How Broken is the Credit Report Dispute Process?
The Fair Credit Reporting Act (FCRA) gives you the right to an accurate credit report - one that's completely free of errors. But, many consumers find themselves unable to correct some huge mistakes. Like Ken Clark, mentioned in a recent SmartMoney.com article, who was able to buy a new car because his credit report said he was dead. Or Martha Soto who couldn't get a mortgage because Experian said she was the defendant in an unpaid court judgment. She was actually the plaintiff (the one who sued), but Experian didn't see it that way.
We're supposed to be able to remove credit report errors through a dispute process, but getting erroneous information off your credit report isn't as seamless as the law would have them to be. When you submit a credit report dispute, the credit bureau conducts an "investigation" in which they ask the creditor to verify the disputed information. Mind you, this is the same creditor who reported inaccurate information in the first place. If the creditor has incorrect information in its system, then the same incorrect information will come back as verified and it will stay on your credit report. In a situation like that, it might make more sense to dispute the account directly with the creditor, but they have no legal obligation to work with you on credit report errors. So what the creditor says pretty much goes.
Then, consider the system is largely automated, outsourced to offshore third-parties, and extremely rushed, and it's no wonder that many consumers are fighting a losing battle when it comes to protecting your credit-name.
Some credit repair companies claim to be able to get negative information removed from your credit report, but they're part of the reason that credit bureaus don't just take your word for it. "Credit bureaus say they usually need to check with the lender because 30 percent of disputes are filed by shady credit-repair companies that challenge all the negative information on a consumer’s report, regardless of its validity."
If you're unable to get results from the credit bureau, you can take it a step higher to the Federal Trade Commission (FTC), the government agency that enforces the FCRA. The FTC will do its own investigation to ensure the most accurate information is correct.
Source: SmartMoney.com via CreditMattersBlog
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Comments
Hi miss Irby, I’ve been reading your post and there is a couple of points that I’d like to comment.
First the situation was in the past as you describe it but the congress passed a law in 2003 called the Fair And Accurate Credit Transactions Act, after that law was passed creditors have to work with the consumers on credit reporting issues.
Second the credit repair works for two reasons, first the Fair Credit Reporting Act states that for a piece of information to stay in a credit report it must be timely (Can’t be reported for more than 7 an a half years), It must be accurate and it must be verifiable, this means the furnisher must have records to back up the reporting.
The fact is most banks get rid of delinquent records as soon as the regulation Z allow them, this is 18 months, keeping records cost money and they sold the accounts to third party collector anyway but hey want to keep reporting, they can’t have it in both ways, if a consumer challenges the accuracy of the info and since have no records they must delete regardless of its true nature.
Third, You can try sending complaints to the FTC, the only thing you get back is a form letter with information about your rights and where to send the complaint. The way to go is complaining to the Better Business Bureau, The attorney general of your State or the Comptroller of the Currency is you complaint is about a national bank.
Carl Bennet
Carl, thanks for your comment. I checked the FACTA and you’re right, it did amend the FCRA to require creditors to work with consumers on credit report disputes. That’s great news for consumers!
I’ll probably never recommend credit repair agencies because consumers can submit their own credit disputes for free – inaccurate, unverifiable, or otherwise. I haven’t been convinced that they’re a beneficial service to consumers.
Did you see the report released from the FTC at the end of last year? The report says the FTC actually follows up on credit bureau complaints it receives and the majority of them end up resolved in the consumers favor. But, I also agree on complaining to the other three agencies when the dispute doesn’t turn out correctly. I have a list of places to complain about credit businesses that have a few other agencies for credit unions and savings and loans.
I don’t know what you guys are talking about because a credit repair agency saved me more than once.
How do I get that address off of my credit report? I called to ask the Trans Union a question regarding that and I wasn’t even able to verify the address on my credit report because I don’t know what address that is… I was able to verify my current address but since I didn’t know that the representative wouldn’t help me. identity theft lawyers always ready to help their clients.