Credit Monitoring Articles

Credit Bureaus Held Responsible for Inaccurate Information

Like most organizations, credit bureaus make errors occasionally. In fact, one study reveals that nearly 80 percent of all credit reports contain some type of inaccuracy. But a recent court ruling will make it easier for consumers to sue credit bureaus if they post false information on an individual's credit file that they gathered on government watch list.

According to the Legal Intelligencer, a recent decision by the 3rd U.S. Circuit Court of Appeals will make it easier for consumers who have been denied credit based on inaccurate information to obtain restitution. The move will also hold credit bureaus to tighter standards in regards to ensuring the information they post is legitimate. The ruling comes after one consumer was confused with a known Colombian drug dealer who was featured on the U.S. Treasury Department's watch list. The information eventually seeped onto her credit report.

Opponents of the ruling argued that information taken from the Office of Foreign Assets Control - a government watch list - was not expressly covered by the Fair Credit Reporting Act, which dictates how credit bureaus handle consumer data, the Intelligencer reports. But the court opinion disagreed with this argument.

"In order to conclude that the OFAC alert is not subject to that remedial statute even though the rest of the report clearly falls within the definition of 'consumer report,' we would have to conclude that Congress did not mean what it said when it unequivocally defined 'consumer report' to include 'any ... communication of any information by a consumer reporting agency," Chief Judge Theodore McKee concluded in his opinion.

This case highlights the need for consumers to examine their credit reports regularly to ensure that all information listed is accurate. If an individual finds an error, they should dispute the negative information as soon as it is discovered to avoid a denial of credit or a lower score. Consumers should also consider signing up for a credit monitoring service, which will alert them to any alterations made to their file. This includes any new accounts being opened in their name.