Think Twice Before you Dispute an Error Online
We were recently consulting a couple that had previously disputed some items online directly on Credit Karma and the credit bureaus websites, and we thought it might make an interesting topic to share. We highly recommend you NEVER use their online dispute systems. It’s like the fox watching the hen house and we’ll explain why.
When a dispute is entered online, it goes into EDRP (Expedited Dispute Resolution Process). This sounds great until you read a little further into the FCRA (Fair Credit Reporting Act). It clearly states that if a dispute goes into EDRP then the bureaus do not have to comply with certain sections of the FCRA.
Did you hear that? They get to ignore the law!
The sections they don’t have to comply with are also quite handy in the credit repair process. One section is the “Method of Verification” section. If an item comes back as verified, they don’t have to tell you “HOW” it was verified. Another section is the “Re-Insertion Letter” section. Usually, if an item is deleted, there are steps the bureau must follow in order to be able to re-insert that item. One of these steps is to send you a re-insertion letter before placing the item back on your report. The simple cost of creating and sending this letter drastically limits the amount of re-inserted items. If an item is processed under EDRP, THIS LETTER IS NO LONGER REQUIRED! They can just put the item back whenever they get good and ready.
Just take our advice… Don’t dispute online. Never ever dispute an item online, no matter what you’ve heard, read or seen or who’s trying to convince you to do so! Particularly, free credit monitoring platforms like Credit Karma, Credit Sesame or the actual credit bureaus themselves encouraging you to do so.
One important factor you have on your side when disputing errors in your credit report is time. By law, the credit bureaus have 30 days within receipt of that dispute to properly investigate your claim. However, this only applies to reports other than one obtained for free at annualcreditreport.com. In that case, the credit bureaus have 45 days to respond. If you didn’t know this fact, you need to keep reading.
The Credit Bureaus online dispute system is set up in such a way that when you use it, it makes their job that much easier. The information you put into their limited dispute fields falls right into their electronic verification system. By using their online dispute system E‐OSCAR, you have no proof of the dispute or a paper trail that certified return receipt requested would give you if you had mailed that dispute. An important aspect of accelerating the credit recovery process is keeping meticulous records.
If you catch the credit bureaus in violation of the Fair Credit Reporting Act or a collection company in violation of the Fair Debt Collection Practices Act, you’ll have the necessary ammunition to beat them in court and clear your good name should you have to go that route.
When the Fair Credit Reporting Act was revised by FACTA, (Fair and Accurate Credit Transactions Act) they put in a section for “Expedited Dispute Resolution” Section 611a (8), also known as the on‐line dispute system. If you read this section, you will notice the following;
Well paragraph 2 is the part that requires the CRA (Credit Reporting Agency) to forward your dispute and all related documentation you provide to the creditor or company furnishing the information to the bureau. Paragraph 6 is the part that requires the CRA to provide you with written results of the re-investigation. And paragraph 7 is the part that requires the CRA to provide you with the method of verification on request by you, the consumer.
So as you can see, by using the CRA’S online disputing system (E‐OSCAR), which by the way stands for (Electronic Online System for Complete and Accurate Reporting), you wouldn’t receive a notice from the credit bureaus telling you that the information you disputed has been verified as accurate, which, by receiving this notice is what allows you to request the method of verification (MOV). The credit bureau then must provide you with this information within 15 days of your request.
As you can see, Method of Verification is another important tool to use and a very important part of accelerating the process of credit repair should you need to delete an item discovered to be in error, incomplete, or unverifiable during the “Credit Audit and Verification” process. So why would you give these rights up; voluntarily no less?
Additionally, the law is not specific enough and does not say “permanently delete or suppress”; herein lays the problem. The Credit Reporting Agencies (CRA) can “soft delete” a disputed trade line for 30 days and then the trade line can reappear when the furnisher (creditor or collector) reports it again in the next 30 day cycle. This is due to the fact that the CRA’s are not required to tell the creditor or collector that you disputed it at all, thanks to the “shall not be required to comply with paragraphs 2” if you decide to dispute an item online. Are you getting all of this?
This is a deceptive system in where we, the Inexperienced Consumer, think we may have succeeded in our dispute and gotten what is known as a “hard delete”, but in fact, it is only temporary. Since the creditor or furnisher of that information does not know the item was deleted, they will mistakenly re‐report it and then conveniently, the credit bureau will place the negative item back on your report. And if that isn’t bad enough, you lose the hard copy of the investigation results you would otherwise have received and been entitled to if the dispute had been done in writing and mailed certified in the first place.
Again, by disputing in writing, as the FTC states you should on their website, the bureaus might temporarily remove a negative item (soft delete) until the information is verified as true but…if the information is verified to be true, they must then notify you in writing within 5 days of putting the item back on your credit report. If they don’t, it’s a violation of the FCRA and you could potentially sue them for $1,000.
Listen To The FTC
Look, there’s a reason why the FTC states right there on its website that you should dispute EVERY item you think is not accurate, incomplete, or unverifiable on your credit in writing and by certified mail, “return receipt requested”; it’s because you are protected as a consumer and by disputing online electronically, you lose many rights under FCRA. So why would you ever do this? The answer for anyone reading this blog post should be; I will never dispute an item in my credit report online so repeat after me: Now I know better! At the end of the day, the moral of the story is; Gain knowledge, become confident, and become a better, more informed consumer moving forward.
What’s the best way to file a dispute?
If you see incorrect information on your credit report, it is possible to dispute it and have it permanently removed. To do this, send a written request for verification to the credit reporting agency and send it certified with a notice of receipt. This ensures you know the agency received your request and you have a paper trail with a date to begin the countdown for removal.
Make sure you send separate dispute letters to each agency that has the information even if it is the exact same. Not only are all of the credit reporting agencies separate entities, they do not share information with each other. Even if you have the data removed from one report, it may stay on the other reports until you submit another request.
Submitting an online dispute with a credit reporting agency may seem like the fast, easy way to get the results you want, but it may not work out in your favor.
It’s better to take longer to get the information removed permanently than to try to take a shortcut that won’t work over time. A temporary solution isn’t a real solution at all. It’s better to take a little longer for a permanent resolution that gives you the right results.
If you need help with your credit or need more information please visit us at www.creditindy.com or schedule your appointment today! InCredtable Advisors is Indianapolis’s only Licensed, Bonded & Insured full service credit consulting company. Let us help you improve your credit now by calling us at 317.202.1297