The Fair Credit Reporting Act (FCRA or “the Act”) was created to ensure that information included in consumer credit reports is accurate. The Act requires consumer reporting agencies to adopt reasonable procedures to meet the needs of creditors for consumer credit information but also to ensure that the information is fair and equitable to the consumer. The information should be confidential, accurate, relevant, and properly used. The filing of a bankruptcy is a significant reportable event in any credit report so the Act allows any bankruptcy cases to be reported. It also contains specific rules regarding the how long bankruptcy may appear on a credit report and what may be reported.
A consumer credit report may include information that an account was discharged in bankruptcy and may report the filing of the bankruptcy itself as long as it reports a zero balance due to reflect the fact that the consumer is no longer liable for the discharged debt. Information stating that a bankruptcy was filed may appear on a credit report for ten (10) years from the date that it is filed. Information regarding any individual credit account that is included in the bankruptcy may be reported separately for seven (7) years.
The Act requires creditors to update information to reflect all current and available information regardless of when the bankruptcy was filed. To do that, credit reporting agencies must require the creditors who publish with them to notify the agency when any significant changes occur in the account, even if the debt is included in a bankruptcy. For example:
- If a previously past due account has been reaffirmed in the bankruptcy, it should not be reported as discharged.
- If a debt that was previously discharged in bankruptcy, but was paid off after discharge, that favorable fact should be reported also.
- If the bankruptcy case has been dismissed, these facts should also be reported.
If you have any objections to the accuracy of the information in your credit report, you may request a re-investigation by submitting a written investigation request directly to the credit reporting agency. The agency is required to re-investigate every request and to record the current status of that information unless it has reasonable grounds to believe that the dispute by the consumer is frivolous or irrelevant. If information is inaccurate or can no longer be verified, the consumer reporting agency must promptly delete the information. But, if a consumer and a creditor merely disagree about a disputed fact, that disagreement does not, all by itself, constitute reasonable grounds for believing the dispute is frivolous or irrelevant.
The attorneys at Resnick & Moss, P.C. encourage all of our clients to review their credit frequently. Please visit http://www.annualcreditreport.com to obtain a free credit report. If you need additional assistance with an inaccurate credit report, or if you need assistance with your financial struggles or other debts, we can provide advice and recommend solutions. Please do not hesitate to call, Resnick & Moss, P.C., at (248) 642-5400, for a free telephone consultation.