Many consumers check their credit reports every year, both to see where their credit score has changed and to check for errors. And if they do spot an error, many of them grit their teeth and begin the process of disputing the error. As far too many of us have learned the hard way, getting an error removed from your credit report can be much harder than it actually is. Fortunately, however, that’s about to change.
Room For Error
You might wonder why there isn’t a law in place requiring credit bureaus to address errors, and, in fact, there is. It’s called the Fair Credit Reporting Act and it requires credit bureaus to investigate any claim of error on the reports filed. The problem is that the law was vague and the credit bureaus only needed to make a “reasonable effort.”
Often that was defined as contacting the creditor, getting their side of the story, and, more often than not, letting the error stand. Not helping matters was that the process to correct an error was complicated, some argued convoluted on purpose, and that it was almost entirely automated. The procedure essentially functioned like this: A complaint was filed, and a worker translated that into a three-digit code. That code was sent to the creditor, and they either verified the information or disputed it, but often, that was where the process ended. Even serious concerns were sent a simple form email and some consumers would wait weeks or even months for any sort of resolution.
While this situation is relatively rare, it’s happened often enough, and enough consumer complaints were collected, that the New York attorney general took action against the major credit bureaus over it. Of note is that even the credit bureaus agreed with the case; they’ve spent the last three years closely working with the state of New York to build a better system.
More Eyes, More Hands
As part of the settlement, those error codes and verifications are no longer used in serious cases. While minor issues such as incorrect addresses or inaccurate spellings of names will still be handled by codes and data entry, more serious cases such as identity theft, “blended” files where two people with the same name have their credit reports mixed together, and fraud will be handled by a person trained to both discuss the issue and with the authority to take action.
This is great news for consumers on multiple levels. The first, of course, is that their disputes will no longer be settled by machines and outsourced employees, or, as often can become the case, lawyers and court judgements. Credit disputes will be resolved in a way that’s cheaper for the consumer and more effective for everyone.
The second is that this will streamline and make more accurate the error correction process in situations that desperately need it. Identity theft and fraud require swift, decisive action to prevent, and credit bureaus are finally providing the tools necessary to make that happen. In short, if you’ve got a serious error on your credit report, it’s finally getting easier to resolve.