3 Reasons You Should Never Dispute Your Credit Online

Real Estate Broker/Owner with Harriman Real Estate, LLC (203) 672-4499 REB 0788845

Have you ever had to dispute something on your credit report and done it online? Were you successful, or did it come back to haunt you? Here's some great info from Ron Cooks on why you should take that dispute off-line and submit the old fashioned way, in writing and by certified mail!

Original content by Ron Cooks TX# 584631

Historically, the function of Credit Bureaus first began as collection agencies and they only gathered negative information. Then, Fair Isaac & Company developed the FICO scoring system to improve the credit reporting system. Today, the credit rating-system uses both positive and negative information of consumers’ payment histories to provide a risk-grade rating that estimates your credit worthiness.

I was recently consulting a couple that had previously disputed some items online directly on the credit bureaus websites, and I thought it might make an interesting topic to share. I highly recommend you NEVER use their online dispute systems. It's like the fox watching the hen house and I'll explain why.

Fox with HenReason #1: As most of you know, one factor you have on your side when disputing credit is time. The legal thirty-day limit is not a lot time for a credit bureau, creditor, or collection agency to properly investigate a dispute. The Credit Bureaus online dispute system is set up in such a way that when you use it, it makes their job not only that much easier but cost efficient. The information you put into their limited dispute fields falls right into their electronic verification system.

Reason #2: This one is probably the most obvious. You have no proof or paper trail.  Any attorney would advise you that much of credit repair is about good records and paper trails.

Reason #3: When the Fair Credit Reporting Act was amended, they put in a section for "Expedited Dispute Resolution" Section 611a(8) the on-line dispute system. It reads as follows…

"…the agency shall not be required to comply with paragraphs 2, 6 and 7 with respect to that dispute if they delete the tradeline within 3 days.”

Paragraph 2 requires the CRA to forward your dispute and all related documentation you provide to the furnisher. They rarely forward the documentation.

Paragraph 6 requires the CRA to provide you with written results of the investigation.

Paragraph 7 requires the CRA to provide you with the method of verification on request from the consumer.

What they are doing is…

The Credit Reporting Agency (CRA) can delete a disputed trade line for 30 days, then, the trade line can reappear when the furnisher (creditor or collector) reports it again in the next cycle. That is because the CRA is not required to tell the furnisher you disputed it thanks to section 2 being omitted.  This is sometimes called a “soft delete” and it is not permanent.

Furthermore, you lose your rights to request "Method of Verification" (MOV) so you lose this powerful tool in the dispute process thanks to Paragraph 7 being omitted.

Finally, another powerful tool we use often is the five-day written notice of re-insertion.  Essentially, what that means is that if a credit bureau is going to re-insert a previously deleted item, they must inform you in writing five days prior to re-inserting it. I have rarely ever seen them give that notice.

That five-day notice is only required if the credit bureau takes longer then 45 days to complete. IF it is deleted via the expedited system, often completed in three days, the five-day written notice is no longer required.

In Summary, never dispute errors online if you want them permanently removed.  If you are going to dispute items on your credit report, do it in writing, and do it by certified mail with a signed receipt. 

Comments (2)

George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Pat and Wayne I just finish reading Ron's post before coming here.  He give excellent advice in this blog to those in need of disputing a credit issue.

Feb 10, 2012 01:35 PM
Kasey & John Boles
Jon Gosche Real Estate, LLC - BoiseMeridianRealEstate.com - Boise, ID
Boise & Meridian, ID Ada/Canyon/Gem/Boise Counties

I've never had to do this before, thankfully, but it is good advice - always, always have a papertrail. -Kasey

Feb 12, 2012 05:09 PM