The Importance of a Credit Report
A good credit report is an essential part of any consumer’s financial health. Whether it is a new car, a
new home, or even a job application, a credit report can be the difference in getting the result you want.
Unfortunately, credit reporting errors are not unheard of or uncommon.
So What Is A Credit Report?
A credit report is a summary of credit history, demographic information, and court proceedings that
reflect a consumer’s financial history. While there are a substantial number of consumer reporting
agencies (CRAs), most of us generally think of the Big Three: Equifax, Transunion, and Experian.
What Does That Mean For Me?
The Fair Credit Reporting Act (FCRA) was drafted to prevent consumers from being unjustly damaged
because of inaccurate or arbitrary information. The FCRA requires each credit report issued by each
Consumer Reporting Agency be held to the standard of maximum possible accuracy, but that doesn’t
equate to credit repair.
Some Credit Dangers
-When information from one consumer’s file merges with another consumer’s file. This problem
frequently occurs with individuals sharing the same name, such as family members; some
estimates report up to 35 percent of merged files involve family members with the same or
similar names. Understandably, merged files can result in one individual’s credit being tarnished
by the other individual’s damaged credit.
-Probably the most well-known danger to personal credit ratings. In simplest terms, identity
theft occurs when one individual steals the identity of another individual to gain access to
financial records, open new lines of credit, and generally commit fraud in the name of financial
-Identify theft also offers a great argument for frequently checking your own credit reports. If an
individual suspects they have been a victim of identity theft, they should contact the police and
fill out an identity theft affidavit from the Federal Trade Commission to submit to their relevant
creditors before notifying the Big Three. Taking these steps may allow the credit rating agencies
to place a freeze on the account and add a consumer statement to the report.
-Under federal law, access to an individual’s credit report gets restricted to certain people or
entities with a legitimate business need, such potential creditors, landlords, insurance
companies, and employers. But while soft inquiries won’t affect your credit, a hard pull can
lower a credit rating by several numbers. If someone does not have a permissible business
purpose to access an individual’s credit rating, the individual may have grounds for legal action
for any damage to the credit rating.
INACCURATE PUBLIC RECORDS
-CRAs frequently use independent agencies to search public records and report back on their
findings. But errors do occur; sometimes the records are not reported correctly, or include
outdated information. An individual’s credit report should accurately reflect their most current
credit rating status.
STALE OR RE-AGED DEBT
-Just like that bread on the counter, even debt can go stale. Generally speaking, most negative
tradelines should come off of a credit report seven years after the initial delinquency. Don’t
confuse that seven-year limitation period with the four-year statute of limitations Texas has for
bringing a suit on most debts, or the ten-year period that a valid Texas judgment may be
-Sometimes, creditors will alter the date of last payment to stay on a credit report longer than
they otherwise should, a practice known as re-aging a debt. This tends to occur when a debt has
been sold from an original creditor to a debt buyer or from a debt buyer to a subsequent debt
buyer. Regardless of how many times a debt changes hands, the limitations period still starts to
run at the date of first delinquency. When a creditor re-ages the debt, an individual may be able
to pursue a cause of action under the Fair Credit Reporting Act and other bodies of law such as
the Fair Debt Collection Practices Act.
What the Dispute Process Looks Like
If an individual discovers an inaccuracy in their credit report, the law gives them the right to dispute that
item. Once a dispute gets submitted, the CRAs are required to reinvestigate the issue, which will
generally involve communication with the furnisher of that information and require the CRAs to provide
the correct information.
CRAs have to establish and follow reasonable procedures to ensure maximum possible accuracy. When
CRAs fail to reinvestigate the debt, to establish procedures to ensure maximum possible accuracy, or
follow these procedures, an individual can investigate pursuing a cause of action against the CRAs under
The process starts by sending a dispute letter, written and submitted by certified mail with a return
receipt requested. The individual should include as much information about themselves, such as full
social security number and full driver’s license number, and the account in question as possible to
Free Consultation Available
You may get a free copy of your credit report once a year from each of the 3 Consumer Reporting
Agencies at www.annualcreditreport.com. Contact us now for a free consultation, including a
complimentary credit report review. In some cases, we may be able to help dispute the inaccuracies
and, if necessary, discuss the possibility of bringing suit against the CRAs and/or furnishers.