Disputing incorrect data is an important step in protection your credit rating.

According to a 2009 Report from the National Consumer Law Center there are errors in up to 37% of all consumer credit reports. The report further explores the tremendous difficulty consumers face in correcting these errors when it states that “50% of those were not able to correct the error”. In my experience working with individuals and families in Tallahassee I find these statistics very believable. Credit reporting errors often prove to be very challenging and frustrating problems for many people in our community.

Effectively disputing and ultimately resolving credit reporting errors requires careful documentation and navigation of complex federal laws regarding the responsibilities of both furnishers of information for the reports and the credit reporting bureaus. For the purposes of this article I am going to focus upon the process as it applies to the credit reporting bureaus rather than disputes directed to the actual creditor. In order to be effective it is very important that consumers properly dispute erroneous credit reporting information and keep detailed and accurate records of their efforts. All disputes should be submitted in writing, sent certified mail, with a copy retained by the consumer.

Credit Reporting Disputes Should be made in writing, sent certified mail with a copy kept in the consumer’s records.

When writing to a credit reporting bureau to request deletion or correction of erroneous credit reporting information it is necessary that a consumer provide sufficient identifying information and detailed information about the account and disputes so that the credit reporting bureau can conduct a reasonable investigation of the dispute. The following information at a minimum should be included in a letter notifying a credit reporting bureau of a dispute: Full legal name; date of birth; current address; addresses for the past 2 years; last 4 digits of social security number; name of account; specific nature of the dispute (i.e.: “this is not my account”).

A separate letter should be sent to each of the three major credit reporting bureaus that is currently reporting the erroneous information. You can write to the credit bureaus at the following addresses:

P.O. Box 740241
Atlanta, GA 30374-0241
P.O. Box 2002
Allen, Texas 75013
P.O. Box 1000
Chester, PA 19022

When a credit reporting bureau receives notice of a dispute their first response is to send an inquiry requesting review and verification of the debt by the furnisher of the credit information. If a furnisher of information responds by stating that the information is correct the account should be flagged as disputed, but the error will probably not be corrected or the account removed. However, according to the National Consumer Law Center report cited above corrections or deletion of incorrect data only happens in about 50% of cases.

When a credit reporting bureau refuses to correct or delete disputed data a consumer is not without recourse. The next step in the process is to again write to the credit-reporting bureau providing all the information suggested above, but this time also including a request that the credit reporting bureau conduct a “reasonable reinvestigation” in to the credit account. This request notice of dispute and request for reinvestigation triggers the requires of the Fair Credit Reporting Act (FCRA) which states:

“…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 reinvestigation to determine whether the disputed information is inaccurate and record the current status of the disputed information, or delete the item from the 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.” 15 U.S.C.A. § 1681i.

This is a very important step in the process. Failure of a credit reporting bureau to conduct a reasonable investigation within the 30-day time period can expose the Credit Reporting Bureau to liability under the FCRA. A Credit Reporting Bureau is also required by the FCRA to provide the consumer with the results of the investigation and, if the consumer then requests in writing, with a description of the reinvestigation process.

Quite often even requesting reinvestigation does not succeed in correcting or deleting incorrect information from a person’s credit report. When this happens the FCRA provides that a consumer can provide a short (generally under 100 words) written statement describing the dispute to be added to the credit report.

When a credit reporting bureaus fails to follow the procedures described above, or if an investigation is not reasonable for the given circumstance, a consumer may have the basis for a lawsuit under the FCRA. In such lawsuits the consumer must show that the credit reporting bureau willfully or negligently failed to follow the requirements of the law in handling the dispute from the consumer. The FCRA provides for the consumer to recover monetary damages based upon the failure of a Credit Reporting Bureau to follow the law. Additionally, a consumer can recover his or her costs and reasonable attorney fees.

The requirements of the FCRA are very complex and technical in nature. It is important that a consumer facing a dispute with a credit reporting bureau consult with an attorney early in the dispute process. Additionally, a lawyer should be consulted prior to filing for any claim under the FCRA due to the complexity of this area of law.