- Posted August 7, 2013 by
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Mistake of Identity Results in Negative Information on Credit Report
Credit reports can impact aspects of a person’s life, either positively or negatively. The information can impact whether you can get a loan, how much you will need to pay in order to borrow money, and help protect you from identity theft. Errors on your credit reports that can have a negatively impact occur when a person has applied for credit under different names, a clerical errors was made in reading or entering names or address information from a hand written application, an inaccurate Social Security number was given (or the number was misread), or loan or credit card payments were accidently applied to the wrong account.
Additionally, debt collectors can also report negative information to a credit bureau. Checking your credit report annually, to find negative information, and disputing any errors, can help ensure that this information does not stay on your credit report long.
Julie Miller, a resident of Oregon, tried without success for two years to get the Atlanta-based Equifax Corp. to correct errors in her credit report when negative information from another Julie Miller found its way onto her credit report. As with debt collectors who contact the wrong person because you have a similar name as a debtor, credit reporting agencies can make similar errors that can have a serious impact on a person’s credit. In this case, Miller was turned down for a loan in 2009 based on inaccurate credit information. The Fair Credit Reporting Act (FRCA) (http://www.ftc.gov/os/statutes/031224fcra.pdf) is meant to protect consumers from such errors.
When lenders deny you credit, they are obligated to tell you whether the denial was due to information on your credit report. However, in this case, the negative credit information about Julie Miller No. 2 was merged with Julie Miller No. 1’s file because of their common name. After Miller tried for two years get Equifax Corp. to fix her credit report, she sued and won a multimillion dollar judgment.
This judgment is good news for consumers. Even though there have been updates to the FCRA, which requires that credit-reporting agencies pay closer attention to accuracy, one out of every five credit reports continue to contain errors. The FCRA provides consumers with a way to fix their credit reports, as well as the tools to fight back when they have been ignored.
The FCRA has set up a simple procedure to detect and correct errors in credit reports as they arise. First, each of the three major credit reporting bureaus is required by law to provide every consumer with a free copy of his or her credit report every 12 months. Additionally, if a consumer has been denied credit based on information in the report or suspect they have been a victim of identity theft, they can also obtain a free copy.
If you identify any inaccurate information, they should be corrected in writing along with a formal letter or informally by noting the inaccuracies directly on a copy of the credit report. If there is additional documentation needed to prove your claim, you should attach a copy of the documents (but you should always keep the originals).
Any corrections and documentation should be mailed back the credit bureau. Be sure to used certified mail (with a return receipt) to ensure you have proof that the agency received the correction request. After the credit reporting agency receives your request, they are required to investigate the claim and respond promptly (usually within 30 days). You can also request a free corrected version of your report once the investigation has ended.
In Miller’s case, she had followed every one of these steps. However Equifax did not investigate or correct the report. After repeated requests that Equifax take action, which were ignored, Miller sued. She was successful in her lawsuit and was awarded $180,000 in compensatory damages as well as $18.4 million in punitive damages
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