Repairing Credit After Fair Credit Reporting Violations by Banks

Madeleine Jones
February 17, 2017

Foreclosures and short sales in Nevada may damage the credit of the debtors, but the Fair Credit Reporting Act offers some remedies that people may use to help rebuild and repair their credit by dealing with negative information that has been reported. Negative information reported about delinquencies after foreclosures or short sales may cause credit scores to drop by as much as 160 points. People may get the negative reports removed from their credit if they are not completely accurate, however. Lawyers who understand how to use the FCRA to help with credit repair may assist their clients with challenging incorrectly reported information in order to help them remove it and to bring up their credit scores again.

(Article continues below Infographic)

infographic_Repairing Credit after Bank Violations_Credit repair


The Fair Credit Reporting Act

The federal Fair Credit Reporting Act protects consumers from having incorrect information reported on their credit reports. This means that if anything is incorrect on the reports, consumers may challenge the information, and the law provides that the creditors then have a limited time to respond or correct what is wrong. Consumers may start by getting copies of their credit reports from the three major credit reporting agencies, which include Experian, TransUnion and Equifax. By law, the three major agencies must provide one free report to consumers every year.

Once the consumers have copies of their reports, they need to review the information in them, taking care to check dates and amounts of all negatively reported delinquencies. Other common errors include the company’s reporting that the account is still open when it is closed, that the delinquency was charged off when payment was accepted in order to release the lien and others.

When borrowers believe that there are errors, they can then file qualified written requests for information asking for all documentation and a payment history of the payments the lenders received for the life of the loan. The lenders must acknowledge that they received the written requests within five days, and they must respond to it within 21 days of receiving them. If the lenders do not respond to the requests or comply with them, then the borrowers may file suits against them in court. They may also take action against the credit reporting agencies if the negative information that has not been verified by the lenders are not removed. Credit repair after short sales is possible by challenging incorrect information that is contained in the credit reports.