Credit Report Disputes Credit Score Improving Your Score

Behind The Scenes of The Credit Report Dispute Process

Written by John Ulzheimer

The Fair Credit Reporting Act (FCRA) gives you the right to expect the items on your credit reports to be accurate. However, the truth is that credit report errors still occur. Thankfully when errors and mistakes do pop up on your credit reports the same law which gives you the right to expect accurate credit reports also gives you the right to challenge any item on your credit report you believe to be incorrect. This challenge process is known as a “dispute.” Here is a step-by-step look at what the credit report dispute process looks like behind the scenes.

Submitting the Dispute

Step one in any credit report dispute process begins when you, the consumer, notify an appropriate party that you disagree with an item on your credit report(s). The dispute is most commonly submitted to the credit reporting agencies (CRAs) themselves (Equifax, Trans Union, and Experian) and can be initiated via mail, online, by fax, or over the phone. However, many consumers do not realize that you can also initiate a dispute directly with the company who supplied the allegedly inaccurate information to the credit reporting agencies – aka the “data furnisher.” Additionally, if you have already filed a dispute with the credit reporting agencies directly you also have the right to file a concurrent dispute with the Consumer Financial Protection Bureau (CFPB).

“In Dispute”

Whenever you dispute an item on your credit reports with the credit reporting agencies they are required by the FCRA to mark the item in question as “in dispute” on your credit reports. If you initiated your dispute directly with the data furnisher then they are required themselves to notify all 3 credit reporting agencies that the item is being challenged and must be marked as “in dispute.” In order to add the “in dispute” notation to an item on your credit reports a 2-character Compliance Condition Code, the “XB” code to be exact, is appended to the item in question. When the “XB” code is attached the account will appear on your credit reports with a statement which reads something along the lines of “Consumer disputes, investigation in process.”

The Investigation of Your Claim

If you initiated your dispute with a credit reporting agency directly then the next step of the dispute process occurs when the CRA takes over and the actual “investigation” of your claim begins. First, your entire dispute is homogenized into a 3-digit code, a code that will be used to communicate your dispute with the data furnisher. There are several of these dispute codes but most disputes revolving around the consumer claiming the account isn’t theirs, the balance is incorrect, or the account was never late.


The CRAs use an online system known as e-Oscar (Online Solution for Complete and Accurate Reporting) to facilitate the handling of the millions of disputes they receive from consumers every year. First, an ACDV form (Automated Consumer/Credit Dispute Verification) is filled out with the 3-digit code used to describe your dispute and sent to the data furnisher via the e-Oscar system. The data furnisher is tasked with the responsibility of looking into the claim and either verifying the account as accurate or instructing the CRA to update or delete the account. The same ACDV form will be used to detail the data furnisher’s findings and will be sent back to the CRA, again via e-Oscar.

The Results

Once the CRA receives a response from the data furnisher your credit report will be updated. If the account was verified as being reported accurately then the only changes that will take place are the “XB” code being removed from your report and the “date reported” updated to the then current date. However, if the data furnisher agrees with your dispute then the account would be either updated to reflect different information or deleted from your report entirely. Additionally, if the data furnisher failed to respond to the CRA within the time allowed under the FCRA then the item in question would be deleted due to the lack of response. Regardless of the outcome, the CRA is required to send you the results of your dispute once the process has been completed.

About the author

John Ulzheimer

Leave a Comment