benefit from someone else’s good name.

Beyond identity theft errors and mixed files, credit furnishers are also responsible for making numerous errors of their own. The most common furnisher errors include reporting an incomplete or incorrect payment history, a consumer’s current payment status, or even a consumer’s current outstanding balance. The causes of such errors may be as simple as a data entry mistake, or as complicated as a flawed accounting database. In addition, credit furnishers may also attribute the debt to someone who is not responsible for the debt, such as in the identity theft errors above. According to credit reporting statistics, such ownership of debt errors are the most common, occurring roughly 30% of the time there is an issue with a consumer’s account. Furthermore, these errors are only propagated when this incorrect information is sent to the CRAs, which blindly accept whatever information the credit furnishers send them.       

Your Rights to a Dispute if an Error is Present

Please note that under federal law you are entitled to your free credit report from all three CRAs – Experian, Equifax, and TransUnion. As such, you should request your credit report every year and make sure that all the information on the report belongs to you and that the information is accurate.  As a variation, consider requesting a report from one of the three bureaus on a rolling basis every four months.  That will give more frequent insights into your credit report status, albeit an approximation because not all three bureaus report the same information or report identical information in the same fashion.

If there is an error present, you are entitled to a dispute with the CRAs and credit furnishers in order to have them correct any errors that may be present. In order to begin the dispute process, you must first collect all relevant information that supports your position that the information on the credit report is inaccurate. This means, for example, if there is an error on your credit report which suggests that you are delinquent on a credit card payment, be sure to collect all of your invoices and checks made payable to the credit card company in question. Make copies of all of these relevant documents and send the copies to the CRAs and credit furnishers along with a dispute letter outlining the nature of the error. You should receive a letter from the CRAs stating that they are in the process of conducting an investigation into your matter and will notify you of the results within thirty days as required by the bureaus.

The Low Standard of Investigations into Credit Report Errors

One would think that CRAs and credit furnishers take credit report errors seriously, since after all, a person’s identity, credit report, and in some cases, one’s prosperity hang in the balance. However, the reality of how these CRAs and credit furnishers conduct their investigations is quite worrisome.

After a CRA or credit furnisher receives a dispute letter from a consumer, the CRA or furnisher will input your dispute into their automated dispute process. Herein lies the first problem. Your dispute, which is likely to contain very complicated, detailed, and significant information, will be converted into a simple two or three digit code. Take a moment to consider the implications of such a process and methodology. Such a simple coding process cannot convey the level of stress and worry of the disputing consumer, nor can it accurately illustrate the severity of the situation. Nevertheless, this is how dispute investigations are handled on a daily basis by CRAs and credit furnishers.

Moreover, as if the use of a simple code to identify your dispute wasn’t bad enough, what’s even more upsetting is that the CRAs may not provide to the furnishers any of the documentation that the consumer may have sent to the CRA to prove their case. Therefore, even though the credit furnisher will be made aware that there is an ongoing dispute, they have no way of knowing whether or not the dispute has any merit because all of the supporting documentation was never sent to them. As such, the credit furnishers can only determine whether or not the information the CRAs have in their systems matches their own version of the consumer’s information.  If it’s a match, the “investigation” will usually end there and the consumer will be notified by mail of the result.

It is true that the Fair Credit Reporting Act requires CRAs to conduct their own independent investigation and to modify or delete any information that cannot be verified as accurate.  Often and contrary to federal law, CRAs simply will “parrot” the results of the furnisher rather than permitting the CRA investigation to yield a deletion of the error if the furnisher has verified its accuracy. 

When the dispute process has failed, a consumer attorney may be able to help.  The Credit Report Law Group focuses on representing consumers with credit report errors.  In most cases, the consumer is not responsible for attorney’s fees.  In litigation, consumers may be entitled to sue for both a corrected report and compensation for any financial and emotional harm suffered.  In addition, a consumer can recover punitive damages — at times substantially larger than their compensatory award — to recover for willful violations of the FCRA.  More information is available at 


Credit reports are vitally important to securing loans, credit cards, and even home mortgages. Unfortunately, as discussed above, credit reports can be plagued with errors that can make securing loans and the like very difficult. Sometimes the errors are the credit furnisher’s fault, and other times it is the fault of the CRAs. Regardless of the origin, however, the kind of errors present on credit reports can be truly appalling, and the CRAs and furnishers often conduct perfunctory investigations only to verify that the information is accurate. This is why diligence during the dispute process is so important. Consumers must keep pleading their case with the CRAs and/or furnishers until the issue is resolved. If, after several dispute letters and so called investigations have occurred and the error remains on the credit report, consumers are strongly advised to secure legal counsel.

If all else fails, hiring an attorney to represent you may be the best option. CRAs and credit furnishers are more likely to fix errors either as part of a comprehensive dispute and/or litigation. However, if you’re fortunate enough to have an error-free credit report, the best thing you can do in addition to staying on top of your monthly payments is to keep a close watch over your credit report every year and destroy any non-essential documents containing sensitive personal identifying information. Being diligent and proactive will help you avoid credit report errors, and at the very least, help you spot errors early so that you can begin the process of correcting them.