If a credit bureau, a lender or a background check company put something false in your file and it cost you, there is a federal deadline for doing anything about it in court. It is shorter than many people assume, it runs while you are still disputing, and in some situations it has already started before you knew there was a problem.
This is how the Fair Credit Reporting Act’s time limit works, where the courts have drawn its lines, and what to do if your dates are getting close.
The rule in one sentence
The deadline is in 15 U.S.C. § 1681p. A lawsuit under the Fair Credit Reporting Act must be brought:
not later than the earlier of — (1) 2 years after the date of discovery by the plaintiff of the violation that is the basis for such liability; or (2) 5 years after the date on which the violation that is the basis for such liability occurs.
There are two clocks, and whichever runs out first controls. The two-year clock starts when you discover the violation. The five-year clock starts when the violation happens, whether or not you know about it. A violation you discover four and a half years after it happened leaves you six months, not two years. A violation you never discover within five years cannot be sued on at all.
The same section applies to every kind of claim the Act creates: a credit bureau’s inaccurate report, a bureau’s or furnisher’s failed reinvestigation, a background check company’s reporting error, and an employer’s or landlord’s misuse of a report.
Why there are two clocks
The two-clock structure is a response to a Supreme Court decision. Before 2003, § 1681p allowed suit within two years “from the date on which the liability arises,” with a single exception for cases where a defendant had willfully misrepresented information the Act required it to disclose. In TRW Inc. v. Andrews, decided on November 13, 2001, a woman whose identity had been used by an impostor sued a credit bureau over reports it had released to the impostor’s creditors. She argued that her time to sue should run from when she discovered what had happened. The Court disagreed. It held that “a discovery rule does not govern § 1681p,” because the statute “explicitly delineates the exceptional case in which discovery triggers the two-year limitation.”
Congress rewrote the section in 2003, in the Fair and Accurate Credit Transactions Act (Pub. L. 108-159). The prior text was replaced with the current version: a two-year period that runs from discovery, capped by a five-year period that runs from the violation. The separate misrepresentation exception disappeared, because discovery now governs every claim. The change is why a person who learns of an error long after it first appeared can still sue, but only within the outer five-year limit.
What counts as “discovery”
The two-year clock starts when you discover the violation. Two federal courts of appeals have held that this means discovery of the facts, not discovery that the facts amount to a violation of the law.
In Mack v. Equable Ascent Financial, L.L.C., decided April 11, 2014, the Fifth Circuit applied the rule that “a limitations period begins to run when a claimant discovers the facts that give rise to a claim and not when a claimant discovers that those facts constitute a legal violation.” Mack saw the company’s inquiry on his TransUnion report in May 2009. He began studying the Act in April 2011, concluded the inquiry had no permissible purpose, and sued in December 2011, arguing that his two years ran from when he understood the law. The court held that they ran from May 2009, and the claim was time-barred.
The Sixth Circuit followed Mack in a background check case, Rocheleau v. Elder Living Construction, LLC, No. 15-1588, decided February 18, 2016. A prospective employer ordered a screening report in September 2011 that listed four criminal convictions matched to the applicant’s name and date of birth. He received notices describing the report that same month and sued in November 2013. He argued that he needed time to study the Act before he could know he had a claim. The court disagreed: the clock started when he learned the facts in September 2011, and the suit came too late.
In practice, the date that matters is usually the day you saw the inaccurate entry, received a denial letter that named the report, or were told by a lender or employer what the report said. Not knowing that the Fair Credit Reporting Act applied does not move the date.
When a new report or a new dispute starts a new clock
An inaccurate entry that sits on a file for years does not necessarily put the whole case outside the deadline. Courts have recognized that some later events are new violations with their own deadlines, and they have disagreed about others.
