Tristan Powys (Credit Manager) @ Lucid Living
In our first installment on this segment, we shared our insight on what errors to look for in your credit report and how to lodge a dispute with the credit bureaus.
In this second part, we highlight the obligations of the credit bureaus when investigating and resolving your dispute – as set out in the National Credit Act (NCA) – and the implications of a dispute on your credit applications.
5. Resolution of Dispute.
In terms of the NCA, the credit bureau has 20 days to investigate your dispute and respond to you with the outcome of the investigation.
Any data you provided about the inaccuracy of the information will be forwarded to the original information provider. The information provider is then required to investigate and respond back to the credit bureau.
Once the investigation is complete, the credit bureau must notify you of the outcome, along with a free copy of your credit report if the dispute resulted in a change.
The credit bureau must also send a correction notice to any company that accessed your credit report. You are advised to request the credit bureau to furnish you with proof, that this has been done.
6. Implications of a dispute.
When the credit bureau receives notice of your dispute, they will place a dispute code in your credit report indicating that certain items are under dispute.
Some lenders may have rules in place that require additional review for any credit reports on credit applicants that have dispute codes on the credit report. Other lenders simply decline all credit applications, where the credit report has a dispute code.
In addition, many credit scores have special logic incorporated that will by-pass the disputed information for some of the credit attributes the score considers. Other less sophisticated credit scoring systems may not account for this fact and (as a result of the dispute code) generate a high risk credit score – which could disqualify you.
Once the dispute is resolved, the dispute code is removed or replaced to reflect the latest status.
We therefore recommend that you DO NOT apply for any new credit, until your dispute has been resolved. Alternatively, that you notify the lender of the nature of the dispute, so that they may process your application manually.
7. Why dispute with every credit bureau?
If you see errors on your credit report from one of the credit bureaus, it is probable that the same inaccurate information is being reported to the others.
Note, the credit bureaus have an electronic system to facilitate the sharing of dispute resolutions amongst each other to help ensure accuracy of your information across all of them. However, in practice they do not use the system judiciously (or selectively according to our experience) and only update their records when a dispute is lodged directly with the particular credit bureau.
For peace of mind, you may want to check that any inaccurate information that has been corrected has been done so at all the credit bureaus.
For years, credit bureaus and their practices were a mystery to consumers. Yet, the credit bureaus, by virtue of the information they report about you, influence your access to credit, money and wealth creation. Through these articles we aim to create greater transparency of the inner workings of the credit bureaus – so that you know your rights and the credit bureaus are accountable to you.