Your credit report contains a wealth of information about your financial history, and it plays an important role in determining your creditworthiness. Unfortunately, negative information can find its way onto your credit report, impacting your credit score and potentially hindering your ability to secure loans or credit cards in the future.
Although there is almost no such thing as someone who has perfect credit, it is far too common for people to have numerous negative entries on their credit reports. Even one negative entry can have a crippling effect on your credit score because it can remain on your record for an extended period. In fact, negative information remains on your credit report for seven years, where creditors can see that you missed a payment or were extremely late paying a bill. Therefore, you must stay on top of your credit report and not hesitate to challenge information you disagree with.
If credit bureaus or creditors have broken the law, they can be held accountable in a Fair Credit Reporting Act (FCRA) lawsuit. You can recover actual and statutory damages and even receive money if the violation harmed you. You must hire a FCRA lawyer now to take legal action if necessary. Attorneys with experience in credit reporting and consumer protection laws have the knowledge to understand the legal landscape surrounding credit reporting. They can guide you through the process of disputing inaccurate information, dealing with credit reporting agencies, and negotiating with creditors. You do not have to pay anything out of your own pocket to get help from a consumer protection lawyer.
Your Credit Report Controls Whether You Can Borrow Money in the Future
For better or worse, you are what your credit report says you are when borrowing money. Creditors take a risk when they choose to lend money to you, and if you fail to repay your debt, they will have to write it off on their balance sheet under accounting rules. They will have to seek your debt for pennies on the dollar to a debt collector so that they can get something for it. Thus, a lender will do the work ahead of time to make sure that you are creditworthy before they advance you money,
Your credit report is the only yardstick a creditor must review before deciding on your creditworthiness. Your credit report is your story as a borrower and participant in credit markets, and it will share how much money you borrowed and whether you have a sound track record of repaying your debt. The report will also detail other adverse financial events, such as a tax lien or bankruptcy. Your credit report presents an overall picture of you, and a lender will closely review the circumstances of your prior repayments to gauge the risk of doing business with you.
You May Struggle to Borrow Money with Poor Credit
You can find yourself locked out of the credit markets if negative information is on your credit report. You may find it impossible to get a mortgage or car loan, or you may have to pay much higher interest rates to reflect the risk of lending money to you. Poor credit can even make renting an apartment impossible because the landlord pulls your credit report first when you apply for housing.
Sometimes, you may run into difficult financial circumstances, and it is no fault of your own. You may struggle with repaying medical debt when you cannot afford your care. There are other times when you get into financial trouble through your own decisions. Either way, the effect is the same.
Negative Information Will Impact Your Credit Report for Seven Years
Negative information will remain on your credit report for seven years. For example, if you missed a payment on your bill, and the creditor enlisted a debt collector, this information will appear on your credit report and stay there for seven years. The exact period applies to other adverse credit events, such as bankruptcy and tax liens.
The effect of a failure to repay will be the greatest at the outset. Your credit score may take a significant hit upfront when someone reports the adverse credit event to the credit bureau. Your score can drop by 30 or more points for one missed payment. It will gradually recover, assuming you have no further missed payments. However, the fact that the missed payment occurred will stay on your credit report, even if the effect on your actual score has diminished over time.
You Can and Should Challenge Wrong Information on Your Credit Report
Therefore, you have an incentive to make sure that your credit report is as accurate as possible. The information on your credit report can be inaccurate, and if you do not dispute wrongful information, it will be the same as anything on your credit report. Future creditors will have no way of knowing that this information was incorrect, and they may use it to deny you credit or give you less advantageous terms for a loan.
If you do not take advantage of your right to dispute information, it can remain on your report for an extended time. If you do nothing, the creditor will be the only one speaking, which can impact your financial future. A consumer protection attorney can gather the necessary documentation and evidence to support your dispute, draft effective dispute letters, and represent you in court if necessary.
You Should Routinely Monitor Your Credit to Learn About Negative Information
It is best to stay on top of your credit report to learn whether there is negative information. You may only know something is wrong with your credit once you apply for a loan and the creditor rejects you. If you regularly review your credit report, you can challenge negative information as soon as it appears. Then, you can let the dispute process play out before borrowing money.
Consider a credit monitoring service that can alert you when something changes on your credit report. You will receive a real-time alert informing you of a new entry on your report. Then, you can decide whether this information is wrong on your report and if you should proceed with a dispute. You may already have access to credit monitoring because you were a data breach victim, and the party supposed to safeguard your information had to pay for credit monitoring as part of their settlement with you.
