In the early 70’s the Fair Credit Reporting Act (hereafter “FCRA”) was enacted as a way to set guidelines regarding credit reporting industry practices, procedures and consumer protections.
That Act has evolved over time, and thanks to multiple amendments the current version gives consumers a variety of options when it comes to challenging information on their credit reports.
Those options are:
The Most Common Method – Direct to Credit Bureau
By far the most common way consumers challenge information on their credit report is by filing a dispute directly with one or more of the national credit reporting agencies; Equifax, Experian and TransUnion.
You can file a direct-to-bureau dispute via the credit bureaus’ websites, a letter or over the telephone.
When the credit bureaus receive your communication they are obligated by the FCRA to show the offensive item as being “in dispute.” They are also obligated to contact the furnishing party, normally a bank or collection agency, and verify the accuracy of the information in dispute.
This process cannot take longer than 30 to 45 days and if the mistake is on all three of your credit reports then you have to repeat this process–times three.
The form sent by the credit bureaus to banks and collection agencies is called an “ACDV”, or automated consumer dispute verification form. This form is normally sent electronically via a system called e-OSCAR.
The Not So Common Method – Direct to Furnisher
It’s not a huge secret but consumers are also allowed to file disputes directly with the party that furnished the allegedly incorrect information to the credit bureaus.
So, instead of trying to reach someone with the credit reporting agencies all you have to do is call your bank or the collection agency and let them know you are disputing the credit reporting of some item and you want it corrected.
When you file your dispute direct-to-furnisher, they are also obligated to communicate to the credit bureaus, all of them, that you are challenging the item and the alleged mistake is properly noted as being “in dispute.”
The furnisher also has the same obligation to perform an investigation. If they determine that the item is in fact incorrect, a correction must be sent to all three of the credit reporting agencies.
This process is called “carbon copy.”
The form sent by the banks and collection agencies to correct their credit reporting is called a “UDF”, or universal data form. This form is also normally sent electronically via the e-OSCAR system.
The New Kid on The Block – Via the CFPB
Last year, the newly formed Consumer Financial Protection Bureau rolled out a credit reporting agency complaint database. You can find it here.
If you’ve already filed a dispute directly with the credit bureaus, you can file a concurrent dispute via the CFPB’s credit report complaint database.
When you file a dispute with the CFPB you’re essentially “connecting” it to your dispute with the credit bureaus. You’re asked to provide extensive identification information (they find you) and exactly what you’re disputing and what outcome you believe is reasonable.
I’ve spoken with consumers who have used the CFPB credit reporting dispute process and the feedback is overwhelmingly positive.
John Ulzheimer is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a contributor for the National Foundation for Credit Counseling. He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry. The opinions expressed in his articles are his and not of Mint.com or Intuit. Follow John on Twitter.