Just ask Julie Miller of Marion County, Oregon. After being denied a line of credit at a bank, she discovered that her credit report contained errors. They included an inaccurate Social Security number, an inaccurate birth date, and 38 collection accounts that were not hers. She was mixed up with another Julie Miller who was not as creditworthy.
As a result, Ms. Miller was hounded by debt collectors. She repeatedly lost opportunities to seek credit for herself, her college-aged son, and her disabled brother.
After years of disputing the errors with Equifax, Ms. Miller brought suit in federal court for violations of the Fair Credit Reporting Act (FCRA). Last month, a jury awarded her an unprecedented $18.4 million in punitive damages, and $180,000 in compensatory damages for her losses. Read more about her story in this New York Times article.
Ms. Miller is not alone. A recent FTC study on credit report accuracy found that one in five consumers had an error on at least one of their credit reports. One in four consumers had errors that might affect their credit scores.
These errors lead consumers to pay more for loans and insurance, or to lose opportunities for credit altogether.
How to combat credit report errors:
- Review your credit report for accuracy. The FCRA entitles you to a free yearly copy from each major credit bureau: Equifax, Experian, and TransUnion. Request paper copies by sending in the FTC’s Annual Credit Report Request Form. Although credit reports are available online, paper copies are easier to read and dispute.
- Identify any errors. Review your personal information as well as all account information carefully. Make note of any inaccuracies, which may suggest fraudulent activity.
- Check reporting time of any negative information. If you have negative credit history, make sure it is being reported according to the following FCRA time limits: 10 years for bankruptcy, 7 years for everything else.
- Dispute any errors on your report. Many errors can be fixed through the dispute process (while Equifax failed to fix errors on Ms. Miller’s report, Experian and TransUnion did so). Look for tips on how to dispute credit report errors in my future posts.
- Seek legal counsel if errors are not corrected. If the credit reporting agencies continue to verify inaccuracies, a lawsuit may be your best recourse. You will most likely have damages under the FCRA.
Protect your credit for your present and future financial health. If you don’t, who will?