The Frugal Creditnista

How To Dispute Your Negative Information With The Original Creditor

Most people are familiar with disputing negative information with the Credit Bureaus via the verification method. However, many times we get the ‘it's been verified' letter back and have to wonder… Did they really verify? Especially if it's incorrect. In their response letters, the credit bureaus will even tell you to consult with the original creditor for further investigation.

Verification letters can be used with original creditors as well; however they often come back with the same ‘it's been verified” response as well. What now? 
There are some other tactics to use with the credit bureau; but in relation to original creditors; the 623 dispute method may be a good option. Section 623(a)(8) of the Fair Credit Reporting Act allows you to request an investigation with the company furnishing data on your credit report – in this case the original creditor – to do a thorough investigation that backs up their claim that the information on your credit report is accurate. As of 2010 they are required to respond to your claims per the Fair & Accurate Credit Transactions Act of 2003 (FACTA) . Like the verification dispute letter, the original creditor has 30 days to respond.

What separates this dispute method from the other verification/validation methods is that you are asking for an investigation. This investigation is asking if the original creditor's records are accurate regarding your account. Why is this a good option? Surely the original credit is keeping good records, right? You'd be surprised.

Most companies only keep records for 1- 2 years; 3 years tops so they won't have the proof that you are requesting. This means they will need to prove that the information is accurate. Further; if you have a debt with a company that has been sold or has merged with another company; you've pretty much increased your chances that they don't have record of your late payment/charge off – yet they're still reporting negative information on hundreds of customers credit reports anyway; talk about illegal!

In your dispute be specific as to what you are disputing (late payment/charge-off) but not specific about anything that will prevent them from having to ‘prove' anything. If your dispute letter is not detailed enough the original creditor will deem your letter as frivolous and will not be required to investigate.  If they fail to respond in 30 days; then you can sue for a $1000 fine for violating the FCRA. Most consumers are not willing to take it to court and will just file a complaint with their state's Attorney General or the Consumer Financial Protection Bureau. Your choice.

It is important to remember that original creditors are not skilled in the area of answering dispute letters.  Thus they will do everything possible to deem your letter frivolous.  So, provide enough documentation – at the very least place the account number and reason why you're initiating an investigation; and write the letter in your own words!  There are several form templates online; if you use them expect a ‘form-like' response.  Use the letters as a guide; but personalize it to your situation.
Upon receipt of your letter the original credit must: Conduct an investigation; Review all the information provided by you about the dispute; Respond within 30 days of the investigation; If the information is inaccurate notify the credit bureaus of the mistake for corrections.
Important things to remember:
  1. You must dispute with the credit bureaus first!  If you don't you will not have a right to sue.  By disputing with the credit bureaus first; the original creditor should have already been contacted by the credit bureaus anyway; which is why it was verified right?  Thus you will be able to sue them directly as a private citizen for furnishing unverifiable/inaccurate information on your credit report. 
  2. If they do not respond in 30 days; send a letter to their legal department stating they have violated FCRA and of your intent to sue (you will have to sue to get it off).
  3. If they have responded that they've investigated and it's yours; feel free to ask them for a copy of the documented proof they have on file to verify this information.  If they don't provide you with proof; send letter to legal department with violation and intent to sue.
  4. This does not work on recent debt.  It is a tactic best used for debts that are over 2 years old.
Hope this helps!

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