A new report to a new user. In Hyde v. Hibernia National Bank, 861 F.2d 446 (5th Cir. 1988), the court held that “each transmission of the same credit report is a separate and distinct tort to which a separate statute of limitations applies.” Under that reasoning, a report sent to a mortgage lender last month can be sued on even if the same error appeared in a report sent to a car dealer three years ago.
A new dispute. This is where courts divide.
- Some courts treat each new dispute as creating a new duty. The Northern District of Georgia, in Thomas v. Wells Fargo Bank, N.A., No. 1:17-cv-3146 (May 30, 2018), held that the furnisher-duty provision “creates a new right of action each time the furnisher … receives notice of a consumer’s dispute … yet fails to comply with its duties.” It relied on the principle that “each separate notice of dispute triggers a duty to investigate the disputed information, regardless of whether the information has been previously disputed.”
- Other courts have refused to let repeated disputes about the same error restart the clock. In Hancock v. Charter One Mortgage (E.D. Mich. May 30, 2008), the court reasoned that allowing it “would allow [the plaintiffs] to indefinitely extend the limitations period by simply sending another complaint letter.”
The safe reading is the narrow one. Do not count on a later dispute to rescue a claim whose original deadline has passed. Where the error has kept appearing in new reports to new lenders, landlords or employers, those later reports may carry their own deadlines, and they are worth identifying.
Disputing does not stop the clock
People often assume the deadline waits while a dispute is pending. Nothing in § 1681p says so: the two-year period runs from discovery, and the section contains no pause for a reinvestigation. In Rocheleau, the applicant also argued that the dispute process should suspend the clock. The court rejected the argument because he had never disputed the accuracy of the report at all. That is a reminder to dispute, not a promise that disputing buys time.
A dispute with a credit bureau takes 30 days, sometimes 45, and many people dispute two or three times before giving up on the process. That can use up a meaningful part of a two-year period without anyone noticing. If you are on a second or third round of disputes over an error you first saw more than a year ago, the date you first saw it is the one to write down.
Background checks run on the same clock
The deadline is the same for a background check company’s report as for a credit bureau’s. What usually differs is how you find out. Many applicants first see a background report when an employer sends a copy with a pre-adverse action notice, or learn of it from an adverse action letter that names the company that supplied it. Keep that letter and the envelope or email it came in. It is often the clearest evidence of the date you learned the facts, and that date can decide whether a claim is timely.
If your dates are getting close
Write down four dates:
- the day you first saw the inaccurate entry or report;
- the day you were denied credit, housing or a job because of it;
- the date of each dispute you sent and each response you received;
- the date of any later report you know was sent to someone else.
Keep the letters, emails and screenshots that prove each one.
Then talk to a lawyer before the earliest possible two-year date, not after it. Whether a particular claim is timely can depend on which court would hear it and how that court treats repeated disputes, and that is a question to answer with the documents in hand.
We handle credit reporting and background check errors under the Fair Credit Reporting Act, including cases where the timing is close. You pay nothing unless we win.
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Related reading on this site: FCRA lawsuits · suing a credit bureau · suing a background check company · when a credit dispute is denied · what a willful FCRA violation is · a job offer rescinded after a background check · disputing a background check · identity theft on your credit report · a credit report that says you are deceased · credit reporting errors.
Sources
- 15 U.S.C. § 1681p (current text and 2003 amendment note, Pub. L. 108-159)
- TRW Inc. v. Andrews, 534 U.S. 19 (2001)
- Mack v. Equable Ascent Financial, L.L.C., No. 13-40128 (5th Cir. Apr. 11, 2014)
- Rocheleau v. Elder Living Construction, LLC, No. 15-1588 (6th Cir. Feb. 18, 2016)
- Hyde v. Hibernia National Bank, 861 F.2d 446 (5th Cir. 1988)
- Thomas v. Wells Fargo Bank, N.A., No. 1:17-cv-3146 (N.D. Ga. May 30, 2018)
- Hancock v. Charter One Mortgage, No. 2:07-cv-15118 (E.D. Mich. May 30, 2008)
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