When you have inaccurate items on your credit report, it’s important to dispute them, especially if they’re negative items that lower your score. It’s your responsibility and in your best interest to fix your credit history whenever you see a problem, and there are legal steps you can take to resolve most issues.
Sometimes items can show up that don’t belong to you, or you’ll see charged-off accounts which were paid, or something else shows up that isn’t your responsibility. Duplicate accounts have also been known to appear, or older information improperly deleted from a database. In such cases, one of the first steps is recognizing the negative items and making sure they’re inaccurate.
If you’re not sure, you can still dispute them. However, if you recognize the nature of the mistake, it will help to gather documentation to prove the validity of your dispute to the reporting agencies. More information about mailing letters of dispute can be found on this website.
Table of Contents
- 1 Will the Credit Bureaus Investigate Disputes?
- 2 Why do the Credit Bureaus Have to Investigate?
- 3 Understanding How Credit Bureaus Investigate Disputes
- 4 Garbage In: Garbage Out
- 5 The Way It Really Is
- 6 What If a Credit Reporting Investigation Doesn’t Resolve My Dispute?
- 7 Adding a Statement to Your Credit Reports
- 8 Pursuing Disputes and Investigations Further
- 9 Proof of Verification
- 10 Seeking Legal Redress from Credit Bureaus
Will the Credit Bureaus Investigate Disputes?
Yes, credit bureaus are obligated by law to investigate disputes. The question is how well they do it. According to the law, the credit bureaus are required to investigate your disputes unless they consider them to be “frivolous”.
If your dispute is valid, they will correct your report, but it could take some persistence on your part. After they receive your letter of dispute, it’s their responsibility to look into the matter.
Why do the Credit Bureaus Have to Investigate?
According to the Fair Credit Reporting Act (FCRA), section 611, “if the completeness or accuracy of any item of information contained in a consumer’s file at a consumer reporting agency is disputed by the consumer and the consumer notifies the agency directly, or indirectly through a reseller, of such dispute, the agency shall, free of charge, conduct a reasonable investigation to determine whether the disputed information is inaccurate and record the current status of the disputed information, or delete the item from the file in accordance with paragraph (5), before the end of the 30-day period beginning on the date on which the agency receives the notice of the dispute from the consumer or reseller”.
In other words, when you make a dispute, they must investigate it free of charge within 30 days or delete the item. If they don’t have proof of their validation, they have to fix the problem.
Understanding How Credit Bureaus Investigate Disputes
Knowing how the credit bureaus conduct their investigations or don’t conduct them, can make it easier to understand why it’s often difficult to get items removed. Even though you make an effort to dispute a matter, often the same effort won’t be made on their end. The reason is that most credit bureaus handle initial disputes using a computerized system that doesn’t necessarily correct the issue.
This system is known as e-OSCAR and it is used by all three major credit reporting companies to investigate disputes. It may resolve the problem in some cases, but it’s not guaranteed to provide a solution, nor is it considered sufficient, according to case law which has shown it to repeatedly propagate the same bad information.
Garbage In: Garbage Out
Problems with computerized investigations are twofold. On one hand, they rarely represent a reasonable investigation and can’t ensure the validity of given items when mistakes are propagated across multiple databases. On the other hand, when a weak debt validation comes back repeating the same bad information, and including more bad information of a different nature, the credit bureaus will often take this additional bad information and include it in your report, which only adds insult to injury.
The Way It Really Is
In an ideal world, credit bureaus would thoroughly investigate disputes, but in reality, they can’t be bothered and can’t easily be held accountable. Beyond using computer programs that often repeat bad information, their most common method of investigating disputes is to claim items are valid without investigating anything. Case by case, there’s no good way to confirm or deny what the credit reporting companies claim to be doing. Unfortunately, if persistence doesn’t fix the problem, the only solution is often filing a lawsuit against them.
What If a Credit Reporting Investigation Doesn’t Resolve My Dispute?
If your disputes are not resolved, it can mean several things. Either the original information providers who reported the item were able to prove its accuracy to the credit reporting companies, the information that was investigated was incomplete, the credit reporting companies have deemed your dispute “frivolous” and won’t pursue it, or the CRCs are being lazy and refusing to look into the matter. There are a few things you can still do.
Adding a Statement to Your Credit Reports
One step you can take in any of these cases is to request that a statement of your dispute be put into your future reports. This brief statement will show you contested entries even though they were not removed. Providing such a statement shows you disagree with the validity of the information. This might not be useful in many instances and won’t repair your credit, nor will it necessarily help you when you need better credit scores.
Most of the time such a statement will never be read by those who pull your credit because they are only interested in looking at the numbers representing your score. If you do choose to ask for such a statement, you can also ask the credit reporting companies to send the denial statement to everyone who recently received a copy of your report. Note: Some bureaus may request payment for this service.
Pursuing Disputes and Investigations Further
To pursue the matter further, it’s your right to request information on the method the credit bureau used to obtain their verification, as well as the details of said verification. More about this procedure can be found in section 611 of the Fair Credit Reporting Act (FCRA). But if the matter is unresolved, you can open a new dispute.
Part of the language in section 611 of the Fair Credit Reporting Act (FCRA) states:
(5) Treatment of Inaccurate or Unverifiable Information
(A) In general. If, after any reinvestigation under paragraph (1) of any information disputed by a consumer, an item of the information is found to be inaccurate or incomplete or cannot be verified, the consumer reporting agency shall–
(i) promptly delete that item of information from the file of the consumer, or modify that item of information, as appropriate, based on the results of the reinvestigation; and
(ii) promptly notify the provider of the information that the information has been modified or deleted from the file of the consumer.
Proof of Verification
According to the law, it is your right to receive proof of the verification, and if that proof is missing, to have the inaccurate entry deleted. If the debt validation is absent or unsatisfactory, you can dispute it again or file suit in court.
If you want to pursue the investigation further, use the phone number on your returned report or letter in which verification is claimed, or use another effective phone number that you found for reaching the credit bureaus. Call back and say you would like proof of the method of verification, and/or details about it.
If they ask you to open another dispute, agree to do so. If they need more information, use whatever information, or lack of information (names, numbers), you originally found when you sent your first letter of dispute. If they still refuse to offer proof of the method of verification, or details about it, inform them you will sue them for non-compliance under section 616 of the FCRA.
Seeking Legal Redress from Credit Bureaus
It is your right to seek a legal remedy when credit reporting companies won’t work with you according to the rules and guidelines established by law. When faced with a potential consumer lawsuit, the credit bureaus might find it easier to remove the information and fix your history, but you’ll need to have a good case.
You can let them know you will sue for non-compliance under section 616 of the FCRA. Or you might be able to sue for defamation. Let them know you’ve been talking to an attorney and that you know your rights. You might need to actually contact a lawyer to send an “intent to sue” letter. Finally, you can also file a complaint with the Federal Trade Commission.