Helpful Tips When Filing Credit Report Disputes

Credit Bureau Secrets: Consumers Must Avoid These Mistakes

Credit Bureaus perform needed services, but they are not perfect, and sometimes, things go wrong. Some of those errors may be created by the bureau, but most probably come from the reporting entities. It is possible to fix most of the errors, but not always, as we shall see.

The focus of this story is the facts that surround the imperfect system of disputed items on credit reports and the way they are sometimes handled by the credit bureaus. It is hoped that things will improve, but, because nothing is perfect and it takes time to fix systemic problems, this story points out some traps for the unwary and provides some tips.

This story does not in any way intend to defame the reputation of U.S. credit bureaus. The aim is to report the facts in a fair and objective way to inform readers about what has happened in the past with disputed credit report matters, and to provide information about how to properly file a dispute to elicit a positive resolution to clear up errors on credit files to maintain good credit.

Based on research conducted by this author, the evidence showed that many consumers, in fact, got positive results and valuable assistance from credit bureaus based on the filing of complaints about errors made on their credit file.

If you think you need legal assistance regarding disputes with a credit bureau, consult a consumer protection lawyer.”

The Investigation

Julie Miller is now a rich woman. How? She sued Equifax credit bureau and won an astounding jury award of $18 million dollars in damages, because Equifax stubbornly refused to correct false errors on Miller’s credit report even after she hounded the bureau for over 2 years.

Between 2009 and 2011, the angry, frustrated woman contacted Equifax eight times to convince the credit giant to correct the mistakes on her credit report.

But Equifax made no serious attempt to correct the obvious proven mistakes. A jury agreed in July 2013, that Miller was harmed by the agency’s non compliance.

“There was damage to her reputation, a breach of her privacy, and the lost opportunity to seek credit,” Miller’s lawyer, Justin Baxter, said gleefully, following the verdict.

You would think after Equifax lost $18 million that Equifax and other credit bureaus would learn to correct false errors on credit reports, right?

Well, apparently not.

According to a 2013 (FTC) Federal Trade Commission study of credit bureaus, the study found that “tens of millions” of Americans had mistakes on their credit report files.

The study found that approximately 12 percent of all U.S. consumers disputed items on their reports that were never fixed.

False credit errors can spell trouble for a consumer. Credit reports are used to calculate your credit score, which determines access to loans, credit cards, utility services, mortgage loans, apartment rentals and plus, a person can even be denied employment based on faulty errors listed on credit files.

“The Fair Credit Report Act(FCRA) require that all credit reporting agencies like Experian, Equifax and Transunion to conduct a reasonable investigation whenever a consumer dispute information on their credit report,” says National Consumer Law Center staff attorney Chi Chi Wu, during a Fox Business News interview.

To conduct a reasonable dispute investigation, credit bureaus only rely on the word of lenders, debt collectors and other data providers that furnish misinformation to the bureaus from beginning.

“Because the bureaus spend so little time investigating errors and usually take the word of the furnisher over the consumer, consumers often need to dispute multiple times, spend countless hours trying to fix mistakes and eventually have to get legal counsel to get the problem fixed,” says Devonna Joy, attorney at the Consumer Justice Law Center in Big Bend Wisconsin.

Inaccurately Reporting On Your Credit Is Not Illegal

If this happens to you, first, you have to file a complaint with the credit bureau. During this process, you must carefully file disputes properly to stand a chance of winning in court. If you don’t follow proper complaint procedure, you risk jeopardizing your consumer rights to successfully defend your case in court to prove the errors on your credit report are wrong.

“There are a number of errors consumers make when filing a lawsuit, particularly if they try to do it themselves or do not have a lawyer who is knowledgeable of consumer protection,” said consumer attorney Devonna Joy, in an email sent to Newsblaze.

Joy says that the public and many lawyers believe a lawsuit can be brought against a credit bureau simply because the bureau reported negative information that denied someone a loan or credit.

“It is not illegal for credit bureaus to inaccurately report on someone’s credit,” Joy explains.

“The violation of law occurs when, after proper notice, the credit bureau fails to conduct a reasonable investigation and fails to remove the error when it should be corrected.”

“Many consumers (or inexperienced lawyers who jump the gun), file lawsuits simply because there is an error on a credit report or because they have been denied credit,” Joy added.

“If an error(filed as a lawsuit) has not been through the dispute process required under the FCRA, those lawsuits will always fail,” Joy advise.

Feel discouraged.

Don’t give up yet.

In other words, there is a “right” way to file disputes, and a wrong way.

Traps To Avoid And Tips To Follow When Filing Credit Report Disputes

(1) Not Thoroughly Reading Credit Bureau Agreement Offered Online

As a consumer, you are probably unaware of the fact that if you recently obtained a credit report online from (one) of the three major credit bureaus, you probably overlooked the arbitration terms located near or at the bottom of the bureau’s Web page.

The pivotal key to avoid having to deal with a locked-in arbitration agreement is to: mail an opt-out letter to the credit bureau within 30 to 60 days after receiving the report. If you fail to send the opt-out letter, then you automatically agree to a binding arbitration clause that prevents you in the future from challenging your dispute in a court of law or prevents you from joining a class-action lawsuit.

