Annual Free Credit Report – Your Legal Right #9 & 10

Your Credit Report: Your Legal Right #9

You Have the Right to Know When Your Credit Report Has Been Used for Adverse Action

Anytime you are turned down for credit or insurance for personal, family, or household purposes, and the creditor bases that decision either partially or completely on information in your credit report, they have to tell you the name and address of the credit bureau that supplied your report. You’ll then be able to order a free copy. This is also true if the cost of your credit or insurance was raised in whole or in part because of information they got from your credit record.

As I mentioned earlier, employers may see your credit report if they are evaluating you for “employment, promotion, reassignment or retention” as an employee. Before you are denied a job, you lose your current job, or you are denied a promotion or new job because of information in your credit report, the employer must give you a copy of your credit report.

Your Credit Report: Your Legal Right #10

You May Have the Right to Sue the Credit Bureau

The Fair Credit Reporting Act allows consumers to sue credit bureaus if they willfully violate the Act. If you are planning on suing a credit bureau, be forewarned: It may be expensive and difficult to win.

Suits can be brought in either state or federal court; an attorney can help you decide which is most appropriate for your case. Although class-action suits against credit bureaus are not common, they are not prohibited by the FCRA. Nor are jury trials, which are sometimes used successfully in these types of cases.

The FCRA allows consumers to bring civil action against credit bureaus for willful noncompliance or negligent noncompliance. In cases of “willful noncompliance,” a consumer sues a credit bureau or user because it willfully fails to comply with any requirements of the Act, The consumer can sue for an amount equal to the sum of actual damages (not less than $100 or more than $1,000), attorney’s fees, plus punitive damages.

Negligent noncompliance suits allege that a credit bureau showed negligence in failing to comply with the requirements of the Act. Often, it can mean that the credit bureau does not have reasonable procedures in place to ensure that it is in compliance with the Act or, if it does have appropriate procedures, an employee fails to follow them in a particular case. In the case of negligent noncompliance, a consumer can sue for actual damages plus attorney’s fees.

These two types of noncompliance are very closely related. If you are considering suing a credit bureau, seek the assistance of an attorney familiar with consumer credit protection laws to help you determine how to proceed. If you are interested in researching remedies yourself, the National Consumer Law Center’s Fair Credit Reporting Act Manual can help.