The Fair Credit Reporting Act (FCRA) gives American consumers the right to dispute any errors on their credit reports, and it charges the credit reporting agencies and the reporting entities with determining whether or not the errors are accurate. According to the FCRA, a company that is reporting negative information and the credit bureau are responsible for doing the investigations when consumers dispute an item or items on their credit reports. The credit bureau may be one of the major credit ratings agencies Experian, Equifax or TransUnion, and the reporting entity may be an individual, a company or an organization that report financial information about their clients. Consumers who need to dispute any items on their credit reports will need to contact both the credit bureau and the reporting company.
To begin the process, consumers will need to inform the reporting entity that what they are reporting is incorrect, and they must do this by writing a letter. Along with their letters explaining the situation, consumers will need to offer proof that what they are stating is true. They will want to do this by sending copies of their documents, never the originals. It's imperative that their letters contain their names and their address. They must also illuminate the specific items on their reports that are in dispute. The best way to do this is to circle or highlight the incorrect items on a copy of the report. They will need to explain why the item is incorrect and ask that the credit reporting agency take the steps necessary to remove or correct the item. A good example of a letter people can send will be found below. This letter must be sent by certified mail. When the dispute letter is sent in this manner, the consumer receives notice that the letter has been received by the credit reporting agency and on what date.
Once the credit reporting agency receives the dispute letter, it will investigate the claim within 30 days. Part of the agency's obligation will be to send the documentation the consumer provided them with to the company that is reporting the inaccurate information. It will then be the reporting entity's turn to act. The reporting company will need to examine the documentation and determine whether or not it agrees with the consumer's claims and inform the credit bureau of what it decides. In the event that the reporting company agrees that the information is not correct, the company must send notice to all three credit reporting agencies. These three major credit bureaus have the obligation to correct each report after receiving this notice.
The credit bureau's duties do not stop there. After they have corrected an item, they must send a newly corrected report to the consumers. They must also include a copy of any supporting documents in this package. All American consumers are entitled to one free credit report a year, but the corrected report they will receive will not be considered their one free report. Now that the credit bureaus have removed or corrected an item, they are barred from adding it to the consumer's report ever again. The only way they could do this legally is if the reporting company informs them later that the item actually was timely and accurate. If this were to occur, the consumer would be entitled to know the reporting entity's name, address and telephone number, and the credit bureau would be obligated to tell them in writing.
The consumer may have been subject to a credit check in the six months prior to the corrections. If this is the case, these consumers have the right to ask the credit bureaus to send these companies a copy of the corrected report. If a prospective employer performed a credit check in the past two years, consumers may ask that the corrected report be sent to these people.
The end result is not always as satisfying as the one described above. If the consumers are unable to have an item that they believe is incorrect removed or corrected, they can inform the credit bureaus that they would like to add a dispute statement to their files. This dispute will also be added to any reports that are requested in the future. If they do not mind paying a fee, they can also have this dispute statement sent to all people and organizations that asked for and received their credit reports in the recent past.
The consumers will also need to communicate with the company reporting the disputed information. They will do this by writing a letter similar to the one they sent to the credit bureau that will also have copies of the supporting documentation. Some companies provide an address meant only to accept dispute letters. Companies or individuals that are reporting to the credit bureaus must keep this dispute statement in these consumers' files. Once the item is determined to be inaccurate, the entity that has been reporting the incorrect information is not allowed to report it in the future.
Below consumers will find a sample of a dispute letter:
Reporting Entity's Dispute Department
Reporting Entity's Name
Reporting Entity's Address
To Whom It May Concern:
This letter is to inform you that I dispute some of the information that is on my report. I highlighted the items that I am disputing on the copy of the report that I included with this letter.
The item (clearly specify the name of the reporting entity, such as a lender, and label the type of item, such as a loan or a credit card account) is not correct or is not complete because (explain to the company exactly the reason the item is not correct or is incomplete). I ask that you delete this item (or whatever action they would like taken) to correct this error.
I have enclosed copies of (state that there are enclosed documents if it applies and describe the documents, such as a payment record) that reinforce my claim. Please investigate the items I illuminated and (remove or correct) these disputed entries promptly.
Sincerely, Consumer's Name
Enclosures: List the documents that were enclosed here.
Following are the mailing addresses for the three major credit bureaus:
TransUnion Consumer Solutions
P.O. Box 2000,
Equifax Information, LLC
P.O. Box 740256,
Experian: Consumers can obtain Experian's address by calling the toll-free number that can be found on their credit reports.