By Kelly Dilworth, creditcards.com
A federal law is supposed to guarantee that credit report errors get fixed. So why do some people wind up spending months or even years trying to remove legitimate errors that are ruining their credit?
Take the case of Rahul Sharma of College Station, Texas. With the Fair Credit Reporting Act in place, it should not have taken Sharma six years and a meeting with a lawyer to get errors ranging from bad Social Security numbers to accounts that weren’t his erased from his credit report. But despite the decades-old consumer protection law, which guarantees consumers the right to get legitimate errors off their reports, Sharma fell through the cracks of the credit reporting system.
Representatives across the credit reporting and banking industries say that cases like Rahul Sharma’s are rare. “Like anything, (the credit reporting dispute process) is not a perfect system,” said Nessa Feddis, vice president and general counsel at the American Bankers Association. “Sometimes mistakes happen.”
However, consumer advocates and attorneys experienced with handling Fair Credit Reporting Act cases say that Sharma’s hellish experience of dealing with errors serious enough to deny him credit for more than half a decade is a perfect example of the problems they have been complaining about for years. The automated credit reporting dispute system used by the three major credit bureaus — Experian, Equifax and TransUnion — is broken, they say, and is causing too many consumers such as Sharma to miss out on the opportunity to apply for affordable credit, get a job in certain industries or avoid rate hikes on everything from apartment rentals to new cell phones.