Can a credit reporting agency be held liable for reporting incorrect information?

What the Law Says

The Fair Credit Reporting Act (FCRA) establishes legal duties for credit reporting agencies (CRAs) to promote fairness, accuracy, and privacy in consumer credit reporting.

Under the FCRA, CRAs must follow 'reasonable procedures to assure maximum possible accuracy' of the information they report about consumers. If a CRA fails to do so—and that failure leads to harm—the consumer may sue for damages.

The law also requires CRAs to investigate disputes within 30 days (or 45 days if additional information is provided), and to correct or delete inaccurate, incomplete, or unverifiable information. Failure to comply can result in civil liability.

Liability depends on whether the CRA’s conduct was negligent or willful. Negligent noncompliance may lead to actual damages plus costs and attorney’s fees. Willful noncompliance can trigger statutory damages of $100–$1,000 per violation, punitive damages, and attorney’s fees—no proof of actual harm required.

Statutory Text

The Congress makes the following findings: (1) The banking system is dependent upon fair and accurate credit reporting. Inaccurate credit reports directly impair the efficiency of the banking system, and unfair credit reporting methods undermine the public confidence which is essential to the continued functioning of the banking system.

— Fair Credit Reporting Act, 15 U.S.C. § 1681 — Congressional findings and statement of purpose

What to Do

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