Credit report error? How to fix it
If there's a mistake on your report, whom do you tell -- and how long will it be before it's corrected?
By far the most questions we receive from readers for our weekly credit Q&A series concern credit report disputes. And while we've previously covered the option of contesting information appearing on a credit report, we've never actually delved into what happens after a consumer has done so. That is, until now.
The infographic at the end of this post illustrates how a dispute is handled by the three major credit bureaus -- Equifax, TransUnion and Experian. As previously reported, the big three furnish varying reports to a vast majority of the nation’s lenders.
Under the Fair Credit Reporting Act, both the credit reporting company and the information provider (typically the lender or collections agency) are responsible for investigating and/or correcting inaccurate or incomplete information appearing on a person's credit report and are given 30 days to do so.
But careful observers will be quick to notice that, under current operating procedures, this investigation is handled by the lender, not the bureau who is being notified of the dispute.
"We go back on behalf of the consumer to the source to verify the records are being reported accurately," says Rod Griffin, director of public education for Experian. "They let us know if the information should be updated or removed." (Post continues below.)
The process, which Griffin says typically takes a week to 10 days to process instead of the 30 days permitted under federal law, seems an adequate way to address simple factual errors, like a misspelled name or incorrect Social Security number. But what happens when an issue is complex, or worse, when a dispute is related to difficult-to-prove factors such as whether a consumer owes the lender to begin with. (The second, incidentally, is what drives a majority of the questions we get on the subject.)
Griffin says that consumers can aid such cases by sending any documentation they may have showing that the information should be removed to the credit bureaus directly. He also says Experian tries to minimize the number of subjective disputes it encounters by making sure it deals only with reputable lenders. (And not just anyone can report information to the major credit bureaus.)
Disputing something on your credit report
Ultimately, however, "If you disagree with the lender’s response, you can add a statement of dispute to the report," Griffin says.
James B. Fishman, a New York attorney who specializes in consumer law, says a statement of dispute, also a provision of Fair Credit Reporting Act, can be up to 100 words and can say whatever a consumer would like it to (for example, that the bill was sent to the wrong address, the payments were for a service you never agreed to, etc.).
But consumer advocates say consumers need to be aware that adding a line to your credit report doesn't necessarily guarantee that a new lender will discharge the information when considering you for the loan.
Evan Hendricks, the author of "Credit Scores & Credit Reports," agrees that consumers can increase their chances of success by formally documenting the dispute via certified letters to both the credit bureaus and the lender in question.
Beyond that, "if you want to force the issue, you can file a lawsuit against the lender," Fishman says. "If you win, (the information) has to come off."
Hendricks says these types of cases can take months or years, depending on how complex the situation is. (As a point of reference, most negative information takes seven years to age off of your credit report if you do nothing to contest it.) He also says that lawyers aren't apt to take a case where clients have little to no documentation on hand to prove they don't owe a bill or that information is otherwise inaccurate.
However, Hendricks also says that those who do have documentation and are faced with a discrepancy that will do serious damage to their score for an extended period of time shouldn't shy away from legal action, especially since many experienced attorneys will arrange for their fees to be paid as part of a settlement or trial decision.
"If the situation is very serious, cut right to the chase and find a lawyer who specializes in FCRA to represent you," Hendricks says. He suggests visiting the National Association of Consumer Advocates' website to find one suited to dealing with these types of disputes.
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This all sounds great. I have however found it is not nearly this easy. First when you send in a dispute you would think that they actually check the info to make sure an account is your's. They dont. They use a computer which system which says yes or no. They dont check to see if your signature is on any contract or documentation or that you are even related to the account (I had an account on my credit for an apartment lease broken in a state I have never even visited). Second. The 30 days is a guideline not a law. As far as I know they can take as long as they like (I had one last 4 months before response). I worked on my credit for 2 years trying to get legitimate inaccuracies off. I can assure you it is easier to get a bill through congress. The credit reporting system is about as customer friendly as you local DMV.
I like it Giggles. It is an information business. Thats how they make their money. Every time a credit report is pulled for anything they get paid. It does seem the government wants to protect people but there is no teeth to enforce. This leaves the credit bureas to operate as they please. I mean what are you going to do? You may sue ,but for every one of you there will be 20 who dont. They will just wait you out.
It is unfortunate that articles like this perpetuate 3 myths: that a 100 word statement does anything at all for you, that the credit bureaus contact the original creditor when you dispute an item, and that you need to provide documentation to prove you do not own an account. The truth is that the credit bureaus use e-Oscar, a computer system that they setup so they can handle the numerous disputes automatically. A scanner reads your dispute (worse, if you dispute online, you enter it into the system yourself). No person reads your dispute and any documentation you send is not used. e-Oscar checks its database to see if the information on your credit report matches the information originally provided by the creditor. And, your FICO score is not helped by any statement.
Also, know your rights. It is not up to you to provide documentation that you do not own an account. What documentation can you provide if you don't own it? It is your right to demand verification from the original creditor or the collection agency. They have to prove you own the account, not the other way around. There are some great message boards that can help you. Google is your friend.
PS: Don't believe the propaganda that only reputable lenders can report your information to the credit bureau. There are some pretty disreputable collection agencies and junk debt buyers that report every day. Go the bureau sites and read their business services sales information. "Reputable" is anyone willing to pay them.
this article (or ad) is a waste of time. These three credit bureaus aren't nothing but dump boxes. They let any company or agency drop stuff in our profiles without questions. Obviously our ss# is out there for everyone to use and to manipulate. It seems every 4-5 years someone uses my ss# and gets away with it. I am tired of fighting trying to prove my innocence of bogus accounts in other states. The real enemy is the easy usage of other people's ss#. I don't have a lot of personal credit, but if you look at my reports, you would think I was living the good life. There is stil crap on my report dating back to 1988...just mind blowing!
I have reported to the three Bandito's (credit agencies') That my social security number had been stolen! They did nothing!!! I was living in another state (for my country!) and at the same time someone in another state applied to a dodge auto dealer! in the flesh! now how about my credit score being lowered because the perp' tried it multiple times' while all the while I was trying to get the three Amigo's to put a note on my file?. well It ruined my chances of buying a modest house! and left me out in the cold!. they never put the "stolen ID on file"
ten years' later they have done it again! I live in a camper , living on $700.00 a month! I do not apply for credit! but the credit companies' still rack up a list of unknown to me, points' against my credit worthiness!. They do not help in any way shape or form to find out who is ruining my credit score!. Most rich people live on credit, and poor people stay poor because the credit reporting agencies' are run by the RICH!. DAMN THEM!
THERE ARE 8% MORE MILLIONAIRES and TONS MORE POOR! The time has come for the working class to get a break. If you are tired of just making it by, then you need to do something about it. THERE ARE WAYS TO BREAK FREE FROM THE 9-5 LIFE. G00GLE the term ' FAST MARKET CASH ' all one term and click the first site. Go right to the 'PENNY' 'STOCK' page to see what the rich don't want you to know.TAKE CONTROL OF YOUR FINANCIAL WELL-BEING TODAY! Or you can just let the rich continue to dominate this country and steal your family's money.
report is pulled for anything they get paid. It does seem the government wants to protect people but there is no teeth to enforce. This leaves the credit bureas to operate as they please. I mean what are you going to do? You may sue ,but for every one of you there
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