Credit Dispute

A credit dispute is a consumer's notice to a consumer reporting agency that an item of information in the consumer's file is incomplete or inaccurate. The Fair Credit Reporting Act calls what that notice starts a reinvestigation. Under 15 USC 1681i(a)(1)(A), once a consumer disputes an item and notifies the agency directly, or indirectly through a reseller, the agency must free of charge conduct a reasonable reinvestigation to determine whether the information is inaccurate, record the item's current status, or delete it, "before the end of the 30-day period beginning on the date on which the agency receives the notice of the dispute".

Two different things are called disputes, and confusing them costs real rights. This page is about the accuracy of information in a credit file, which is federal consumer-reporting law. Challenging a charge on a credit card statement is a billing error under Regulation Z, aimed at the creditor rather than the bureau, with its own 60-day filing window and its own resolution deadlines. A third route exists as well, a dispute sent directly to the furnisher rather than to the bureau, which triggers duties on the furnisher under 15 USC 1681s-2 and is covered by the published material on credit bureaus.

The 30 days is a ceiling with one extension, and the extension has a counterintuitive limit. 1681i(a)(1)(B) lets the agency add "not more than 15 additional days" if it receives information from the consumer during the original 30-day period that is relevant to the reinvestigation. But (a)(1)(C) withdraws that extension for any reinvestigation in which, during those 30 days, the item is found to be inaccurate or incomplete or the agency determines it cannot be verified. Read together: sending in more evidence can buy the bureau extra time, while a finding that goes against the furnisher cannot.

A dispute made after a free annual report gets 45 days. 15 USC 1681j(a)(3) provides that "notwithstanding the time periods specified in section 1681i(a)(1)", a reinvestigation requested by a consumer after receiving a report under the free-disclosure subsection "shall be completed not later than 45 days after the date on which the request is received". This runs the opposite way to most people's instinct about statutory deadlines, so it is worth knowing which clock applies to your own dispute.

The furnisher is brought in within five business days, and not by you. Under (a)(2)(A), before the five-business-day period beginning on receipt expires, the agency must notify any person who provided an item in dispute, and that notice "shall include all relevant information regarding the dispute that the agency has received from the consumer or reseller". Anything you send afterwards has to be passed on promptly under (a)(2)(B), and (a)(4) obliges the agency to "review and consider all relevant information submitted by the consumer". So the material you supply is not merely filed.

Deletion is one of two outcomes, and modification is the other. (a)(5)(A) requires that where an item is found inaccurate or incomplete, or cannot be verified, the agency promptly delete it "or modify that item of information, as appropriate, based on the results of the reinvestigation", and promptly tell the furnisher what it did. A balance corrected downwards is a successful dispute even though nothing was removed.

Reinsertion is the mechanic almost nobody expects. A deleted item can come back. Under (a)(5)(B)(i) it "may not be reinserted in the file by the consumer reporting agency unless the person who furnishes the information certifies that the information is complete and accurate". If it is reinserted, (ii) requires written notice to you within five business days, and (iii) requires the agency to give you, within the same five business days, a statement that the item has been reinserted, the business name, address and where reasonably available the telephone number of any furnisher contacted, and notice of your right to add a statement to your file. (a)(5)(C) then requires reasonable procedures designed to prevent a deleted item reappearing at all.

A bureau can stop, and the standard for stopping is low. (a)(3)(A) allows an agency to terminate a reinvestigation if it "reasonably determines that the dispute by the consumer is frivolous or irrelevant, including by reason of a failure by a consumer to provide sufficient information to investigate the disputed information". The safeguard is procedural rather than substantive: under (B) and (C) the agency must notify you within five business days, give its reasons, and identify what information it would need. In practice that notice is the instruction manual for refiling.

What arrives at the end, including the hundred words. (a)(6)(A) requires written notice of the results within five business days of completion, and (a)(6)(B) requires that notice to carry a revised report, notice of your right to ask how the accuracy was determined, which under (a)(7) must then be supplied within 15 days, and notice of your right to add a statement. If the reinvestigation does not resolve the dispute, subsection (b) lets you file "a brief statement setting forth the nature of the dispute", which the agency may limit to 100 words if it helps you write a clear summary. Subsection (c) then requires every subsequent report containing the item to note that it is disputed and to carry your statement or an accurate summary of it, unless the agency has reasonable grounds to believe the statement is frivolous or irrelevant. Subsection (d) goes further: at your request, notice of a deletion or your statement must be sent to anyone you designate who received a report for employment purposes in the preceding two years, or for any other purpose in the preceding six months.

Three narrower routes worth knowing exist in the same section. (a)(8) creates an expedited path: if the agency simply deletes the item within three business days of the notice, it may skip the furnisher notice and the written results notice provided it telephones you promptly and confirms in writing within five business days. Subsection (f) makes a reseller exempt from reinvestigating, with a defined exception: within five business days it must decide whether the error is its own, correct or delete within 20 days if it is, and otherwise convey the dispute to each agency that supplied the data. And subsection (g) gives veterans a dedicated route for medical debt the Department of Veterans Affairs has assumed liability for, on which the agency must delete the information and notify both the furnisher and the veteran.

You tell the bureau which item is wrong and why, and supply what you have. The bureau notifies the furnisher, gathers the response, and either deletes, modifies or verifies the item. It then sends you written results and a fresh copy of your report. If the item survives and you still disagree, you can attach a short statement that travels with the item in later reports.

A hypothetical example, and the calendar is the substance. Priya's file shows a charged-off account she does not recognize. The bureau receives her dispute on Monday, March 2.

The furnisher notice comes first. The five-business-day period beginning that Monday runs March 2, 3, 4, 5 and 6, so the collection agency has to be notified by Friday, March 6.

The reinvestigation itself has the 30-day period beginning March 2, which ends on March 31, since March 2 through March 31 is 30 days. On March 20 Priya sends bank statements showing the account was paid. That is relevant information received inside the window, so the bureau may take up to 15 more days, to April 15.

Now change one fact. Suppose that by March 18 the bureau has already determined the item cannot be verified. The extension in (a)(1)(B) is withdrawn by (a)(1)(C) in exactly that circumstance, so the original March 31 deadline stands and the item has to come off. Either way, written results are due within five business days of the day the reinvestigation is completed.

Pros

• It is free by statute, in both the ordinary and the reseller route, and the deadlines are specific rather than "reasonable".
• The bureau brings the furnisher in for you within five business days, so one filing reaches both parties.
• An item that cannot be verified must be deleted or corrected, not merely annotated, which is a stronger remedy than a note on the file.
• Reinsertion requires the furnisher to certify accuracy and requires the bureau to tell you, with the furnisher's contact details.
• If the item survives, your hundred-word statement has to accompany it in later reports.
• Requesting your free annual report first lengthens the clock to 45 days rather than shortening it.

Cons

• The test is accuracy, not fairness. A correct late payment or a correct charge-off survives a dispute, and no amount of context changes that.
• The statute requires a "reasonable" reinvestigation without prescribing what it must consist of, so the depth of the review is not something you can specify.
• A bureau may terminate a dispute as frivolous or irrelevant on its own reasonable determination, and the remedy is to refile with more.
• Files are per bureau, so the same wrong item on two files is two disputes, even though a furnisher that finds an error has its own duty to tell the agencies it reported to.
• A deleted item can be reinserted on the furnisher's certification.
• Where the problem is identity theft rather than error, the ordinary dispute is the slower tool, because the statutory block works on a four-business-day deadline instead.