My frustration with disputes people make to credit reporting agencies
I have been suing credit bureaus and furnishers (companies that provide your information to credit reporting agencies) for about 20 years.
During these twenty years, I encounter a frustrating mistake which is made far too often.
I want to share this frustration with you so that you can avoid the same mistake.
Here’s the situation:
I am contacted by a credit repair place, the client of a credit repair place, or just a consumer. They say they have an absolute error on their credit report and they want me to sue because it cost them a loan, a house, a security clearance, etc.
So, I ask them what the error is.
They paid off debt in January 2019 and the account still showed a balance for every month until September 2019. Then in September, the report showed a zero balance.
I ask for proof that they paid off the debt in January. They show me the letter from the company thanking them for paying off the debt in January.
We verify that every month through September shows a balance.
They say they have disputed that they owed a balance.
I ask to see the dispute that was sent to the credit reporting agency.
Usually, at this point in the conversation, we start to see some reluctance.
“Why do you need to see the dispute? I told you I disputed it, it is false, and it’s on my credit report and it’s hurting me.”
This isn’t an answer. I continue to ask until they give me the dispute.
The dispute identifies who they are, it identifies the account, it requests investigation, and it says the reason that the account was in error is that “I was never late.”
So I ask, “were you late?”
“Well… yes. But then I paid it off in January 2019. And February through September I still showed a balance.”
“Why did you say that the reason this was inaccurate was that you were never late? Why didn’t you just tell them that the payoff date was wrong?”
They will say, “Well, I hired a credit repair place and they said it’s better to not give the real reason.”
“I don’t know, I told the credit repair place what happened and they sent out four different letters with different reasons listed. So I have disputed four times and now, it’s not fixed, and I want punitive damages.”
“You aren’t getting any damages because you did not tell the credit reporting agencies what was wrong.“
Occasionally, a client comes to me having found an error and identified the specific error in your dispute to the debt collector, but they still had not fixed the error. Everything is in order and ready to file a suit immediately.
However, there are many times throughout the year where the person has identified the error in their own mind but did not tell the credit reporting agency. Now we have to start with a new dispute because it is as if they have done no disputes.
People get upset with this because they feel the credit bureau has ruined their life. But they never actually told the credit bureau what the problem was in the first place.
For some reason, this seems to be a foreign concept.
I have even been told by credit repair people who help hundreds or thousands of people a year that they didn’t know they should tell the credit reporting bureaus the actual problem.
A lot of the credit repair businesses use credit monitoring software where you put in your client’s login information, and it imports in their credit reports from the three major bureaus.
It will combine these reports and compare them to show discrepancies. For instance, Equifax says you paid off debt in February 2019 but Transunion says September 2019.
The software identifies the error and highlights contradictions in red.
It’s simple. You know exactly what the problem is. Then you get the proof to show that the information that is being reported is wrong.
But then we look at the dispute letter and it has nothing to do with the error that was found.
Why generate this fabulous report and not use it?
To be very clear, if you have an error on your credit report, you must dispute and identify the error.
Be specific with what the error is.
- If there are late payments on your report but you were never late, then your dispute should be that you were never late. Since the error was that you were never late, don’t say, “it’s not my account.”
- If the balance is wrong – you owe $500 but they say you owe $5500, say that the balance is wrong. Don’t say “I was never late.”
- Incorrect date of last payment? Say that.
The law is favorable to the credit bureaus in this way – if you do not specifically identify the error, they have no obligation to fix the error.
The judge will even agree that it was wrong, but since you didn’t specify the error, the credit reporting agencies will not be held liable for the error.
Some people want to go in the opposite direction and decide to dispute every negative item and request an investigation of every single one.
If there are 27 items on an account and 26 are right, don’t say they are all wrong. This will cause you to lose credibility and the judge will throw the case out.
You need to specify exactly what is wrong, not just cast a net to see if they catch something.
You need to make your dispute in a way that leaves only two possibilities:
- They fix the error and everything is great.
- They don’t fix the error and you sue them.
This is a slightly different approach than how credit repair companies handle things. Credit repair companies are not concerned with suing. They want to overwhelm the credit bureaus.
Some dishonest credit repair businesses want to drag the whole process out because they are being paid monthly. This often results in bogus disputes.
Just put in the actual error in your notice to the credit bureau.
They will notify the furnisher of the error you specified. If they fix it, great. If not, then you can go to a lawyer and sue them for it.
Pull your credit report.
Figure out the errors.
Notify the credit bureau (preferably by certified mail) of the account and the specific error so they have no excuse when they do not fix it.
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