5 Reasons Why Your Credit Report Has Errors?

When you review you credit report and find a mistake, you are advised to dispute it. You have to send a written application to both the credit bureau and the originating company that in turn has to investigate the dispute and correct it within 30 days. However, the incorrect item under dispute is rarely fixed and the data deleted. Given below are 5 reasons why these errors are not corrected, causing trouble to millions of consumers.

1. Automated system – The credit reporting agencies have an automated system that is coded at the time of initiating a dispute. This is then sent to the computer of the originating company that has to confirm it as correct. This should work in two ways. If the company responds and confirms your dispute, it will be corrected and if there is no response, then the disputed item will be removed. However, this seemingly efficient system does not work this way. The reason, as pointed out, lies in the fact that the CRA does not send supporting documents to the company as laid down under FCRA regulations. This is due to the CRA being short staffed and unable to handle the numerous complaints that are made every day.
2. Consumer v/s creditor – It is believed that it is your word against the creditor and therefore, the item is not corrected. However, since there is an automated system, there is no way in which anyone can take sides. The delay occurs due to the fact that the company does not agree to the fact that it has provided wrong information. Till there is some response, the item remains on the report.
3. Mixed reports – With so many consumers and reports, there are numerous instances where credit files get mixed up. The CRA does not follow any criteria to tally the data of consumer. This results in your file being mixed up with the file of another consumer with same or similar name causing delay in settlement of dispute.
4. No mistake – It is also possible that what appears to be a mistake is not so. Some of the disputes are regarding loans or bills that have been paid off but still appear on the report. According to the laws, some of the items have to be placed in the report for a certain period of time despite having been paid off. They have to be updated but sometimes, the updating is missed.
5. Fraud disputes – CRA has reported that one third of the disputes are filed by credit repair firms that challenge them without sufficient information thereby making the dispute unfavorable and are flagged as frauds. The FCRA rules in favor of the CRA in this case and such “frivolous” disputes are not investigated.

If you really wish to settle the dispute and ensure that it is corrected in your credit report, you must take proper steps. Contact the originating company with documentary evidence and the error will be corrected.