The function of the Credit Bureaus first began as collection agencies and they only gathered negative information. Then Fair Isaac & Company developed the FICO scoring system to improve the overall credit reporting system. Today, the bureaus report both positive and negative credit history to provide a risk-grade rating that estimates your credit worthiness.
The Fair Debt Reporting Act (FDRA) gives you the right to dispute erroneous, inaccurate and unverified items to have them removed from your credit history. Online credit report disputes are the least beneficial to consumers.
1. First, one factor you have on your side when disputing credit is time. The legal thirty to forty five day limit is not enough time for a credit bureau, creditor, or collection agency to properly investigate a dispute.
The Credit Reporting Agencies (CRA’s) online dispute system is set up in such a way that when you use it, it makes their job easier and more cost efficient. The information you put into their limited dispute fields falls right into their electronic verification system.
2. Second, and probably the most obvious is that you have no paper trail. Any attorney would advise you that much of credit repair is about good records and paper trails.
3. Third, the Fair Credit Reporting Act has a section for “Expedited Dispute Resolution” Section 611a(8) for the online dispute system which reads as follows…
” the agency shall not be required to comply with paragraphs 2, 6, and 7 with respect to that dispute if they delete the trade line within 3 days.”
Paragraph 2 requires the CRA to forward your dispute and all related documentation you provide to the creditor. They rarely forward the documentation.
Paragraph 6 requires the CRA to provide you with written results.
Paragraph 7 requires the CRA to provide you with the method of verification on request from the consumer.
Knowing this lets you know that the CRA can delete a disputed trade line for 30 days, then the trade line can reappear when the creditor reports it again in the next cycle. This is because the CRA is not required to tell the creditor you disputed it, thanks to paragraph 2 being omitted.
When you dispute your credit report online, you will lose this powerful tool, your rights to request the “Method of Verification” (MOV), in the dispute process thanks to paragraph 7 being omitted.
Another powerful tool is the five day written notice of re-insertion. Essentially, what that means is that if a credit bureau is going to re-insert a previously deleted item, they must inform you in writing five days prior to re-inserting it. You will rarely, if ever, see the CRA’s give this notice.
Now hold on to your hat, here is the twist to this; that five day notice is ONLY required if the credit bureau takes longer than 45 days to complete. IF and ONLY IF, it is deleted via the expedited system, often completed in three days, the five day written notice is no longer required.
DO NOT ever dispute your credit report errors online if you want them to be permanently removed. If you are going to dispute items on your credit report, do it in writing, and make sure you mail out your written credit report dispute by certified mail with a signed receipt.
Posted under credit bureaus, credit report, equifax, experian, fix bad credit, improve FICO score, improve credit report, transunion
This post was written by fixbadcredit
