Under the law that governs the reporting of credit matters, the Fair Credit Reporting Act (“FCRA”), the credit reporting agencies (“CRA”), which are the businesses that gather and report on consumer’s credit information, there is the process to dispute inaccuracies.
You notify the CRA that information about your credit is incorrect (preferably in writing) and then the CRA must undertake what is referred to as a “reinvestigation” (the CRA contacting the furnisher of the information to determine if the reported credit information is, in fact, accurate). This process is as follows:
- The CRA communicates the dispute and “all relevant information” received from you to the furnisher within 5 business days of receiving the information. The requirement to communicate “all relevant information” is where most CRAs fail to abide by the FCRA in that the systems that are normally used turns your dispute (no matter how detailed or how many supporting documents are provided) into a two-digit code which it transmits to the furnishers (such as “02 disputes payment history”). This failure often leads to the information not being properly corrected (as the furnisher cannot determine from a two digit code the true nature of the issue) and also opens the CRA and possibly the furnisher to liability under the FCRA.
- The reinvestigation is to be completed within 30 days (or up to 45 days if you send additional information to the CRA during the initial 30 day period).
- The reinvestigation is to be “reasonable” under the FCRA, which is again where the CRAs usually fall short of the law’s requirements. Traditionally, the CRAs’ position have been that simply forwarding your dispute to the furnishers of the information is enough and they can report the credit information if that furnisher “verifies” it. This is not correct under the FCRA, however, as the law requires the CRA to conduct an independent investigation of the information rather than just forward along what they receive from you.
If the furnisher reports that the information is not correct, the CRA is to remove the information from the consumer’s file. The CRA is also to remove the information if the information “cannot be verified.” Unfortunately, often times unless it is clear that the information is not accurate (such as reported as such by the furnisher) the information remains in your file in contravention of the FCRA.