How Credit Bureaus Investigate Disputes

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.

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.

I’m From the Government and I’m Here to Help

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.