What Happens When You Investigate an Account With a Credit Reporting Agency?
by James Charlet
There is a lot of misinformation, especially on the World Wide Web, that pertains to the rights and responsibilities of credit reporting agencies (i.e. Experian, Equifax, Transunion, Innovis, CSC) and consumers (i.e. you) when it comes to what they do and do not have to do with credit report disputes. In particular, how long to companies have to respond to investigations and what happens when they do not respond. All of this can be found in the body and associated legal briefs of the FCRA. The FCRA (Fair Credit Reporting Act) gives very particular guidelines that have already been reviewed through a wide body of case law to direct interpretation and enforcement.
First of all, the time frames are very easily explained. When a consumer disputes the accuracy of a trade line on one of their credit reports, there are three ways they can directly begin an investigation: phone, internet, and mail. If an investigation is initiated by phone, the disputes are entered by either a company representative or automated system directly into the dispute response system. This system then distributes, almost instantaneously in most cases, to each lender reporting a disputed trade line, the reason for the customer’s dispute and a request for response. That lender then has 30 calendar days to respond back to the credit reporting agency. When they do respond back, whether in the affirmative or negative, the credit reporting agency has 5 business days to put the reports together and send them to the consumer, either by mail, or, if the consumer has authorized it, by email. Obviously, if the report is sent by mail, there will also be mail time on the back end before the consumer sees the results. If the request for investigation is made through the internet, the exact same process applies and the time frames described above will apply. There are slight differences that come into play when mail is the chosen method of delivery.
When a consumer sends a request by mail, there are several other factors that have to be considered to establish expectations for the receipt of responses. First of all, depending on where a consumer lives, there is going to be some mail time at the front end before the agency receives the dispute. Once they do receive the mail, there are a number of controls they have in place to insure it gets processed, tracked, and stored in accordance with policy including bar coding, individual dates and numbers, and FTC compliance stamps. It is extremely unlikely that anything mailed to a credit reporting agency would not be properly addressed and responded to, even if the response is simply a one page stall letter. In any case, all of this procedural insurance takes time, and therefore, the agencies are granted five business days to process a mail dispute once they receive it. After that time, the processing time for mail is exactly the same as for the other two methods. When you total these up, it is easy to see where a response to a mailed dispute could take 45-60 days to make it back to the consumer.
That time frame can also be changed through a few other slightly less common scenarios. Under FACTA (the Fair and Accurate Credit Transactions Act), each consumer was given the right to get one free credit report each year from the three largest credit reporting agencies. As a concession for the potential influx of credit disputes this could cause, the government allowed for 15 extra days to be given for investigations initiated from a free annual credit report. Also, if a consumer sends a subsequent investigation for the same account during the thirty day investigative period, an additional 15 days can be taken to consider the additional disputes. On the other hand, in the state of Maine, the state’s credit reporting act allows for only 19 days to complete an investigation. Of course, that is only good for residents of Maine. Finally, there is what is internally referred to as a “consent decree” between the FTC and the credit reporting agencies that allows for extra business days for each federal holiday or allowed corporate day off that the CRA takes. For example, some credit repair companies claim that they have better success during the winter holidays because “none of the agencies work on Christmas.” This is a falsehood. The FTC gives the agencies two additional business days for Christmas, Thanksgiving, and New Years. An investigation sent by mail on November 22 could, conceivably, have six extra business days to be completed.
Although consumer’s rights need to be protected, and sometimes having to wait for almost two months is definitely not something a person wants to do, the fact is that the time frames described above are rights that have been granted to the credit reporting agencies and there is no legal way to force them to move any faster. This is definitely another reason why it is a good idea to check your credit report for errors several months before you plan to make a large purchase. Be sure to give yourself enough time to properly investigate an discrepancies so that you do not end up paying thousands of extra dollars in interest that you should not have to pay.
Break Down of Times:
- Mail time: 3-5 business days
- Processing Time: 5 business days
- Investigation time: 30 Calendar Days
- Compile Response Time: 5 business days
- Mail time on the back end: 3-5 business days
Other Considerations:
- Extra Time if Another Investigation Arrives: 15 calendar days
- Extra Time if Disputing a Free Annual Report: 15 calendar days
- Extra Time for Holidays: 1 business day for each allowed day off
Less time:
- Residents of Maine: 19 calendar days instead of 30
- Investigations with Proof: 15 calendar days unless proof is declared invalid
- Requests for description of investigation: 15 calendar days
- Requests to Investigate that are frivolous: 15 calendar days to notify
- Requests to investigate info not on file: 15 calendar days to notify
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