A Simple Guide: What Happens If a Bank Uses an Inaccurate Background Check?

What to do if: a bank uses and inaccurate background check
Background Check Issues No Comments

When you apply for a loan or try to open a bank account, the bank looks at background reports—like your credit history or your past banking activity. But sometimes these reports contain mistakes. And when a bank relies on incorrect information, it can cause big problems.
Here’s what you need to know.

How an Incorrect Report Can Affect You

If a report about you is wrong, the bank may:

  • Deny your loan or account
  • Give you a higher interest rate
  • Require extra documents
  • Delay your application
  • Flag you as a “risk” even when you’ve done nothing wrong

It can feel unfair—but mistakes in these reports are more common than most people realize.

Why These Mistakes Happen

Errors can occur because of:

  • Mixed-up files (another person’s information showing up in your report)
  • Old or outdated negative marks
  • Identity theft
  • Incorrect account details
  • Data entry mistakes

Even one wrong line in a report can impact the bank’s decision.

Your Rights Under the Law

You’re protected by the Fair Credit Reporting Act (FCRA). It gives you important rights, including:

  • The right to a free copy of the report the bank used
  • The right to dispute anything that is inaccurate
  • The right to have mistakes corrected or deleted
  • The right to be notified if bad information caused a denial

You do not have to live with an incorrect report.

What To Do If This Happens

1. Ask for the report

After a denial, the bank must tell you which company provided the information.
2. Look for mistakes
Check for accounts you don’t recognize, wrong balances, old debts, or incorrect personal info.
3. Dispute the errors
Tell the reporting agency what’s wrong. They must investigate and fix any mistakes.
4. Tell the bank
After the errors are corrected, ask the bank to review your application again.
Get help if needed
If errors aren’t fixed or the issue caused harm, a consumer protection attorney can explain your options—many offer free consultations.

Bottom Line

A bad background report doesn’t mean you’re stuck. You have strong rights, and most problems can be fixed with the proper steps. If a bank relied on inaccurate information, you can challenge it, correct it, and often get the decision changed.

How We Can Help

If your bank background check contains errors that you’ve tried to dispute but they keep showing up, get a free case review now. Our consumer protection attorneys have been fighting false reporting for over 27 years and are here to help you.