Why Consumer Credit Report Errors Are Hard To Fix

If you've ever had credit problems, you have probably experienced the difficult process of attempting to fix errors and problems on your personal credit reports. For business owners building business credit, personal credit is definitely a concern. This especially applies to those with lower personal credit scores. As a business owner, it's wise to fix your personal credit and/or make sure it is in the best shape possible. 

However, repairing credit and addressing the errors and issues that occur on personal credit reports is often more difficult than people anticipate. 

Here's why: 

While the Fair Credit Reporting Act requires the credit bureaus to conduct a "reasonable reinvestigation" into consumer disputes, what actually happens is probably somewhat short of that goal. 

When a consumer sends a dispute, the credit bureau converts their dispute into one of a few numeric codes that describe the category of the dispute. Then (in about 85% of cases--the other 15% are either rejected, corrected, or otherwise resolved internally by the credit bureaus) the numeric code is sent to the creditor through an electronic system called e-OSCAR, and the creditor then responds and tells the credit bureau whether the information is accurate or not. 

That's the gist of it. 

The problem is that the "investigation" done by the creditor is typically just a check of the information being disputed against their own records. Since the information being disputed actually came from their own records in the first place, there is little chance that they are going to discover something wrong or mismatched through this method of investigation. 

Consumer advocates have long lamented this shoddy investigation system, and the government is slowly starting to listen. A 2012 report by the Consumer Finance Protection Bureau covered many details of the consumer credit reporting system and the dispute resolution practices of the credit bureaus and creditors.