Incomplete Credit Information May Be Inaccurate under the FCRA

The Sixth Circuit Court of Appeals recently held that reporting incomplete credit information could render a tradeline on a credit report inaccurate within the meaning of the FCRA. This holding is important because of the potential ramifications of the opinion.

In Pittman v. Experian Info. Sols., Inc., the appellant entered into a “Trial Modification Plan (“TPP”) on his mortgage, pursuant to the Home Affordable Mortgage Program (“HAMP”)” in late 2011.  901 F.3d 619, 625 (6th Cir. 2018). After being accepted for the TPP, the appellant made all payments called for under the TPP. Id.

In June 2014, the appellant checked his credit reports and found that his home loan was being reported as past due. Id. He disputed the home-loan information on his credit reports with the three major consumer reporting agencies (“CRAs”). Id. at 626. The CRAs sent the appellant’s disputes to the loan servicer, which triggered the servicer’s duty under the FCRA to conduct a reasonable investigation of the appellant’s disputes. Id. The loan servicer concluded the credit information was being reported correctly. Id.

There were two main issues on appeal: (1) whether the TPP was legally enforceable, and (2) whether the credit information was inaccurate because the loan servicer failed to note in the credit information it furnished the CRAs that the loan was in a TPP. Id. at 627.

The Pittman Court held in the appellant’s favor on both issues. The Court’s holding on the second issue is of interest here:

[U]nder [the] FCRA, we initially ask about the completeness and accuracy of the reporting. And failing to report the existence of the TPP constitutes incomplete reporting. Reporting that Pittman was delinquent on his loan payments without reporting the TPP implies a much greater degree of financial irresponsibility than was present here. And the existence of and Pittman’s compliance with the terms of the TPP is relevant information about the status of his mortgage loan. Without this information, the Servicers’ reporting was incomplete.

Id. at 639.

To be clear, under Pittman, completeness and accuracy of the credit information are separate and distinct inquiries. Incomplete credit information may render a tradeline inaccurate and, hence, actionable under the FCRA. This holding could have many applications, including the reporting of debts included in a consumer bankruptcy case.

One compelling example that comes to mind is the failure to note that a loan is subject to a Chapter 13 payment plan. The correct reporting of debts in an ongoing Chapter 13 case is an unsettled area of the FCRA. The Pittman decision could help sway the court’s in the consumer’s favor.