Further, what this opt-out means is: if you request a credit report online and later discover an error on the report, you still have the legal right under FCRA to challenge their refusal over the disputed item.

But if you somehow disagree with the way the credit bureau handled the dispute and you decide to take the bureau to court, the credit bureau can legally invoke the arbitration clause and force you to relinquish your (right) to argue your case before a judge or jury. Under these circumstances, your hands are literally tied to prove your case and win monetary damages under arbitration.

Arbitration is overwhelmingly unfavorable for consumers

The arbitration process works this way: The credit bureau will appoint a specific arbitration association, and the decision to litigate your dispute rests exclusively upon the arbitrator. Let’s say, if you disagree with the arbitrator’s decision who ruled against you in favor of the credit bureau, you cannot appeal, at all.

“Arbitration for consumers overwhelmingly is unfavorable and the consumer is often required to keep the result confidential,” said Consumer Justice Law Center attorney Devonna Joy, a consumer rights legal firm based in Wisconsin.

“Arbitrators,” Joy said, “do not have to follow the law or even have any legal training.”

Joy explains how consumers are not entitled to appeal an arbitration decision.

“There is no right of appeal in most circumstances (or grounds for reversals), simply based on an erroneous arbitration decision, even for those decisions that the consumer could prove were wrong.”

Attorney Joy continues, “Discovery in arbitration is greatly limited, if permitted at all, meaning the consumer cannot find out what was done on (his or her) credit file by the credit bureau, like what type of investigation was done on the file; what was done behind the scenes or the real reason behind the decisions.”

Joy explained further.

“That means the inadequacies of the dispute investigation by credit bureaus and the companies furnishing information can continue to be hidden and not fixed.”

Another unfavorable issue involves the cost of the arbitration that consumers must pay to have a hearing held.

Joy strongly opposes the expensive arbitration cost imposed upon consumers, as opposed to a consumer having their own hired lawyer to try their case in a real court.

“There are steep fees for anything that the arbitrator does, including time working on the case e.t.c.”

“This concept alone, Joy says, is absurd; we do not in this country make litigants pay judges on an hourly basis to review and hear cases.”

“A successful consumer that will litigate cases against the credit bureaus in court is entitled to an award and reasonable attorney fees,” the consumer lawyer stated.

“Even worse,” Joy concludes, “an arbitrator may wrongly decide to make the consumer pay the credit bureaus’ attorney fees, and that decision would not be heard on appeal.”

(2) Misplaced Or Lost Evidence

If you send a credit bureau numerous disputes to refute a negative entry or entries on your credit file and the false error still remains – your next alternative is to sue the credit bureau, according to experts. Another option is to file a complaint with the Consumer Financial Protection Bureau.

However, either way: if you fail to save valuable evidence to prove the credit report errors on your file are false, and you also fail to show that you have been substantially harmed by the negative entry, these disadvantages can only produce a weak defense.

Losing or misplacing important evidence to prove your report contains wrong entries is like going to a gun fight without bullets!

“The strongest cases are where the consumer has tried on their own, made multiple disputes and can show they’ve been harmed,” Attorney Joy stated.

John Ulzheimer
John Ulzheimer

In an email sent to Newsblaze, John Ulzheimer, a National Credit Expert at, expressed his views about clients’ unpreparedness to fight credit disputes in court.

“In many of the cases where I’ve been an expert, even when the consumer had a valid claim; it’s hard for them to clearly articulate damages because they either have no documents to back their claim or no damages occurred.”

According to several cases reviewed by, “Many people lost their chance to argue their cases before a jury due to not saving enough evidence to be used in court to prove they’ve been wronged.”

With insufficient or no evidence, a case can be moved to summary judgment at the request of the credit bureau or the lender that sent the debt information to the credit bureau.

A summary judgment, legal experts say, is always decided by a judge, not a jury.

Consumer lawyers explains that in order for a plaintiff to get past the court’s summary judgment to have a jury hear their case, a plaintiff must produce evidence showing there are factual disagreements about what happened to the dispute letters sent to credit bureau officials, and how you suffered as result of the false errors remaining in your credit report file.

(3) Insufficient Information Included With Dispute: Never File Disputes Online

Another potential pitfall is when people make phone calls or use internet email to challenge disputes with credit bureaus. This mode of communication may not be too wise, experts say, because when filing the dispute by phone or email instead of postal mail, the consumer may not have sufficient information available to undermine false credit report errors.

“About 54 percent of disputes are done on the telephone or Web,” says Consumer Data Specialist Norm Magnuson.

Occasionally when consumers send complaint letters, Magnuson said the letters are very brief, which prevents consumers from making a strong case to sway credit bureaus to remove false errors. Disputes that contain insufficient information only give credit bureaus the leverage to gain a legal edge over the consumer who made the complaints.

“When you dispute by phone it’s harder to provide supporting documentation justifying your side of the dispute,” Credit Expert John Ulzheimer, said by email.

