Credit reporting errors can cause significant damage to a person’s financial well-being. In Maryland, creditors must follow strict guidelines under both federal and state laws when reporting information to credit bureaus.
When creditors intentionally make false reports, it can lead to serious legal consequences for them. The impact on the consumer, however, can be absolutely devastating.
Why would creditors make false credit reports?
Maryland residents are under the protection of the Fair Credit Reporting Act, which requires creditors to report accurate and complete information. However, some creditors may try to manipulate a person’s credit report out of spite, especially in cases where there is a financial dispute. These malicious actions might involve reporting a settled debt as unpaid or misrepresenting the amount owed. Such inaccuracies can severely lower credit scores, making it difficult for someone to obtain loans or mortgages.
Can you take legal action against malicious creditors?
Creditors who make intentional errors risk facing legal repercussions in Maryland. The FCRA allows consumers to dispute inaccurate information on their credit reports, and creditors must respond to these disputes within a reasonable time. If a creditor fails to correct the errors, the consumer may have the right to seek compensation for damages. Additionally, under the Maryland Consumer Protection Act, creditors who engage in fraudulent or deceptive practices can face civil penalties.
Should I take action to prevent intentional credit reporting errors?
To avoid becoming a target of these types of errors, it is important to monitor credit reports regularly. Maryland residents can receive one free credit report per year from each of the three major credit bureaus—Equifax, Experian and TransUnion. Catching and disputing errors early can prevent long-term financial harm.
While most creditors follow the law, some may intentionally make credit reporting errors. These malicious actions can harm individuals, but there are legal protections available. Taking immediate steps to dispute inaccuracies and regularly checking credit reports are important ways to safeguard financial health.