What is e-OSCAR and How Does It Work?

Credit

If you have the time or the interest to learn about the world of credit reporting, you’ll find that the industry is full of jargon and acronyms. You may not understand what many of these terms mean, but each one has an important impact on your credit score.

writing a letter

One acronym you’ll want to familiarize yourself with is e-OSCAR. Because if you need to dispute a claim on your credit report, e-OSCAR is the system you’ll go through.

What is e-OSCAR?

e-OSCAR is an acronym that stands for “Online Solution for Complete and Accurate Reporting.” It is an automated credit dispute system created, owned, and operated by Equifax, Experian, Innovis, and TransUnion.

A study by the Federal Trade Commission (FTC) found that one in five consumers have an error on their credit report. And many of these errors have the power to negatively impact a consumer’s credit score.

Every time someone discovers an error on their credit report, they have to dispute it with the credit bureaus. Managing and correcting these errors took up a significant amount of manpower, so e-OSCAR was created to combat this problem.

How does e-OSCAR work?

If you need to dispute an item on your credit report, you can do so by phone, mail, or online. But most credit reporting agencies prefer that consumers submit an official dispute letter.

Once the agency receives your dispute, they enter it into the e-OSCAR system. When your dispute is in the system, it’s converted into a three-digit code.

These three-digit codes all mean different things depending on your situation. For instance, code 001 states that the debt isn’t yours and code 002 means that the debt belongs to someone else with a similar name. These are important distinctions that help the agency classify the debt.

There are 29 different three-digit codes e-OSCAR representatives can choose from. In addition to the code, the agency may also include a brief description of the dispute.

Once e-OSCAR receives the data, a formal credit dispute is created. The information is then sent to the data furnishers via an Automated Consumer Dispute Verification (ACDV) form who supply the credit bureaus with your information.

What are the downsides of e-OSCAR?

Because of the sheer volume of credit disputes, the e-OSCAR system is an easier way for the credit bureaus to navigate these requests. However, there are certain downsides.

When you send a dispute letter to the credit reporting agency, you likely included additional documentation to back up your case. But e-OSCAR doesn’t always allow credit bureaus to acknowledge the complexity of these cases.

With the e-OSCAR system, these disputes are watered down to a three-digit code. And it’s entirely at the agent’s discretion to determine which three-digit code is applicable to your case.

And in the past, when the code was sent to the data furnishers, the supporting documents were not always submitted as well. This is problematic, since the documentation is often crucial to proving your case.

This is why in 2012, the Consumer Financial Protection Bureau (CFPB) submitted a report reviewing the e-OSCAR system. The system has since been upgraded to ensure that dispute documentation can be sent to data furnishers.

And the CFPB continues to work with the credit reporting agencies to improve this process for consumers.

Bottom Line

e-OSCAR is the system the credit bureaus use to manage dispute claims from consumers. The system isn’t perfect and there are still ways it can be improved.

And this is why the CFPB continues to work with the credit reporting agencies to find new solutions that benefit the consumer. If you have to dispute an item on your credit report, make sure you do your due diligence and work with a professional if necessary.

Jamie Johnson
Meet the author

Jamie Johnson is a freelance writer who has been featured in publications like InvestorPlace and GOBankingRates. She writes about a variety of personal finance topics including student loans, credit cards, investing, building credit, and more.