Your Credit Report: Your Legal Right #3
You Have the Right to Ask the Credit Bureau to Fix Mistakes
Start by ordering your 3 free credit reports, so you’ll be able to find out what mistakes are on your annual credit report.
If you find wrong or incomplete information on your report, the credit bureau is required by law to investigate the error and correct it if it’s wrong. If the bureau can’t verify the information with the lender that reported it, they must delete it from your file.
Most credit bureaus include a form you should fill out if you want to dispute information. If you don’t have one of the forms, you can simply write a letter. Be as specific as possible. For instance, don’t simply list: “Bloomingdale’s, Discover.” Instead, describe your dispute something like this:
Bloomingdale’s I paid this account off a year ago and closed it. Please update the file to show a zero balance and account closed by me.
Discover Acct #1010. I have never had a Discover Card. Please investigate.
You don’t have to be nasty in your original dispute. Remember, the people who are handling your complaint get hundreds of letters from irate consumers every week. Politely enlisting their aid may even score you a few points. (There’s plenty of time to get mad later if your report is not corrected.)
Be sure to list your name, address, Social Security number, and phone numbers (day and evening) in your dispute. Type or print if possible to make sure it is readable. Do not simply send in a marked-up copy of your credit report unless the credit bureau asks you to do so.
Return your form or letter by certified mail, return receipt requested, and keep a copy. Sending your letter by certified mail is usually worth the small expense and the inconvenience of going to the post office. If there is a problem later, you may want proof that the credit bureau received your letter.
You may also be able to file your dispute on-line, though my experience to date with this has been that the on-line forms don’t leave room for a lot of flexibility in describing the problem. That will probably change as the agencies gain more experience with on-line disputes.
Credit bureaus now have thirty days to investigate and correct information. If they cannot verify the information in that time period, they must delete it. If, in the meantime, you supply additional relevant information about your dispute, the bureau can have fifteen more days to investigate.
If you do not hear back from the credit bureau within thirty days, write again, enclosing a copy of your original letter of dispute. If the credit bureau again fails to respond, you may want to enlist the help of an attorney, or one of the federal agencies.
How Do Investigations Work? When you dispute wrong or outdated information with a credit bureau, the bureau must verify the information with the source that reported it or else delete it. In addition, the credit bureau must supply the lender with all relevant information you have provided about the dispute. If you have proof that the information is wrong, send a copy to the bureau. If you don’t have anything to show that the information is wrong and the lender continues to report it as wrong, you could have a tough time getting it removed from your file. After all, in the credit bureau’s view, you could be one of the thousands of people who are just trying to get some accurate but negative information taken off their files.
Sometimes a credit bureau will contact a lender to confirm if information is correct, and the creditor just never responds. Under the FCRA, if a credit bureau cannot verify disputed information, the agency has to drop it from your file. That doesn’t mean, however, that the agency can’t put the information back on at a later time if the creditor shows it’s correct.
Before reinserting disputed information that has already been deleted, however, the person supplying the data must certify that it is complete and accurate. Then the credit bureau must send the consumer a notice within five business days, stating that the information has been placed back in the file. The bureau must also include the name, address, and phone number of the company that supplied the information (as long as those details are “reasonably available”) and explain the consumer’s right to add a statement of dispute to the file.
In the past, if you found wrong information on your credit report with one of the three major agencies, you had to make sure you disputed it with the other two to make certain it didn’t show up somewhere else. That is supposed to be changing.
In 1995, the Associated Credit Bureaus (now called The Consumer Data Industry Association) developed the Automated Consumer Dispute Verification (ACDV) system, which automatically reports corrections to all major bureaus. For example, suppose you get your Trans Union report, and it shows that one of your gasoline card issuers is reporting you as being ninety days late on your payments last year, but you know you weren’t late at all. You write to Trans Union, tell them about the error and ask them to correct it. Instead of filling out a written consumer dispute form and mailing it to the card issuer as they used to, Trans Union sends a Consumer Dispute Verification Request via an automated system that works in a way similar to e-mail. The card issuer checks its files and finds out you’re right, you never were ninety days late on that account. So they respond via the same system to Trans Union and also to Equifax and Experian. That means the correction should be made at all three bureaus, not just the one you wrote to.
The advantages of the ACDV system are that it eliminates the mail time in the dispute process, so information can be verified in days, not weeks, and if the creditor makes a correction via the ACDV system, it’s automatically corrected with all three credit agencies, so you don’t have to dispute the same information again.
The drawback to the ACDV system is that it is voluntary. However, more and more creditors are participating. Still, if you find mistakes on your report, it’s vital you check your report with all three agencies to make sure they are corrected everywhere.
If wrong information was deleted from your report as a result of an investigation, you can ask the credit bureau to report the correction to any companies that saw your report in the past two years for employment purposes, or the past six months for any other purpose. They’ll do this only if you ask, and under the new law they can charge you for them, but no more than they would normally charge the recipient. (Since many credit grantors pay less than consumers do, it may well be less than the usual $9.)
Another major improvement in the credit reporting law is the section that holds those who supply information to credit bureaus responsible for correcting mistakes. Under the old FCRA, credit grantors were off the hook completely—even if they repeatedly reported wrong information. No more. The new law makes it illegal for anyone to report information to a credit bureau that it “knows or consciously avoids knowing” is inaccurate.
If a creditor is notified of a possible mistake, either through a credit bureau or directly by the consumer, it must investigate and, if necessary, correct the error within the same thirty-day time frame as credit bureaus (with an extra fifteen days for additional information supplied by the consumer). Furthermore, it must report the correction to all bureaus to which it originally supplied the information, as described above.
The fact that lenders, too, must investigate disputes raises the question, Should you contact the credit bureau or the creditor when you find a mistake? There is no correct answer. In many cases, you will find more than one error on your report when you review it. In that case, it makes sense to notify the bureau that supplied your report of all the mistakes and ask them to investigate each. If one (or more) is not resolved, you can request contact information for the creditor and go directly to them with your dispute.
If you are applying for a time-sensitive loan and you know the mistake is seriously impacting your credit, it probably makes sense to go directly to the creditor and try to get it straightened out as quickly as possible. And if you know that the creditor has mistaken information in its files and will simply confirm with the credit bureau that your information is correct if you dispute it that way, then go directly to the source.
When I found an erroneous late payment on my credit report in 2000, it took three months and finally a call to the public-relations department of the lender to get it corrected. It should not be that difficult, but it certainly can be.