In a nutshell, it basically works like this.
There are two alternate ways to dispute inaccuracies in your CR. Both ways ultimately involve the receipt of your dispute by the party alleged to have done the inaccurate credit reporting.
The first process, which was all that was effectively available to consumers prior to 7/1/2010, required the consumer to first file their dispute through the CRA, who was basically just a middle-man in the CRA dispute process. This process is outlined in FCRA 611(a). The CRA then gets needlessly involved, and usually sanitizes the information you provided, and forwards it to the real party of the dispute, who is the party who reported the disputed information. That party then responds back to the CRA, and the CRA then responds back to you. Kinda dumb, in my opinion.
As of 7/1/2010, the alternate direct dispute process was formally available to consumers. That process, provided for under FCRA 623(a)(8), and implemented as of 7/1/2010 by the regulations published at 16 CFR 660.4, now permits the consumer to bypass the CRA, and deal directly with the party who reported the disputed information. They must, in turn, respond directtly back to you, and not through the intermediary of a CRA. No sanitization of your dispute by the archaic e-Oscar CRA referral process. The direct dispute process incorporates all of the investigation time periods under the CRA dispute process, while allowing you to bypass the meddling of the CRA in a process that really does not involve them.
You have a choice. In but a few rare circumstances, such as when you dont know the identity of the party who reported information you wish to dispute, and thus cannot communicate directly with them, the direct dispute process is clearly to the consumer's advantage. That is why congress has provided it. They recognize the many flaws in the CRA dispute process, and have given consumers an alternative.
Here is a sample, boilerplate direct dispute letter that outlines what is required:
“This is a Notice of Direct Dispute with you, under the provisions of FCRA §623(a)(8)(D), of the accuracy of information you have reported to my credit file.
► (If sent to a debt collector, (CA), it might be beneficial to also include the blurb:
► “This is a direct dispute of credit reporting. This is not a request for debt
validation/verification under FDCPA §809(b).”.
(don’t let them just simply sluff it off as a meaningless DV letter)
“In compliance with FCRA §623(a)(8)(D), and enacting regulations published at 16 CFR § 660.4, this Notice of Direct dispute includes:
“Identification of the specific information being disputed:
(specify the account number, and the specific information that is disputed under
that identifying account)
“Basis for the dispute:
(how the reporting was inaccurate; was any reporting in violation of any statutory or
regulatory provisions? account or express agreements? CRA reporting gudelines? Account not
yours? etc.)
“Supporting documentation:
(all documents that support your dispute; make sure to include,
as part of your documentation, at least a copy of the portion only of your
recent credit report showing their reporting of the disputed information was
actually reported to your credit flle. The implementing rule suggests a showing
that it appeared in your credit report)
“Under the provisions of FCRA §623(a)(8)(E) and 16 CFR §660.4,, you have the duty to review all of the information I have provided to you, to complete your investigation of this Direct Dispute within 30-days of my Notice of Direct Dispute, and report back to me the results of your investigation within 5-days of your completion of your investigation.”
“Should you find the disputed information to be inaccurate or incomplete, or you cannot verify the accuracy or completeness of the disputed information, you are additionally required, under FCRA §623(b)(1)(E), to promptly notify the credit reporting agencies of correction of this information, or of its deletion from my credit file.”
