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MintLife Blog > Credit Info > The 7 Steps of Filing a Credit Dispute

The 7 Steps of Filing a Credit Dispute

Credit Info

There are 660,000,000 credit files distributed almost equally across three credit reporting agencies.

There are also monthly credit file updates submitted by over 10,000 different companies, and 1,300,000,000 accounts maintained on your credit reports.

When handling that staggering amount of ever-changing information from so many companies there’s no doubt that errors are going to occur.

In fact, according to the Consumer Financial Protection Bureau (“CFPB”), the credit bureaus received 8,000,000 consumer disputes in 2011.

That’s almost 22,000 disputes each day…including weekends and holidays.

Assuming there’s some sort of consistency across credit bureau disputes, that would mean each credit reporting agency receives roughly 7,300 disputes every day…each with a requirement for their investigation to be completed within 30 days.

In order for any industry to reasonably deal with those volumes, automation is required.

The credit reporting industry is no different. Almost all disputes that are submitted are dealt with in an automated manner.

Here’s how it works…

Step 1. Consumer Files Dispute

Consumers normally file credit report disputes one of three ways; via the Internet, U.S mail, or on the telephone.

Step 2. The Dispute is Converted to a Code

The first step in the automation process is to convert your dispute into a uniform code so that any person or any system receiving the dispute can immediately know exactly WHAT the consumer is disputing about the account.

For example, if you disputed an account as not being yours, then the credit bureaus would convert that into code “001”, which reads “Consumer states not his or hers.”

Step 3. The Disputed Item is Updated To Show “In Dispute”

One of the requirements of the Fair Credit Reporting Act (“FCRA”) is that when a consumer disputes a credit report entry it must be shown as being in dispute.

This allows other lenders who may access your credit report know that the validity of the item is in question.

The “in dispute” designation also has the affect of rendering the entry harmless to your credit scores. I’ve written about that for Mint in the past, here.

Step 4. The Dispute Is Communicated to the Furnishing Party

Normally, errors on credit reports are not the fault of the credit bureaus but instead are caused by lenders and collection agencies sending incorrect information.

Garbage in, garbage out.

Once the credit bureau receives and normalizes the consumer’s dispute, it’s time to communicate with the party that furnished the disputed item.

The furnishing party, more commonly referred to as a “data furnisher”, is almost always going to be a collection agency, a bank, a credit card issuer, or some other type of lender.

In fact, according to the CFPB, 40% of the 8 million disputes filed in 2011 were specific to debts in collection.

The method of communicating the consumer’s dispute to the furnishing party is done using an online system called e-Oscar, which stands for Online Solution for Complete and Accurate Reporting.

E-Oscar was created by the credit reporting agencies for the purpose of communicating disputes to and receiving corrections from their data furnishers.

The form used to communicate the consumer’s dispute is called an ACDV, which stands for Automated Credit Dispute Verifications.

This is the form that is sent to the data furnisher via e-Oscar. It contains the coded dispute that I referred to in Step 2.

Step 5. The Furnisher Receives and Processes the Dispute

Banks and collection agencies can log in to e-Oscar and see any new disputes that have been filed on information they submitted to the credit bureaus.

Someone at the bank or collection agency is tasked with dealing with them in a timely manner.

So, for example, if a consumer said that the account was not theirs the bank or collection agency would reasonably conclude that the consumer was challenging their relationship with and liability for the account.

The bank would likely check their records to confirm name, address, and Social Security number to make sure it matched what they were sending to the credit bureaus.

If it does, then the account has been “verified as accurate.”

Step 6. The Furnisher Responds Back to the Credit Bureau/s 

Once the bank or collector has completed their internal investigation, it’s time for them to communicate their results to the credit reporting agencies.

They’ll use the same exact form (the ACDV) they received from the credit bureaus initially to communicate their findings.

They’ll use the ACDV form to direct the bureaus to delete the item or leave it as is. And yes, the form is sent back to the credit bureaus using e-Oscar.

Step 7. Updating the Credit Report and Communicating Investigation Results With the Consumer

After the credit reporting agency has received a response from the bank or collection agency they update the credit report accordingly.

So, if the bank agreed with the consumer that the account was not theirs, they would ask the credit bureaus to delete it.

If the bank did not agree with the consumer then they’d instruct the credit bureaus to leave it as is.

At this point the investigation is completed. The credit bureau will send the consumer results of the investigation detailing the findings.

The consumer can choose to re-dispute the item with the credit bureau if they have new supporting information or they can take their argument directly to the bank or collector and attempt to convince them that what they’re reporting is incorrect.

John Ulzheimer is the President of Consumer Education at, the credit blogger for, and a contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and, John is the only recognized credit expert who actually comes from the credit industry. The opinions expressed in his articles are his and not of or Intuit. Follow John on Twitter.



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