Did you know that you do not have to simply put up with errors and inaccuracies when they appear on your credit reports? If so, congratulations. You are already better informed than the vast majority of consumers. Thanks to the Fair Credit Reporting Act (FCRA) you have the right to dispute suspected credit report errors directly with the credit reporting agencies (CRAs) Equifax, TransUnion, and Experian. Disputes can be submitted on your own or with the help of a reputable credit professional.

When you file a credit report dispute with one of the credit reporting agencies you are entitled to a "reasonable investigation" of your dispute according to the Fair Credit Reporting Act. There is a detailed process which will begin to go on behind the scenes as your dispute is processed, however many people (including myself) believe that the current dispute process is not reasonable whatsoever and is created to highly favor the CRAs themselves. Take is a look at how that process actually works and see for yourself whether or not you would define it as "reasonable."

Phase 1 - Submit Your Dispute.

The dispute process begins when you submit a notice to one of the CRAs informing them that you disagree with an item on your credit report. Credit report disputes can be submitted online, via mail, over the phone, and even via fax.

Phase 2 - Credit Bureau Notifies Data Furnisher.

Once a CRA receives your dispute it is up to that CRA to inform the data furnisher (i.e. your creditor or collection agency) that you are challenging the validity of the account. To begin the CRA will fill out a form known as an ACDV (Automated Credit Dispute Verification) which will compress your eloquently worded dispute down into a simple 3 digit code. Even if you write a 3 page letter detailing the reasons why an account on your credit report is incorrect your detailed explanation will be compressed down to 1 of 26 available dispute codes such as "001" which would be translated as "not his/not hers." The ACDV form will be transmitted electronically to the data furnisher by means of a cloud based software system, known as e-OSCAR (Online Solution for Complete and Accurate Reporting).

Does leaving out the details of your dispute in exchange for a generic code sound like a reasonable process so far? Unless you work for a CRA or data furnisher you almost certainly just answered that question with a resounding "no way!" Unfortunately, it gets even worse.

Phase 3 - Data Furnisher "Investigates."

The "investigation" of your dispute officially begins once a data furnisher has received a notice of your dispute (in the form of an ACDV) via e-OSCAR. As mentioned above the FCRA states that a "reasonable investigation" should be conducted whenever you dispute an item on your credit report. However, what actually occurs during the investigation phase of a credit dispute is generally very far removed from what anyone would define as reasonable.

In theory a data furnisher should - at the very least - check their records whenever a dispute is received and verify that the information being reported to the credit bureaus matches up with their records. (In reality a true investigation should be much more thorough.) However, the e-OSCAR system provides a systematized method for violating your rights under the FCRA. Via e-OSCAR data furnishers actually have the capability to respond to a large number of disputes in an automated electronic format. In fact, data furnishers are even allowed to set up automatic responses to disputes before they are even received or reviewed. 

Phase 4 - Credit Bureau Receives Response.

Once a data furnisher has completed their "investigation" the CRAs are notified of the result of said investigation electronically. Remember, some data furnishers have automatic responses which are pre-populated and potentially sent to the CRAs without the necessity of an actual human even reviewing the dispute. Based upon the response for the data furnisher, and that response alone, the CRA will either modify, delete, or leave the reported item in its original state if the account was verified as being reported accurately. Additionally, if a data furnisher completely fails to respond to your dispute then the item would be deleted from your credit report as well.

Phase 5 - Receive Your Results.

Once the CRA has made any required changes to your credit report (if applicable) a letter will be mailed to you containing the results of your dispute investigation. Note, if you submitted an electronic dispute then you would receive your results via email. (As a side note, you may want to think twice before you dispute your accounts online as you will likely be agreeing to terms and conditions which do not work in your favor.)

Do-It-Yourself vs. Professional Help

It is important to understand that you absolutely have the right to dispute items on your credit reports completely on your own. However, as you can plainly see from the information above the dispute process is not nearly as simple for consumers as it is often made out to be. In truth, most consumers have no idea just how much the deck is stacked against them when they submit a credit report dispute. After all, remember that the CRAs' primary customers are the companies to whom you owe money - aka your creditors.

When setting out to dispute items on your credit reports it can definitely pay to work with a reputable professional who fully understands the process and knows how to help you get the best results possible. Yes, you have the right to dispute items on your own, but that does not mean that doing so is necessarily in your best interest. Remember, you also have the right to cut your own hair, repair your own car, or install your own appliance; however, if you choose to do so there is a strong chance you will not be as happy with your results as you would have been if you had hired a pro.

It is also worth noting that while there are some scam artists and bad apples pretending to offer "credit repair" services, there are also reputable and trustworthy credit repair companies whom you can hire to help you dispute questionable items on your credit reports. Just because your cousin was burned by a dishonest mechanic does not mean that all mechanics set out to take advantage of people. You would be unwise to write off an entire industry due to a few shady players.

Interested in finding out what HOPE4USA's team of credit experts can do to help you with your credit situation? CLICK HERE to schedule a no-obligation credit analysis or call 704.499.9696.

Michelle Black is an author and leading credit expert with over 15 years of experience, the credit blogger at HOPE4USA.com, a recognized credit expert on talk shows and podcasts nationwide, and a regularly featured speaker at seminars up and down the East Coast. She is an expert on improving credit scores, budgeting, and identity theft. You can connect with Michelle on the HOPE4USA Facebook page by clicking here.