What Does the Credit Bureau Validate?

Each credit bureau maintains a database of financial records that makes up your credit report with that particular bureau. In the event that information on the bureau's report is inaccurate, federal credit reporting laws under the Fair Credit Reporting Act give you the right to contest the information's accuracy. The credit bureau must conduct a "reinvestigation" and attempt to validate the item.

Dispute and Validation

Regardless of whether you file a dispute online or send a dispute via mail complete with thorough documentation that the item in question is inaccurate, the credit bureau assigns your dispute a code. It then forwards the code to the information furnisher that originally reported the disputed entry. It's up to the information furnisher to verify the accuracy of its original report to the credit bureaus. If the information provider's records indicate that the item was not reported in error, it will "validate" the entry to the credit bureau and the error remains on your credit report.

Potential Problem

The problem with this method of validating information is that the credit bureau depends on the information furnisher to either verify or discount the disputed entry's accuracy. The information furnisher only receives a code -- not the full dispute. If the information furnisher's original records were incorrect and the entry is not the result of a computer error, the company will verify an error as an accurate report.

Consumer Options

Consumers have the option of disputing errors directly with the information furnisher rather than through the credit bureau. Doing so allows consumers to provide the company that reported the error with the documentation it needs to correct its records. Once the information furnisher amends its own records, it will amend its previous report to the credit bureaus -- preventing the consumer from having to file a dispute with both the information furnisher and the credit bureaus.

Considerations

Many consumers, unaware of their rights to dispute errors directly with merchants, file repeated disputes with the credit bureaus for the same error. The law, however, gives the credit bureaus the power to refuse to reinvestigate information they previously validated. Thus, the credit bureaus mark repeated disputes as "frivolous" and do not investigate them.

If you have new information about a previous dispute, you can contact the credit bureaus, provide the new information and ask that they reopen the previous investigation. If the original investigation is underway, providing new information gives the credit bureaus an additional 15 days under federal law to consider your information and investigate the accuracy of the disputed data.