Yep, it does happen. A woman in Florida sued Equifax for failing to correct errors on her credit report. The errors were there since 1994. WOW!
The jury awarded her $219,000 in compensatory damages and over $2,000,000 in punitive damages. The punitive damages portion will probably be reduced on appeal, but it does send a message. The credit reporting agencies must make sure that your credit report is accurate. If you find a flaw, report it and pursue them to make sure it is fixed.