Disputing Tactics on Credit Report Errors Using Consumer Laws

A study conducted by the Federal Trade Commission in 2012 revealed that around 40 million Americans have inaccurate information on their credit report. The study was mandated by the Congress to address numerous complaints by consumers. On the other hand, about 50% of these affected individuals claimed that their credit score fell by 25 points or more. Unfortunately, they had to deal with soaring interest rate on mortgages, credit cards and auto loans. Aside from that, such errors could also affect job opportunities, cause denials for rental properties and increase insurance premiums.


On the other hand, it was discovered that 4 out of 5 consumers had an improved credit score after filing a dispute. However, a follow-up study in 2015 showed that 70% of those who filed a dispute believed that the information on their credit report was still inaccurate despite the assertion of the credit bureaus that they have already rectified the discrepancies.


Howard Shelanski, the director of FTC’s Bureau of Economics in a prepared statement after the 2012 study said, “These are eye-opening numbers for American consumers. The results of this first-of-a-kind study make it clear that consumers should check their credit reports regularly. If they don’t, they are potentially putting their pocketbooks at risk.”


Helpful Tips before Filing a Dispute

Now that you have learned that your credit report may contain incorrect information and its undesired effects to your financial health, it is a must that you know how to assert your rights as a consumer. When dealing with credit report errors, the best possible way to resolve this is by filing a dispute against the credit bureau and the information provider. But before you do that, here are some helpful tips:


  1. Obtain copies of your credit reports.

– You can obtain a free credit report through the following ways:


First, you can request for a free annual credit report from the three credit bureaus (Experian, TransUnion and Equifax) as mandated by the Fair Credit Reporting Act, by logging on to http://www.annualcreditreport.com/


Secondly, you are permitted to have a free credit report if you have been denied of credit, denied employment or insurance because of your credit report, unemployed but already planning to look for a job soon, a recipient of welfare from government, or if you are a victim of identity theft.

There are several states that have laws which entitle an individual to have an additional free credit report each year.


If you are unable to obtain a free credit report through the methods aforementioned, you can get one by requesting directly from the credit bureaus. This will cost you around $10 to $20 (price varies depending on which bureau).


  1. Review your credit reports.

Financial experts and consumer advocates recommend that you must review your credit report periodically. There are 3 vital reasons behind this:


First, the information it contains can influence your loan application and the amount you have to pay. Then, ensure that every detail in your report is correct, complete, and updated before a loan or job application. Using this strategy can help you prevent identity theft.

In addition, it is essential that you review each credit reports from the credit bureaus as these reports may not have identical information. This can be a tough task to do if done all at once; thus, it is advisable to check one credit report each month or every quarter. When you have your credit reports at hand, try to check each detail thoroughly. If you find an error, highlight these items for these will be your basis in filing a dispute. Then, create a list of the details that you think are inaccurate, incomplete, and/or outdated. Lastly, gather documents that will serve as your supporting evidence.


Important Laws You Must Know

As a consumer, you have the power to exercise your rights against unfair and illegal practices of any businesses, financial institutions and debt collectors. Before you can actually exercise these rights, the first thing you need to learn is how these laws can protect you in order for you to become an empowered consumer.


When filing a dispute, you may feel powerless, and you cannot help but compare yourself to “David” battling against the gigantic “Goliath” (the credit bureaus and creditors).  Let’s correct that notion because the following information will definitely lift your spirit and can even boost your courage as a consumer knowing that these laws uphold your rights in dealing with credit errors and the dispute process.


Also referred to as FCRA, this law is considered as the patriarch of consumer credit protection law. As a federal law, it controls how information about a consumer’s credit is collected, shared and utilized. FCRA is regulated by the Federal Trade Commission.


When it comes to the dispute process, FCRA asserts that:

  • As a consumer, it is your right to dispute unverifiable, obsolete, and incorrect information included in your credit report.
  • Credit reporting agencies must investigate all disputed information, except when your dispute is considered frivolous.
  • The removal or correction of inaccurate, incomplete, and unverifiable information must be done within 30 days after it has been identified. If they assert that their report is accurate, they must tell you why within 30 days.
  • Obsolete negative information should also be deleted.
  • Negative items on your report must only remain for 7 years from the date they went into default status except in the case of bankruptcy, which can stay on your record for up to 10 years. Information pertaining to an unpaid judgment against you may be reported for seven years or more.
  • Anyone who reports to the credit reporting agencies (creditors, employers, collection agencies and courts) must only report information that is complete and accurate.
  • In case a party who reviewed your credit denied your application or made you pay more due to the information on your credit report, they must inform you which agency issued the report.


If the credit bureaus or creditors ignore your request to correct an error on your credit report, you don’t have to worry, because you are entitled to recover most of your damages or the amount of $2500. Aside from that, you may be compensated with punitive damages including legal fees and other fees. To claim this relief however, you must file a suit against the other party within 5 years from the time you discovered the discrepancy.



FCBA is a federal law which is a component of the Truth in Lending Act. It aims to protect the consumers from unfair billing and outlines the process in which errors should be corrected. This law is also administered by the Federal Trade Commission.


FCBA specifically help consumers dispute unfair business practices such as the following:

  • Charging your account although you did not purchase such product.
  • Incorrect amount is charged on your account.
  • Problems encountered in buying products online: wrong items were received/delivered, damaged items, wrong delivery method or the items were never delivered.
  • Payments were not credited.
  • Billing statements are delivered to a different address.


In order to get the most of the benefits from this law, you have to strictly abide by the rules. This will be explained further in the dispute process later on. Meanwhile, there are creditors who offer dispute claims through their websites. Before you do that, it may waive your protection under FCBA. You have to do some research first in order to avoid further problems. Also, if you are thinking of contacting the responsible party via phone to dispute a claim, you are not protected by this law either.


