Complaints about errors in credit reports have exploded since the start of the COVID-19 pandemic – and these errors can pose a number of problems for the consumer.
Roseann Palmeiri wanted to borrow money for some home improvement projects. But she was shocked to learn that her credit score had dropped 200 points.
“I said, ‘How am I going to apply for a loan and get the right interest rates now? I might not even get the loan, ”she said.
Palmeiri says she disputed a fraudulent debit on her credit card and it was somehow reported as bad debt.
“To drop by nearly 200 points? It’s ridiculous. And first of all, you really had no business to report until this was resolved, ”she says.
The Consumer Financial Protection Bureau (CFPB) says there were 195,974 complaints about bad credit report information last year – almost as many as all other complaints combined.
Palmeiri’s credit card company corrected the error. But it’s not always that simple.
“The wrong information is more likely to be put on your credit report than it is to correct it. It’s a mess, ”says Ed Mierzwinski of the US Public Interest Research Group (PIRG).
Mierzwinski says that a mistake on a credit report can have serious consequences.
“If you have a bad credit history and you can’t fix it, you’ll pay more for credit or be in arrears with credit or you might even be turned down for a job,” he says.
The PIRG hopes that under the Biden administration, the CFPB will take a tougher line on credit bureaus that publish bad information. But at the end of the day, it’s up to everyone else to make sure their credit report is accurate.
If the issue is not resolved, you can consider taking legal action against both the credit agency and the company that reported the misinformation.
“Sometimes you should consult a lawyer before writing your letter because it can be difficult to need help trying to figure out how to articulate the information. It is very good. But no legal action can be taken until the credit bureau and the provider have had the opportunity to correct the information, ”says consumer lawyer Craig Kimmel of Kimmel & Silverman.