- Case
- Frazier v. Equifax Information Services, LLC
- Court
- U.S. Court of Appeals for the Seventh Circuit
- Citation
- No. 23-2355 (7th Cir. Aug. 7, 2024)
- Decided
- August 7, 2024
- Bottom line
- In the Seventh Circuit, a reporting error is judged by reading the whole tradeline, so documenting how lenders actually read and used the entry is critical.
Background
Tamara Frazier stopped paying her mortgage in late 2015 and resolved the delinquency through a short sale that closed in January 2016. She knew the account would be reported as settled for less than the full payoff. Years later she found that her credit reports showed the closed mortgage as 90 or more days late, including late codes for months in 2018, 2019, and 2020, long after the loan no longer existed.
She disputed with Equifax several times. Each time Equifax sent the dispute to the mortgage subservicer, which confirmed its reporting. Equifax’s file showed the account closed in January 2016, “Paid For Less Than Full Balance,” with a $0 balance and $0 past due, but also a status of “90-119 Days Past Due” and late codes on eight dates. In 2020 a bank denied her mortgage application after reviewing a tri-merge report prepared by a reseller, CreditLink, which aggregated data from all three bureaus. That report did not show the closed date or the short sale.
Frazier had already lost a separate case against the subservicer, Frazier v. Dovenmuehle Mortgage, Inc., 72 F.4th 769 (7th Cir. 2023), in which the court held the furnished information was not materially misleading. She sued Equifax under §§ 1681e(b) and 1681i.
What the court held
Judge Brennan, joined by Judge Kirsch, affirmed summary judgment for Equifax. The court held that Dovenmuehle controlled. Reporting is read in full context, and because the delinquency status and late codes appeared directly beside entries showing the account was closed, paid for less than the full balance, and at a $0 balance, a reasonable reader would not conclude Frazier was currently delinquent. The court acknowledged that the only difference from Dovenmuehle was that Equifax showed dates where the subservicer had used dashes, and held that the difference did not change the result.
The court also held that Equifax could not be liable for the content of CreditLink’s report, since the only evidence of what Equifax itself would have reported came from its own file. And it found no admissible evidence that the reporting caused the denial. The bank’s adverse action letter and loan officer cited her debt-to-income ratio, driven by student loans, and her expert’s contrary opinion lacked support.
Judge Hamilton dissented. In his view, substantial evidence showed Equifax was told of false information and failed to correct it, and factual disputes about where in the chain of reporting the error arose, and about causation, should have gone to a jury.
Our take
We think Judge Hamilton has the better of the argument on accuracy. A late code for a month in 2019 on a loan that ended in 2016 is not a matter of interpretation; the borrower could not have been late on a loan that no longer existed. The majority’s “full context” approach assumes that lenders and their underwriting software read every field together. Automated underwriting does not always work that way, and the tri-merge report the bank actually used in this case did not even show the short sale.
The decision also illustrates a structural gap. Lenders often see a reseller’s merged report rather than a bureau’s own report. When the bureau can say the reseller’s report is not its responsibility, and the reseller can say it only passed along bureau data, the consumer has to prove exactly where the error entered.
Frazier does not hold that post-closure late codes are always lawful. It turned on how this tradeline was formatted and on a causation record that pointed to student loan debt. In circuits that apply a stricter view of what is “patently incorrect,” the same facts may come out differently.
What it means if your report is wrong
If a closed, paid, settled, or short-sold account shows late payments after the closing date, dispute those specific months in writing and ask that the payment history reflect no reporting after closure. If a lender denies you, request the adverse action notice and the credit report the lender actually used, including any merged report, and ask the loan officer what drove the decision. That evidence often decides cases like this one. A free case review can assess how Frazier affects a claim, with no fee unless we win.
Sources
Primary
Commentary we reviewed
- ABA Banking Journal — Seventh Circuit rules Equifax is not liable for mortgage denial in FCRA lawsuit
- accountsrecovery.net — Appeals court affirms ruling for CRA in FCRA case, but dissent says critical evidence was overlooked
Updated November 1, 2026. "Our take" is the firm's opinion. This page is general information, not legal advice, and later decisions may change the law.