Finding false information included on your credit report can be frustrating. However, when you suffer actual damages as a result of the error by the reporting agency or a lender, it’s important to understand that you are likely entitled to compensation. The following blog explores actual damages in further detail and the laws in place to protect consumers. Additionally, you’ll discover how a San Diego County credit reporting error lawyer can assist you through these matters.
What Laws Protect You From Credit Reporting Errors?
A study published in 2024 highlighted the fact that a considerable number of consumers have errors on their credit reports, with a staggering 44% of participants reporting at least one error on their accounts.
Despite the fact that credit reporting errors are far too common, there are laws in place that help protect your rights as a consumer.
The Fair Credit Reporting Act
One of the most important protections is the Fair Credit Reporting Act (FCRA). This law regulates how credit reporting agencies can use your information, ensures accuracy, and holds agencies responsible for the inclusion of false information. This law includes provisions on damages that consumers harmed by false or unfair credit reporting are entitled to.
Additionally, under the FCRA, credit reporting agencies and credit furnishers must investigate disputes within 30 days of receiving the report. Consumers are also granted the right to file a lawsuit against these entities for negligent and willful violations of the FCRA.
What Are Actual Damages Under the FCRA?
Under the FCRA, you have the right to pursue actual damages, which refer to any real, measurable losses you have suffered as a result of erroneous or outdated information on your credit report. Typically, these damages fall into two categories – economic and non-economic damages. Understanding what compensation is available under these categories can help you understand the compensation that may be available to you.
Financial (Economic) Damages
Economic damages are generally the easiest to calculate, as these reflect any actual monetary losses you have suffered as a result of the incorrect information on your credit report. Common damages include:
- Loan denials
- High interest rates
- Higher insurance premiums
- Lost employment opportunities
- Lost credit opportunities
Emotional Distress (Non-Economic) Damages
Non-economic damages, on the other hand, can be more complex. These represent any subjective losses like emotional distress or humiliation, as these do not have quantifiable amounts associated with them. Because these are considered subjective losses, they can be harder to prove. Common examples include:
- Emotional distress and anxiety
- Loss of sleep
- Embarrassment or humiliation
- Damage to your reputation
- Mental and emotional suffering
The court may be willing to award these damages if you can show that the errors caused significant stress and disruption to your life. You should also note that under the FCRA, emotional distress alone is enough to recover damages, even if you didn’t lose money as a result of the negligence.
Examples of Credit Errors That Lead to Actual Damages
Unfortunately, there are a number of credit errors that can appear on your credit report. As such, understanding the most common mistakes can help you quickly identify and dispute the inclusion of this information in your report.
Incorrect Personal Information
- Wrong name
- Wrong date of birth
- Wrong social security number
- Incorrect address
- Mixed credit file (mix-up with another person’s credit)
Incorrect Account Information
- Debts that do not belong to you
- Duplicate listing
- Incorrect reporting of late payments
- Accounts not removed after bankruptcy
- Identity theft-related accounts
Types of Damages Available in a Credit Reporting Lawsuit
It’s important to understand that there are several categories of compensation that you can recover in San Diego County if you suffer due to erroneous information on your credit report. It’s critical to understand these options, as many consumers are unsure of the amount of compensation they are eligible for.
Actual (Compensatory) Damages
As mentioned, you can recover actual damages for the economic and non-economic damages you suffer as a result of the errors on your credit report. This includes:
- Documentable monetary losses
- Lost opportunities
- Out-of-pocket expenses
- Emotional distress
Statutory Damages (Willful Violations)
Statutory damages can be awarded without proving actual damages. These are essentially pre-determined amounts of money that the court can order. For violations of the FCRA, statutory damages are typically $100-$1,000 per violation.
Punitive Damages (Severe Violations)
Though rare, the court may order punitive damages. It’s important to understand that these are not intended to serve as compensation for losses, but rather as a punishment for the defendant. These are ordered when the conduct shows intentional disregard for the law or recklessness. In addition to penalizing the defendant further, punitive damages act as a deterrent for similar conduct in the future.
How To Protect Yourself if You Spot a Credit Error
In the event that you find a credit error on your report, taking action is critical to protecting yourself and your financial future.
Step 1: Request and Review Credit Reports
The first thing you should do is review your credit reports. Consumers are eligible to receive one free credit report per year from each bureau, meaning you can check your credit for free, three times a year.
Step 2: File a Dispute With Evidence
Once you locate the error in your report, you should take steps to send a formal dispute. This includes highlighting the erroneous information on your report and providing supplemental documentation that the information is incorrect. This can include bank statements, police reports, loan agreements, and even identity theft affidavits.
Step 3: Follow Up with the Furnisher
Once you have filed the dispute with the appropriate party, they will have 30 days to conduct an investigation into the error. They must also notify the furnisher, who is the original creditor. As such, you should ensure that you also contact the original creditor to help strengthen your case and ensure that the dispute reaches the source.
Step 4: Document Losses
You should begin documenting all financial losses that you have incurred as a result of the error on your report, such as:
- Wage garnishments
- Interest rate quotes
- Emails and letters
- Lawsuits
- Denial letters
Step 5: Contact a Credit Reporting Error Attorney
Filing a dispute can be overwhelming. As such, consumers in San Diego County and across Southern California who have an error on their report that has resulted in damages should consider working with an experienced attorney to assist them through this process.
Contact a San Diego Credit Reporting Error Lawyer Today
Unfortunately, many consumers assume that mistakes on their credit reports are a part of life. While mistakes happen, you should not be left to bear the financial burden of someone else’s mistakes. That’s why you must connect with an experienced attorney who can assist you through these complex issues. At Barthel Legal, we understand how frustrating it can be to suffer because of another person’s negligence, which is why we’re here to help. Connect with us today to learn more about these matters and how our firm can fight for you.
