If you feel like you’re flying blind trying to navigate the frustrating world of credit reports, credit disputes and credit bureaus, you are certainly not alone. Problems with credit reports are among the top complaints made to the Consumer Financial Protection Bureau (CFPB).
We’re shining a light on the challenges that errors on your credit reports may cause – and the dispute legislation designed to protect you.
The Fair Credit Reporting Act is a federal law detailing how your credit information can be collected, shared and used. One primary focus is ensuring the accuracy of your credit data compiled by the three main credit reporting bureaus: TransUnion®, Equifax® and Experian®.
As a consumer trying to ensure you have a correct credit file, it is important to know your rights:
YOU HAVE THE RIGHT TO ACCURATE REPORTING.
Reporting errors are more common than you may think. Your credit report is only as accurate as the information provided by your creditors to TransUnion, Equifax and Experian. According to the Federal Trade Commission:
- 1 in 5 people have an error on their credit reports that can lower their credit scores.
- 20 percent of consumers who disputed errors on their credit reports saw their scores increase.
YOU HAVE THE RIGHT TO FILE A DISPUTE.
Errors on your credit reports can damage your credit scores. If you discover inaccurate information on your credit reports, the credit bureaus have a responsibility to remove it.
- TransUnion, Equifax and Experian are required by law to respond to your dispute within 30 days.
- If you request it, each bureau must send a notice of correction to those who received your report in the past six months – or during the past two years for employment purposes.
- If you are not able to clear up the matter, you have the right to add a statement to your credit file explaining the situation.
YOU HAVE THE RIGHT TO HAVE OUTDATED INFORMATION REMOVED.
Negative information on your credit reports does have a shelf life. By law, credit bureaus are only allowed to list negative items for a certain amount of time.
- Collections, paid tax liens and Chapter 13 bankruptcies can only remain on your reports for 7 years.
- Chapter 7 bankruptcies and unpaid tax liens can stay on your reports for 10 years.
YOU HAVE THE RIGHT TO KNOW THE OUTCOME.
Once a dispute investigation is complete, the bureaus must provide you a standardized notice
- Actions that were taken because of the dispute
- Contact information for the data furnisher(s) involved in the dispute
- Results of the dispute investigation
- Options available if you are unsatisfied with the results, i.e. the right to re-dispute with supporting documents
NATIONWIDE POLICY CHANGES THAT BENEFIT CONSUMERS.
Fully-implemented in 2018, these policy changes help make the dispute process better for consumers:
- Dispute Procedure Change: When a consumer submits a dispute with supporting documentation and the creditor or collector verifies the account without making changes, the bureau must review the documentation and make changes if warranted.
- Escalated Disputes: The credit bureaus must implement processes to escalate special disputes (i.e. identity theft, mixed files, etc.). The bureaus are prohibited from instituting any policy that discourages the escalation of these special disputes.
- Refusing Disputes: The credit bureaus can no longer refuse a consumer’s dispute simply because the consumer does not have a copy of their recent credit report. And the bureaus are prohibited from misleading consumers to think that a recent credit report is required to submit a dispute.
- Rejecting Multiple Disputes: The credit bureaus no longer systematically reject disputes filed within three years of each other. However, there are exceptions. If the dispute comes through a credit repair company using an illegal tactic known as “jamming,” it will be rejected. And it’s worth noting that in some cases, you may be required to provide supporting documentation to submit the second dispute.
CHECKING YOUR OWN CREDIT WON’T HURT YOUR SCORES!
The cost of leaving your credit unattended is simply too high. Actively monitoring your information can help you catch errors or suspicious activity that may pose a threat to your credit and identity.
- Review your credit reports for changes when you sit down to pay your bills each month.
- Update your credit scores once a month to see where you stand with all three credit bureaus.
- If you’re already signed up for monitoring services, pay attention to every alert you receive!