Fixing An Error In Your Credit History Can Require A Lawsuit
1 September 2006It’s a little disturbing to hear, but with some errors on your credit history, there’s not much you can do to get it fixed short of sueing the credit reporting agencies, as SmartMoney reports here. The problem is with an automated reporting system:
Here’s how it works: When consumers file a dispute with the credit bureau, they are asked to describe the error, and can opt to send any supporting paperwork or information separately. The bureaus then conduct an investigation, which basically involves notifying the creditor about the disputed information so the creditor can confirm whether it’s wrong. Problem is, the bureaus report errors by choosing from a list of two-digit codes that describe the most common types of complaints, such as “account not his/hers” or “claims account closed.” That, consumer advocates say, may solve some problems. But it doesn’t solve those that fall outside the box.
“They try to automate things to make it cheaper, but in the process they lose a lot of detail,” says Chi Chi Wu, staff attorney, National Consumer Law Center. “People send these long letters that explain what happens, a lot of documentation, and all of that gets reduced to two-digit codes which the agency sends to the lender, the furnisher of the information.”
So essentially the “investigation” the credit agencies are conducting consists of sending a two digit code to the person who reported you to ask whether it’s true or not. And often, because that code is so generic, the company they’re reporting it to won’t have any clue what the basis for the objection is. The article discusses several people who were forced to resort to a lawsuit to get a human being at the credit agency to actually evaluate their file. There doesn’t seem to be any good way around this problem, other than making sure the person who you owe the debt to will confirm it’s inaccurate. But as one of the people in the article demonstrated, sometimes it can be a tax lien or something else where no one has any incentive to help you out.
Discuss this in the Free the Drones Financial Forums.
Comments are closed.