When credit bureaus fail to correct errors despite proper disputes, you may have grounds to sue under the Fair Credit Reporting Act (FCRA). FCRA lawsuits hold bureaus accountable for negligent or willful failures and can recover significant damages.
When to Consider a Lawsuit
Consider legal action when you disputed errors with proper documentation, the bureau failed to properly investigate, errors remain on your report despite being demonstrably wrong, or you suffered harm (denied credit, higher rates, job loss) because of the errors.
Lawsuits aren't the first step—you should first dispute and give bureaus opportunity to correct. But when they fail, legal action may be appropriate.
FCRA Requirements Bureaus Violate
Common violations include failure to conduct reasonable investigations after disputes, failure to correct or delete unverifiable information, reinserting previously deleted information without proper notice, reporting information after being notified it's disputed (without noting the dispute), and continued reporting of information known to be inaccurate.
Negligent vs. Willful Violations
Negligent violations occur when bureaus fail to follow reasonable procedures but without intent to violate the law. You can recover actual damages and attorney's fees.
Willful violations occur when bureaus knowingly or recklessly disregard their obligations. You can recover actual damages, statutory damages ($100-$1,000 per violation), punitive damages, and attorney's fees. Willful claims have more recovery potential.
Actual Damages
Actual damages compensate for real harm you suffered, including credit denial or unfavorable terms due to errors, higher interest rates paid, lost employment opportunities (if credit checks were involved), out-of-pocket expenses related to the dispute, and emotional distress from dealing with errors.
Document everything—denial letters, rate quotes, time spent, emotional impact.
Statutory Damages
For willful violations, courts can award $100 to $1,000 per violation even without proven actual damages. This makes lawsuits viable even when individual harm is difficult to quantify.
Punitive Damages
Willful violations can also result in punitive damages—amounts beyond actual harm intended to punish particularly bad behavior. Punitive damages in FCRA cases have reached hundreds of thousands of dollars in egregious cases.
Attorney's Fees
Successful FCRA plaintiffs can recover attorney's fees from defendants. This makes it economically possible to pursue cases—attorneys can take cases on contingency knowing fees will be paid by the defendant if you win.
Building Your Case
Documentation is essential. Keep copies of your credit reports showing errors, dispute letters and responses, evidence the information was wrong, proof of harm (denial letters, rate quotes), and correspondence with bureaus and furnishers.
Suing Data Furnishers
You can also sue the creditors or collectors (data furnishers) who provided the inaccurate information. Furnishers have investigation obligations when notified of disputes. If they fail to investigate or continue reporting known errors, they may be liable.
Statute of Limitations
FCRA claims must generally be filed within two years of discovering the violation, or five years from the violation itself, whichever is earlier. Don't wait too long after discovering ongoing errors.
Finding an Attorney
Consumer rights attorneys handle FCRA cases. Many work on contingency—they receive attorney's fees from the defendant if you win, not from your recovery. Look for attorneys with specific FCRA experience.
Class Actions
Some FCRA violations affect many consumers similarly. Class action lawsuits can address systemic problems with bureau practices. You might join an existing class or your case might lead to class treatment.