Credit Dispute Myths Revealed
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Have you disputed an item on your credit report, only to be ignored by the Credit Bureaus?
Credit Bureaus work hard to discourage you from attempting to restore your credit. While the Fair Credit Reporting Act (FCRA) legally requires them to give you a chance to dispute an item on your credit report, Credit Bureaus do whatever they can to make it difficult for the average consumer to exercise their rights.
This may come as a shock to you, but the Credit Bureaus do not want you to have good credit because lenders — their customers — make far more profits from people who have low credit scores.
Who Handles Disputed Items On Credit Reports?
Under pressure from Washington, the Credit Bureaus now include a generic dispute form when they mail your credit report to you. In theory, if you see an item on your report that you do not believe is correct, you simply fill out the form and send it back so they can fix it.
Do these forms work? Well, sometimes they do.
But put your imagination to work here for a minute, and place yourself in an office building somewhere in Atlanta, Georgia where you along with another hundred workers do nothing else but respond to credit disputes.
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Now, this is not the highest paid job in the company, and the working conditions are not as plush as the executives on the top floor with a nice view of the Atlanta skyline. In your tiny cubicle, you get a telephone with speed dial and a place to put your purse. You report for work at 8 AM and wait for the guy from the mail room to drop off a big pile of dispute letters from irate consumers who are angry about their bad credit.
Most of these letters are pretty generic, the sort of thing you get from a “credit repair kit” sold at one of the leading discount stores for $19.95. Then there are the nasty letters, the ones that practically shout, “You are the reason for my bad credit”, “My brother-in-law says that by law you must help me” or “I am going to let the air out of your tires, unless you fix my credit.”
What a great job, right? These credit dispute staff come in to work every day to do the same mundane task. The pay is terrible, and since people quit all the time, half of the workers are still “in training.” Do you really expect your dispute letter will be handled in a highly professional manner?
How Do They Handle Disputes?
Under the Federal Debt Collection Practices Act (FDCPA), you have the right to ask a collector or creditor to prove that the amount owed is accurate. The woman who reads your dispute letter is required by law to “verify the debt”. She probably already has the phone number of the creditor or the collection agency in her automatic dialer, so she just calls them up and says, “Do you have so and so as a customer”? Then they answer, “Why, yes we do and they owe us $1,543.20.” So she makes a note on your credit report that the account has been verified.
She’s just taking their word over yours, and she never checked any further into the details. Why would she, when she just wants to get to the end of her work day and go to the movies with her boyfriend? This is how many errors end up on credit reports. Even though verification is mandated by law, Credit Bureaus simply do not provide 100% accuracy.
There Are No Credit Cops
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How can they get away with this? Well, on the surface, the Credit Bureau in this example has followed the law. The Federal Trade Commission is supposed to enforce these laws, but they often lean toward the side of the credit bureaus, and there are no “credit cops” on patrol to make sure that everything is done correctly.
And in all too many cases, the customer simply gives up and stops trying. They are counting on you giving up.
You lose unless you fight for your own rights.
To learn more about how to make Credit Bureaus to sit up and take notice of your dispute, check out my e-book, Get Out Of Credit Prison.
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An article on Smart Money says that “according to a 2007 survey by pollster Zogby, 37 percent of consumers who obtain their credit reports find errors, and half of those said they could not easily correct the mistakes. An earlier study by the U.S. Public Interest Research Group, a nonprofit consumer advocacy organization, found that one in four reports contained ‘serious errors.’ ”
http://www.smartmoney.com/spending/rip-offs/why-the-credit-bureaus-cannot-get-it-right/