How the Credit Dispute Process Works – Metro 2, e-OSCAR and ACDVs

credit dispute process on credit report

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Your rights under the Fair Credit Reporting Act include disputing any false or inaccurate information found on your credit reports. By regularly monitoring your files through the three major credit reporting agencies, Equifax, Experian and TransUnion, you can clear up inaccurate information using the credit dispute process.

Taking control of your financial data and improving your credit score opens opportunities for new loans and credit lines. Factors demonstrating you’re a deserving borrower are reported to the three major credit bureaus through the Metro 2 and e-OSCAR systems.

Most financial institutions providing credit cards, car loans and mortgages report your activity each month. Because of the large volume of data being sent, mistakes may occur. By staying on top of your credit reports and ensuring their accuracy, you’re providing a valuable service to yourself and to potential lenders.

The Indirect and Direct Dispute Methods

An indirect dispute involves contacting the credit reporting agency that shows the inaccurate information on your report. The credit bureau is required to conduct an investigation into the validity of your claim and interface with the parties supplying your data.

The direct credit dispute process involves contacting the data furnisher itself; instead of contacting the credit bureau, you contact the creditor that sent inaccurate information about you to the reporting agency. Companies must honor your request and perform an investigation to determine the accuracy of the information they report to the credit bureaus.

The Metro 2 and e-OSCAR Reporting Languages

Companies supply information to credit bureaus using language specially formatted for electronic reporting. Each month, for example, when you submit your payment, your creditor may report it to a credit bureau using the Metro 2 language.

Data furnishers and credit bureaus generally communicate with each other using e-OSCAR when they need to resolve disputes initiated by borrowers. Inaccurate information found on your credit report can be fixed quickly using this language, which is an automated browser-based software system. The system processes dispute requests known as Automated Credit Dispute Verifications, which are generally referred to as ACDVs.

The Basics of Metro 2

The Consumer Data Industry Association created Metro 2 in 1997 as a standardized electronic language for businesses communicating their borrowers’ information to the credit bureaus. By following the Credit Reporting Resource Guide, companies enter and transmit information using Metro 2’s system of alphanumeric characters.

Using Metro 2, a creditor’s employee enters alpha or numeric symbols into an electronic terminal. The encoded characters transmit your account information and payment history into specified fields on your credit report. In some cases, however, high workloads may cause creditors’ employees to enter information incorrectly. It is not uncommon for an unexpectedly lowered credit score to be the result of human error.

The Role of e-OSCAR

To help automate the credit dispute process, the three major credit bureaus created the specialized software system that communicates data through the universal language known as e-OSCAR. The acronym stands for Online Solution for Complete and Accurate Reporting.

Because of the high volume of mistakes made using the initial and now discontinued Metro 1 system, the bureaus needed a more efficient method to respond to disputes and make corrections. The e-OSCAR system provides a streamlined approach that can help ensure credit reports reflect accurate information.

How Filing an Indirect Dispute With a Credit Bureau Works

When you spot an error or a discrepancy on your credit report, it can be in your best interests to contact the credit bureau that issued the report and start the indirect credit dispute process. TransUnion, Equifax and Experian all provide dispute forms on their websites. You can also mail them the relevant information.

When the credit bureau receives your request, an employee chooses a three-digit e-OSCAR numerical dispute code and assigns it to your claim. Each of the system’s code numbers categorizes the nature of your dispute. The code “001,” for example, means an account showing on your report doesn’t belong to you. Code “038” is a claim covering an account you closed voluntarily.

What Happens After Filing an Indirect Dispute

After receiving your dispute, the credit bureau communicates the information to the data furnisher with an ACDV form. The ACDV requests verification of the credit data being questioned. The creditor then uses the browser-based e-OSCAR system to review the data and its assigned code. Your account information is reviewed internally by your creditor to determine whether your dispute claim should be verified or refused.

If it proves to be a valid claim, the data furnisher updates and transmits the correct information back to the credit bureau. The reporting agency then updates the data on your credit files. Companies must conduct an investigation within 30 days and respond to your concerns with an updated credit report.

Good Credit Is a Vital Asset

A good credit score and the information on your credit report can be vital factors in your ability to purchase a home, vehicle or move forward in life. We can help. Contact one of our experienced team members to learn how we can assist you in reaching your financial goals.

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