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.
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.
- 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.
- 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).
- 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.
- This does not work on recent debt. It is a tactic best used for debts that are over 2 years old.