Some reasons for not disputing through a CRA:
Putting the merits aside for a moment, and considering just the process, when you dispute through a CRA, they must then refer your dispute to the party who furnished the disputed information. They have 5 days to do that, but it introduces an unnecessary delay. They are just an unnecessary middle-man. The merts of how the CRAs do this, which I will discuss below, is the real reason why one should not dispute through a CRA.
The CRA will then tag the account with a Compliance Condition Code, which idicates that the account is under FCRA dispute. That code will block certain parts of the account from FICO scoring until a new Compliance Condition Code is entered by the CRA, indicacating resolution of the dispute. When you dispute directly with the furnisher of the information rather than through the CRA, that normally does not happen, since the CRA does not know of the dispute. That process of flagging the account leads to short term abnormaliies in your credit score that are usually confusing.
ONce the furnisher of the information is referred a dispute through the CRA, they are then required to conduct an investigation of the disputed information, and report back to the CRA before the expiration of the total time period of 30-days from date of your dispute, thus allowing the CRA to complete its "reinvestigation" within the 30-day period, and comply with its statutory requriement to then send you the results within 5-days therefter. Under the direct dispute process, the same 30-dsy period applies, but all the back-and-forth between the CRA and the furnisher of the information is avoided.
Now, on to the more substantive reasons. When a CRA initially refers your dispute to the furnisher of the reported information, they use an automated process called e-Oscar. It is form filled out by a clerk, and has provision for less than 10 broad codes that describe the reasons for the dispute. The referral form also provides a short box for the clerk to enter additinal comments which is restricted to something like 50 words. That is what your dispute is reduced to by e-Oscar, The supporting documentation that you laboriously put together to support your dispute is rarely, if ever, forwarded with their e-Oscar form. So you have an instant and serious handicap in that all of your supporting docmentation is not received by the furnsher of the information, leading to very shoddy investigations on their part, Omce completing their investigation, the furnisher of the information then transmits their findings back to the CRA using a form with a code number. Your dispute thus becomes basically te transmission of coded numbers back and forth between the CRA and the furnisher of the disputed information.
When you file a direct dispute, you totally eliminate all CRA involvement, including their sanitization through e-Oscar. That is THE primary reason why the new direct dispute process was advocated so stongly by consumer organizations. When you file a direct dispute, you are assured that all supporting documetation is received by the furnisher of the information.
In fact disputing through q CRA can result in your loss of the right to file a direct dispute. If you dispute first with the CRA, a subsequent direct dispute on substantially the same grounds can be dismissed by the furnisher, without investigation, as "frivolous or irrelevant."
As a final reason, disputes through a CRA under FCRA 611(a) grant the CRA the right to conduct a "reinvestigation" whatever they consider that to be, once they receive teh investigatin results from the furnisher of the information. I personally dont want a CRA, who is not a party in substance to my dispute, interjecting their subjective opinions.
There are only two scearios where I would dispute through the intermediary of a CRA. First is when you dont have the address of the furnisher of information, and thus cant send them a direct dispute. The CRA dispute process has an advatage in such situations, as the CRA must determine the contact address, and if they cannot contact the furisher or they furnisher does not respond within the 30-day period, the CRA can delete the disputed information as being unverified,
The second sitatuation where I would dispute through a CRA is when the direct dispute process is simply not availqble. One situation that comes to mind are disputes relaing to credit inquiries. Credit report inquiries are specifically exempted from the direct dispute process, so if you wish to dispute a credit inquiry, you simply have no choice.