At the same time, you should be cautious of credit repair services that try to get you to pay them to do something you can easily do on your own. These companies sell you expensive packages, and they try to illegally lock you into a contract when they are not performing any valuable services that you cannot do yourself. You can easily file a dispute when wrongful information is on your credit report. Instead of paying a credit repair service, you may consider hiring a consumer protection attorney to dispute negative information on your credit report. This way, you can have one person who can speak on your behalf and advise you of any right to file a lawsuit when the credit bureau or information furnisher breaks the law.
The FCRA Allows You to Challenge the Information
You have legal rights if you disagree with information that a creditor placed on your report. A federal law called the Fair Credit Reporting Act allows you an avenue of appeal when you disagree with what is on your report. Your credit file is about you, but you are by no means a bystander who has no say whatsoever in the process.
You can file a dispute with any of the three major credit bureaus. These bureaus are as follows:
- TransUnion
- Experian
- Equifax
The Credit Bureau Must Investigate Reasonable Disputes of Negative Information
The credit bureau will have the obligation to investigate any of your disputes unless they determine that the dispute is frivolous. Usually, credit bureaus will want to look into most disputes to protect themselves from liability. They will need to conduct a reasonable investigation into your dispute because they should not accept what an information furnisher says without looking into it. Otherwise, they may be liable to you in a lawsuit. The law recognizes the tremendous power that credit bureaus have over your financial future, and it wants them to use this power responsibly.
The credit report will inform you of the credit bureau's investigation results once it is over. If one credit bureau determines the information furnished was incorrect, it will remove the error from your report. The other two credit bureaus will follow suit and take the information off your report.
If you disagree with the decision, you can consider filing a lawsuit, and you may also make a note on your credit report stating your side of the story for the disputed entry. The hope is that future creditors may consider your side of the story, but most will believe what is on your credit report. Therefore, you need to challenge it when you disagree with information.
The FCRA Makes Many Behaviors Illegal That Violate Your Rights
Federal law allows you to hold a credit bureau or an information furnisher responsible when there is incorrect information on your report, which they do not remove. The Fair Credit Reporting Act makes the following illegal:
- Reporting inaccurate information to one of the credit bureaus (allowing you to sue a creditor or debt collector)
- Reporting information that is old or beyond any statute of limitations
- Withholding notice to a customer when a creditor uses your credit score as a basis for denying you credit
- Credit bureaus failing to undertake a reasonable investigation when you have disputed information on your credit report
- Using information in your credit file against you without telling you about it
- Denying you access to your credit file after a request
- Denying you the right to dispute any inaccurate information on your credit report
The FCRA allows you to seek damages from those who violate your rights, and you have the right to take the law into your own hands to file a lawsuit against anyone who breaks the law. You do not have to wait for the government to take enforcement action.
Your Damages in a Successful FCRA Lawsuit
You may have the legal right to damages under the FCRA if someone else breaks the law. You may not even have to show that you suffered personal harm because there are statutory damages for violating the law. If you file and win an FCRA lawsuit, you have the legal right to the following in damages:
- Up to $1,000 for a violation of the law, regardless of whether you suffered any actual damages because of what happened
- The actual damages you have suffered, whether emotional distress damages or financial losses because a creditor denied you credit from incorrect information on your report
- Reasonable attorney's fees and court costs
- Punitive damages if you can show that someone willfully violated the FCRA
Questions About Your Credit Report? Contact An Experienced Consumer Debt Attorney
Again, you will not have to pay your FCRA lawyer, and if you win your lawsuit by receiving a settlement or jury award, the defendant will have to pay your reasonable attorney's fees. If you do not win your case, your consumer protection lawyer will not receive anything from you. Therefore, you are taking no risk when seeking legal help. However, you have a tremendous risk when you let a creditor or credit bureau get away with playing fast and loose with your legal rights.
When it comes to inaccurate information on your credit report, time is of the essence. The longer you wait to address the issue, the more damage it can cause to your creditworthiness. By hiring an experienced consumer protection attorney, you can increase your chances of achieving a favorable outcome.
If you have discovered inaccurate information on your credit report, it is essential to hire an attorney with experience in credit reporting and consumer protection laws. They can provide the support to help you dispute the inaccuracies and improve your credit standing. Do not let inaccurate information on your credit report hold you back - take action today with the assistance of a knowledgeable attorney.