For example, credit bureaus flood the news media and the internet with advertisements, indicating how easy it is for consumers to file disputes on the bureau’s website. Many of these websites have a system designed to allow just enough space to briefly write out the complaint, when, in fact, there should be unlimited space to document a dispute that may need up to 15 or more pages of information.

Consumer lawyers insist that if you use an online dispute form supplied by a credit bureau, it could jeopardize the case; if you decide later to take the credit bureau to court.

DeVonna Joy
Devonna Joy

“Never do credit report disputes online or on the small space on the credit report itself,” said attorney Devonna Joy.

“There isn’t enough room to make full explanations,” Joy explains.

Deal Only With Certified Mail

Consumer lawyers stress that in order to build a solid case against a credit bureau if they repeatedly ignore your requests to remove errors off your report, you must use certified mail each time to communicate your complaint.

“Make multiple disputes if your credit report is not fixed. The most successful cases are those in which the consumer promptly disputes credit errors with the credit bureau in writing.”

Attorney Joy recommend these tips:

  • Send proof of why there is a complaint. For example; if an account is paid, send a copy of the proof of payment along with the dispute.
  • If someone else’s information is on a your credit report like incorrect addresses or social security numbers, you should provide proof of address, a copy of your social security card for identity, etc.
  • All disputes should be made in writing and sent certified mail with return receipt requested
  • “The big three(bureaus) lose or claim to lose consumer correspondence,” says Consumer Advocacy attorney Leonard Bennett, in a article published by creditcard website.

    Do Not Agree to Pay Off Or Make Payments On a Term Limited Debt

    Watch out for this problem. If you spot a debt on your credit report more than than seven years old, you can do these three things:

    1. Make a demand to credit bureau officials to remove the debt under the FCRA law that explicitly mandates that uncollected debts must be removed off a person’s file when the debt reaches seven years.
    2. Or you can sue the credit bureau under the statute of limitations act if the debt not removed upon proper request.
    3. The FCRA law also allows you to sue debt collectors if they hound you to pay off an expired debt.

    Beware of this clever technique often used by debt collectors to undermine the statute of limitation of seven years: “Although the statute of limitations (not to exceed seven years) work in your favor, people need to know they should not make the mistake of re-aging a debt by agreeing with collectors to make consecutive payments to pay off an expired debt or debts,” says Paul Stephens, a Director of Privacy and Advocacy at Privacy Rights Clearinghouse.

    Key Elements Of A Re-Aged Debt

    Re-aging is a process, which stated earlier, take effect when a consumer agree(in writing or verbally) with a collector to make a payment, no matter how small, on a debt, that has expired or approaching the statute of limitation of seven years.

    By agreeing to pay off the expired debt, you create a gift to collectors and credit bureau officials because this only gives creditors more time to use the courts to keep hounding you until the debt is finally paid, when the debt should have automatically been removed in seven years.

    Re-aging of debt is illegal under FCRA laws

    “There is a big problem with this particular issue,” said Stephen, in a recent news article.

    What triggers this action is when a debt collector sells unpaid accounts to other collectors, and it is not surprising that collectors often report inaccurate dates and the chronology of timelines, thus causing debts to be re-aged and thereby reported longer than seven years on a person’s credit report file.

    “Re-aging of debt is illegal under FCRA laws,” Stephens concluded.

    Attorney Devonna Joy concludes with this advice for people who need to file disputes with credit reporting agencies.

    “Consumers should write as though the letters will be read to a judge or jury, because that very well may happen.”

    As an analyst and researcher for the PI industry and a business consultant, Clarence Walker is a veteran writer, crime reporter and investigative journalist. He began his writing career with New York-based True Crime Magazines in Houston Texas in 1983, publishing more than 300 feature stories. He wrote for the Houston Chronicle (This Week Neighborhood News and Op-Eds) including freelancing for Houston Forward Times.

    Working as a paralegal for a reputable law firm, he wrote for National Law Journal, a publication devoted to legal issues and major court decisions. As a journalist writing for internet publishers, Walker’s work can be found at American, Gangster Inc., Drug War Chronicle, Drug War101 and Alternet.

    His latest expansion is to News Break.

    Six of Walker’s crime articles were re-published into a paperback series published by Pinnacle Books. One book titled: Crimes Of The Rich And Famous, edited by Rose Mandelsburg, garnered considerable favorable ratings. Gale Publisher also re-published a story into its paperback series that he wrote about the Mob: Is the Mafia Still a Force in America?

    Meanwhile this dedicated journalist wrote criminal justice issues and crime pieces for John Walsh’s America’s Most Wanted Crime Magazine, a companion to Walsh blockbuster AMW show. If not working PI cases and providing business intelligence to business owners, Walker operates a writing service for clients, then serves as a crime historian guest for the Houston-based Channel 11TV show called the “Cold Case Murder Series” hosted by reporter Jeff McShan.

    At NewsBlaze, Clarence Walker expands his writing abilities to include politics, human interest and world events.

    Clarence Walker can be reached at: [email protected]