Fair Credit Reporting Act News
Inaccurate credit reports resulting from mistakes in public record searches can damage credit
Monday, December 9, 2024 - Credit reporting relies heavily on public data including civil rulings, tax liens, and bankruptcy filings. Credit bureaus include this data in credit reports to offer a full view of a person's financial background. But mistakes in public record searches--from outdated information to erroneous data entry to identification mismatches--can unfairly harm a consumer's credit profile. To gather public record information, credit bureaus sometimes rely on outside data aggregators. Records from courts, government organizations, and other official sources are pulled by these data vendors. Errors might happen several times: during the reporting process, when records are matched to people, or during the retrieval of records. For someone with a similar name, for instance, a bankruptcy application can be inadvertently put to an unrelated person's credit report or a settled tax lien might show as unpaid due to delayed updates. Consumers are protected under the Fair Credit Reporting Act (FCRA), which forces lenders and credit bureaus to immediately correct credit reporting errors. Consumers are greatly concerned about credit report mistakes resulting from public records, according to the Federal Trade Commission (FTC). Comparably, the Consumer Financial Protection Bureau (CFPB) gets many complaints regarding public record errors, therefore exposing problems that include misattributed liens or outdated judgments. Public record data is primarily weighted in credit scoring algorithms, hence these mistakes are very harmful, especially for negative items like bankruptcies or liens.
Public record mistakes on credit reports have serious repercussions. Negative marks from bankruptcies or unpaid liens can drastically reduce a consumer's credit score, therefore restricting their access to credit cards, loans, or discounted interest rates. For lenders or landlords running background checks, even little errors like a resolved judgment still designated as ongoing can cause problems. Disputing public record mistakes presents further difficulties for consumers since these disputes usually involve several parties and difficult verifying procedures. A customer who mistakenly connected to a bankruptcy application, for example, would find it difficult to have the error corrected as the credit bureau would demand evidence from the court showing the filing does not match them needing a major effort to negotiate bureaucratic obstacles, this process can be time-consuming and taxing. Consumers should routinely check their credit reports for public record mistakes to guard themselves. AnnualCreditReport.com offers free annual credit reports from three of the main credit bureaus: Equifax, Experian, and TransUnion. Consumers should especially pay particular attention to public record sections of these reviews to make sure all reported items are true and current.
Should an error come to light, it must be quickly disputed. Consumers can submit erroneous public records to the credit bureau and file conflicts. Supporting documentation--such as court records or evidence of settled decisions--may help to bolster the argument. Credit bureaus under the Fair Credit Reporting Act (FCRA) must look at conflicts within 30 days. Should the error start with the public record source--such as a court--consumers could have to get in touch with the source personally to ask for changes.
