Credit Bureau Disputes: The Basics
If an account on your credit report seems to be listed inaccurately, you have some powerful options to address the issue. Under the Fair Credit Reporting Act (known as the FCRA), you have the right to dispute the item with the credit bureaus where the account appears, and ask for the item to be corrected.
Within 5 days of receiving your dispute, the credit bureaus are required to forward your dispute to the data furnisher. This is the party which reported the inaccurate information to the credit bureaus.
A data furnisher could be a credit card issuer, student loan provider, mortgage lender, or auto financing company. Of course, debt buyers and debt collectors also qualify as data furnishers.
The data furnisher must then investigate the disputed item, and inform the credit bureaus as to what they have found out. The credit bureaus are supposed to write back to you (typically within 30 to 45 days of the initial dispute) and update you as to what the data furnisher told them.
However, the bureaus are not supposed to merely repeat what the data furnisher tells them. Rather, the credit bureaus must conduct a reasonable reinvestigation of their own.
This means they ought to conduct some research of their own, to figure out whether a piece of information is in fact reported properly. The credit bureaus are independent entities, and have an obligation to report information to credit bureaus accurately.
Credit Bureau Changes In Light of COVID-19
COVID-19 caused tremendous disruption to our way of life. Amongst the changes which occurred, was how credit bureau disputes are processed.
The Consumer Financial Protection Bureau, or CFPB, is the government agency which regulates the credit bureaus (amongst other entities). In April 2020, the CFPB announced that they were offering greater flexibility to the credit bureaus, in processing credit disputes. In it’s statement, the CFPB noted that “consumer benefit if lenders report accurate information” and that there were “resource constraints on lenders and credit bureaus due to the pandemic…”
For this reason, the CFPB announced that it would not “bring an enforcement action” if the credit bureaus took longer than usual to investigate credit disputes. The CFPB claimed that firms should be making “good faith efforts” to investigate disputes quickly.
The credit bureaus have used the CFPB’s statements to avoid doing their job. They’ve simply ignored countless consumer disputes. In other cases, consumers have waited 60 or 90 days or more, to have their disputes resolved.
Given the importance of credit scores, this is very damaging for consumers. What should you do if your credit bureau dispute does not recieve a response for 60 days or more?
Send Another Dispute
If you don’t recieve a response to your initial credit bureau dispute, within 45 days, you have several options. Perhaps the most effective thing you can do is submit another dispute.
All credit bureau disputes should be sent by certified mail. Therefore, if you sent your first dispute by certified mail, you’ll have a tracking number, which allows you to see when the mail was received.
You should print out proof of when the mail was recieved, and send this to the credit bureaus, along with your dispute. You should also point out that your initial dispute did not recieve a response. Warn that you’ll consider pursuing legal action, if this issue is not resolved.
Once you’ve sent this letter, you should wait for another 45 days, and see if you recieve a response. If not, proceed to the second step.
Contact A Consumer Credit Attorney
At this point, roughly 90 days have passed. You have disputed innacurate information with the credit bureaus twice, and not recieved any response.
The credit bureaus have not fulfilled their legal obligation to investigate your dispute. As a result, you’ve (possibly) been harmed.
At this point, you should speak with an attorney. The FCRA states that if the credit bureaus fail to perform a “reasonable reinvestigation”, and an error on your credit reports is not corrected, then you might have grounds for a lawsuit.
To succesfully sue the credit bureaus in this situation, you’ll need to demonstrate that the uncorrected credit report error somehow harms you. Lawyers can make a variety of arguments about how an item is damaging – so don’t worry too much about that.
The attorney you speak with will want to review each dispute letter you sent. They’ll also want to see your certified mailing receipts, along with any documentation you attached to the dispute letter.
If the attorney thinks that your dispute letter was not sufficiently clear, or did not include enough evidence, they might have you dispute the item again. Typically, the attorney will write a dispute letter, which you send out.
A Few Tips About Dispute Letters
When preparing dispute letters, there are a few simple rules you should follow. Doing this increases the chances that the error on your credit reports will be corrected.
First, make sure that you include your personal identifying information. This includes your full legal name, your Social Security Number, your date of birth, and your mailing address.
You will also want to provide proof of your identity. This includes a copy of your photo ID, a bill with your address, and either your paystub or Social Security Card. Credit bureaus are very particular about confirming your identity.
When detailing errors on your credit reports, you should refer to your official credit reports, as provided by Annual Credit Report. Annual Credit Report is by far the most complete source of information available to you, regarding your reports. You should save these reports as a PDF file, and keep them handy for reference.
Your letter should be written in plain English, and clearly state what you believe is incorrect on your credit report. Let’s say you were marked as having paid 30 days late on your credit card, in February 2020. However, you actually paid on time in February. You should say “I was marked as late in February 2020. I did not pay late.”
You should attach any proof to your dispute letter. For example, if you have a bank statement, showing that money was deducted for the February 2020 payment, you’ll want to attach that statement to your dispute.
The Final Word
When you have errors on your credit reports, and don’t recieve proper responses from the credit bureaus, it is natural to be frustrated. All too often, the credit bureaus ignore their legal responsibilities, and simply do as they wish.
Fortunately, you have options. You can prepare clear dispute letters, and explain what is wrong on your credit reports. If these dispute letters are not properly processed, you can submit a complaint, to the Consumer Financial Protection Bureau.
If that does not resolve the issue, you should seek legal counsel. Your credit is too important to leave to change – and thus, it is vital that your rights be protected. A consumer rights attorney can help you figure out if negative items on your credit reports require legal action – and protect your rights accordingly.
