When you have inaccurate information on your credit report, it’s important to dispute it, especially if the negative information lowers your credit score.
It’s your responsibility and in your best interest to fix your credit history whenever you see a problem. There are legal steps you can take to resolve most issues.
Sometimes negative information can show up on your credit report that doesn’t belong to you. It could be from identity theft, or perhaps the credit bureau has mistaken you with a family member or someone else with a similar name as you. It’s even possible that they have the wrong address or Social Security number as well.
Duplicate accounts have also been known to appear, or older information improperly deleted from a database.
How to Dispute an Account on Your Credit Report
To resolve inaccuracies on your credit report, start by obtaining a free credit report from each of the three main credit reporting agencies, Equifax, Experian, and TransUnion, which can be obtained from AnnualCreditReport.com.
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If you recognize a mistake, it will help if you have any supporting documentation to prove the validity of your credit dispute to the credit reporting company. You can find more information about mailing credit dispute letters here. Make sure you always send the dispute letters via certified mail, return receipt requested.
Do the credit bureaus actually investigate disputes?
Yes, the three major credit bureaus are obligated by law to investigate credit report disputes. The question is how well they do it. According to the Fair Credit Reporting Act (FCRA), they are required to investigate your disputes unless they consider them to be “frivolous.”
If your dispute is valid, the credit bureau will correct your credit report, but it could take some persistence on your part. After receiving your dispute letter or online dispute, it’s their responsibility to look into the matter.
Why do they have to investigate?
According to the Fair Credit Reporting Act, 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 credit 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 submit a dispute request, they must investigate it within 30 days. If they cannot provide verification, they must remove the item from your credit report.
Understanding How Credit Bureaus Investigate Disputes
Knowing how they conduct their investigations can make it easier to understand why it’s often difficult to get credit report errors removed.
Even though you make an effort to correct a matter, the credit bureau often won’t make the same effort on their end. The reason is that most credit bureaus handle initial credit disputes using a computerized system that doesn’t necessarily resolve the issue.
It may resolve the issue in some cases, but it’s not guaranteed to provide a solution. It’s also not considered sufficient, according to case law, which has shown it to propagate the same bad account information repeatedly.
Problems with computerized investigations are twofold. On one hand, they rarely represent a reasonable investigation. They can’t ensure the validity of given items when mistakes are propagated across multiple databases.
On the other hand, sometimes the dispute 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 personal credit report, which only adds insult to injury.
How does the dispute process really work?
Ideally, the three credit bureaus would thoroughly investigate consumer disputes. However, in reality, they can’t be bothered and can’t easily be held accountable.
In addition to using computer programs that repeat negative information, the credit bureaus regularly claim that items are valid without investigating.
Case by case, there’s no good way to confirm or deny what they claim to be doing. So, unfortunately, if persistence doesn’t resolve the problem, the only solution is filing a lawsuit against them.
What if my credit report dispute is not resolved?
If a credit bureau doesn’t resolve your disputes, it can mean several things:
- The original information providers who reported the information have successfully demonstrated its accuracy to the credit reporting agencies
- The investigated information was insufficient
- The credit reporting agencies have considered your dispute to be “frivolous” and won’t investigate further
- The credit bureau is neglecting their responsibilities and declining to investigate the matter
Despite these challenges, there are still steps you can take.
Adding a Statement to Your Consumer Credit Reports
One step you can take in any of these cases is to request that a statement of your dispute be put into your future credit reports. This brief statement will show you contested entries even though the credit bureau did not remove them.
Providing such a statement shows you disagree with the validity of the information. The statement might not be useful in many instances. It also won’t repair your credit, nor will it necessarily help you when you need better credit scores.
Those who pull your credit report will often never read such a statement. They are only interested in looking at the numbers representing your credit score. However, if you do choose to ask for such a statement, you can also ask the credit bureau to send the denial statement to everyone who recently received a copy of your credit report.
Note: Some bureaus may request payment for this service.
Pursuing Disputes and Investigations Further
To pursue the matter further, it’s your right to request information on the method the credit bureau used to obtain their verification, as well as the details of said verification.
You can find more about this procedure in section 611 of the FCRA, which states:
(5) Treatment of Inaccurate or Unverifiable Information
(A) In general. If, after any reinvestigation under paragraph (1) of any information disputed by a consumer, an item of the information is found to be inaccurate or incomplete or cannot be verified, the consumer reporting agency shall–
(i) promptly delete that item of information from the file of the consumer, or modify that item of information, as appropriate, based on the results of the reinvestigation; and
(ii) promptly notify the provider of the information that the information has been modified or deleted from the file of the consumer.
Proof of Verification
According to the law, it is your right to receive proof of the verification, and if that proof is missing, to have the inaccurate entry deleted from your credit report. In addition, if there is no evidence or it’s unsatisfactory, you can rechallenge it or file a suit in court.
If you want to pursue the investigation further, use the phone number on your returned credit report or letter in which verification is claimed. Call the credit bureau and let them know you would like proof of the verification method and details about it.
If the credit bureau asks you to open another dispute, agree to do so. If they need additional information, use whatever information, or lack of information (names, numbers), you initially found when you sent your first letter of dispute.
If they still refuse to offer proof of the verification method or details about it, inform them you will sue them for non-compliance under section 616 of the FCRA.
Taking Legal Action Against the Credit Bureaus
It is your right to seek a legal remedy when they won’t work with you according to the rules and guidelines established by law.
When faced with a potential consumer lawsuit, the credit bureau might find it easier to remove the information from your credit report. However, you’ll need to have a good case.
You can let them know you will sue for non-compliance under section 616 of the FCRA. Or you might be able to sue for defamation. Let them know you’ve been talking to an attorney and that you know your rights.
You might need to contact a lawyer to send an “intent to sue” letter. Finally, you can also file a complaint with the Federal Trade Commission.
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