While lenders try to provide accurate information, sometimes mistakes are made. The latest data shows that 1 in 3 Americans have an error on their credit report. This means, for many people, there is the possibility of experiencing financial problems because of these mistakes, which could include being unable to get a loan or rent housing. The good news is there are ways to fix these errors.
Credit bureaus and data furnishers, including but not limited to Experian, Equifax, and TransUnion have been around since the early 1900s. As a result of being “around for so long,” they have been responsible for accumulating millions of pieces of consumer credit information that is required for individuals to be able to build their financial health through credit.
The data held by these companies are abundant for both creditors and individuals who are interested in obtaining credit. However, these entities have had a history of mishandling or misreporting this information. This may be due to their many business practices that include lack of oversight, noncompliance with the Fair Credit Reporting Act (FCRA), and more.
This is a problem, as inaccurate information can result in individuals being denied access to credit that they otherwise would have been approved for. In turn, this leads to having a lower or even nonexistent credit score which can then lead to being denied certain privileges such as renting an apartment, buying a car, etc. Individuals who are victims of inaccuracies in their credit reports can file a complaint with the Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC). While this is a step in the right direction to ensuring that companies abide by federal laws, it can be an extensive process for those who have been affected.
To help those who have been victims of unfair reporting, the Fair Credit Reporting Act (FCRA) has laws in place that include battling against inaccurate reporting by credit bureaus and data furnishers. However, it is still considered to be a very slow process that can take years before any results are seen if at all.
This is where pre-litigation comes into play. Pre-litigation can be used as a tool for individuals to use against credit bureaus and data furnishers by filing suit before actually filing an official complaint with the FCRA.
This is similar to how pre-lawsuit negotiations are done sometimes to prevent the need for a full-blown lawyer-client relationship. The main difference between these two processes is that pre-litigation negotiations are usually done with the intent to file a suit, while pre-lawsuit negotiations are usually used as a way to negotiate terms.
Pre-litigating against credit bureaus and data furnishers can be advantageous for those who have been victims of inaccurate or untimely reporting of their credit history. Since these firms have a history of mishandling or misreporting credit information, it is common for individuals to experience problems that lead to the need to file a complaint with the CFPB and FTC. However, by filing pre-litigation, the individual allows themselves to settle before having to file an official complaint or even go through further hardships such as court appearances and have the court rule in their favor without actually going through that process.
Another advantage of filing a pre-litigation is that it shows that the injured party is taking things into their own hands and not just sitting back and allowing this injustice to happen. However, since these cases are filed before official complaints have been made, they have a higher chance of being settled.
With the number of individuals who are affected by inaccuracies in their credit reports, it would make sense that these firms would want to do everything they can to avoid the consequences of litigation. For example, Experian had a class-action lawsuit filed against them for not removing deceased people from their credit reporting list. This suit was filed in 2007 and was settled in May of 2015.
While the process of filing an actual complaint with the CFPB and FTC is lengthy, it may end up being more time-consuming than filing pre-litigation. This is because credit bureaus can fight against official complaints by using tactics such as questioning the accuracy of the information, the plaintiff’s understanding of what was reported, and questioning whether any harm has been done as a result of the report.
To successfully file pre-litigation against credit bureaus and data furnishers, it is important to gather evidence of inaccurate reporting. This can be done by finding old reports from these firms going back as far as possible and double-checking the information. If the report has been used to deny any loans or services, those details will also need to be gathered as well as evidence of applying for and receiving these loans and services.
Once everything has been gathered and compiled, it is time to proceed with filing pre-litigation against credit bureaus and data furnishers. Lawyers who handle credit repair can be a great resource to those looking for legal counsel on how to go about this process. It is important to make sure they have experience with filing pre-litigation as well as any supporting evidence that can help improve their chances of settling before going through an official complaint.
When dealing with credit bureaus and furnishers it is important to maintain a record of everything that has transpired. When credit reports are erroneous, it is important to have evidence to file an official complaint with the CFPB or FTC. An easier, and more efficient method of challenging credit bureaus and furnishers is to file pre-litigation with the use of a lawyer experienced in this area.
By filing pre-litigation, individuals give themselves the ability to settle before going through an official complaint or court processes such as appearances and verdicts without actually having to go through that process. A successful pre-litigation case will result in the credit bureaus and data furnishers agreeing to correct information and provide compensation for damages such as lost time and financial burden.
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