Under FCBA, you are allowed to file a lawsuit against the offender. In such case, you have the opportunity to recover actual damages for twice the amount of the incorrect financial charges alogn with attorney’s fees and other expenses.



Another federal law is the Truth in Lending Act aka TILA. It is also known as the Consumer Credit Protection Act or “Regulation Z”.


Under TILA, you are protected through the following:

  • Disclosure of the “Annual Percentage Rate”(APR) in order to inhibit vendors from promoting misleading interest rates to consumers.
  • Provide the consumers to shop for the lowest rate.
  • Creditors must have a uniform calculation of financial charges that can be understood easily by consumers.
  • The terms and costs should be disclosed to consumers.

This law however does not determine how much creditors can charge their consumers.



This law was enacted in order to provide protection to consumers (not businesses) against the bad practices of debt collectors. Initially, this law was only applicable to companies that engage in buying debts at a discounted rate who will then try to collect it from the individual. Eventually, the scope of this law has widened. It now applies to attorneys who are involved in collecting debts. This is an advantage on the part of the consumers since this is an added protection from a bunch of debt collectors.


FDCPA blocks “abusive and deceptive” practices of debt collectors. Such as the following:

  • Persistently calling you for no apparent reason or cause. Simply being a nuisance caller.
  • Calling you after the collector is aware that you are working with an attorney.
  • Calling you after you have made a request to validate a debt.
  • Keeps on calling you even after 9 pm or before 8 am local time.
  • Calling you at work even if it is not allowed by your employer.
  • Threatening you that they will provide wrong information to credit reporting agencies.
  • Such actions that can humiliate you publicly.
  • Asking other people other than your spouse or attorney.
  • Using foul language or threatens you that you will get arrested.
  • Collecting more than the amount you owed by adding additional fees such as a processing fee.
  • Pretending to be another person in authority. Example: a policeman or attorney


Additional information:

A debt collector should stop contacting you once they’ve received your written statement demanding that they should stop contacting you or that you refuse to pay any financial obligations.


However, they are allowed to contact you after receiving your letter for the following reasons:

  • For the purpose of letting you know that they will not be pursuing the matter any further.
  • In order to tell you upfront that they will file a case against you.


This law also imposes the following requirements for debt collectors. Aside from the fact that they are expected to act professionally, they must also do the following:


  • They must identify themselves every time they contact you and inform you that every detail you provide to them will be used in the debt collection.
  • They must provide you the information if you make a written request for the name and contact details of the original creditor.
  • Send a formal notice regarding your right to dispute the debt.
  • If ever a case is filed against you, they must file it in a court under the jurisdiction of your residence or where the contract was signed.
  • If you send a letter to them requesting them to valid the debt within 30 days having been notified of the collection attempt, the collector must send you the information that confirms the debt or stop the collection process completely.


Both the Consumer Financial Protection Bureau and the Federal Trade Commission implemented this law, and you are also allowed to sue privately.


Disputing Errors

The correction of an error or inaccurate information in your report is the responsibility of the credit reporting company and the information provider (the person, organization or a company that supplies information about you to a credit reporting company).


Below are the steps about the most important part of the dispute process, which is writing a correct dispute letter, along with where and how to send it and other essential information.


First Step:

Basically, you have to inform the credit reporting company through a written statement or letter what particular information you think is incorrect. You can also include copies of pertinent documents to justify your claim. The following is your guide for disputing errors on your credit report as published by the Federal Trade Commission through their website (https://www.consumer.ftc.gov/articles/0384-sample-letter-disputing-errors-your-credit-report).


[Your Name]

[Your Address]

[Your City, State, Zip Code]


Complaint Department

[Company Name]

[Street Address]

[City, State, Zip Code]


Dear Sir or Madam:

I am writing to dispute the following information in my file. I have circled the items I dispute on the attached copy of the report I received.

This item [identify item(s) disputed by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment, etc.] is [inaccurate or incomplete] because [describe what is inaccurate or incomplete and why]. I am requesting that the item be removed [or request another specific change] to correct the information.

Enclosed are copies of [use this sentence if applicable and describe any enclosed documentation, such as payment records and court documents] supporting my position. Please reinvestigate this [these] matter[s] and [delete or correct] the disputed item[s] as soon as possible.


Your name

Enclosures: [List what you are enclosing.

Once your dispute letter is done, you may send it by certified mail, “return receipt requested,” and don’t forget to save copies for yourself as this is will be used for your documentation process.

The credit reporting companies will investigate the error within 30 days except when they consider your dispute as frivolous. Once the investigation is complete, the credit reporting company must provide you the results through a written statement plus a free copy of your report if the dispute will result in an amendment. On the other hand, if the result of the investigation doesn’t resolve your dispute, you can request for the statement of the dispute to be kept in your file.

Second Step:

The process and format of your dispute letter will be the same as above, but the recipient will now be the information provider (the person, organization or a company that supplies information about you to a credit reporting company). Together with the copies of your supporting documents, send your letter to the address of the provider listed on your credit report. If the address is not listed, you can call the provider and ask for the exact address to send your letter. In case the information provider refuses to give you an address, you can use any business address of that provider.

In addition, it is their responsibility to notify you within 30 days after they received your dispute letter. If your dispute is denied, you are authorized under the law to request all the documentation from the creditor in order to prove that there is no error on your report.

Facts About Your File

According to the FTC website, majority of your credit accounts may not reflect on your credit file. This is because not every creditor provides information to credit reporting companies and these include: travel, entertainment, credit unions, retail stores, and gasoline card companies.

There will be no time limit on reporting the following information: criminal convictions, feedback on your application for a job that has a salary greater than $75,000 annually, applied for a credit worth $150,000 or more, or life insurance.



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