e-OSCAR and Credit Disputes: What You Need to Know if You Report Credit

Everyone makes mistakes, even when it comes to reporting credit. In fact, at least 42 million times mistakes appear on consumer credit reports. A 2012 study by the Federal Trade Commission (FTC) found 20 percent of consumers have verified errors in their credit reports. 

In one in 20 of those cases, the errors are serious enough to result in being denied credit. This means as a business relying upon consumer credit data, you may have denied credit to one of those 10 million consumers with serious, yet legitimate, errors on their reports.

Realistically, there are probably many more errors that consumers either don’t discover or never dispute. There are multiple reasons for consumer credit errors. They can occur at the data furnisher level during the reporting process. The credit bureau can also make a mistake when recording the data. However it occurs, when a consumer discovers an error it usually makes its way through the e-OSCAR system.

Credit disputes and e-OSCAR?

E-OSCAR is a centralized system that manages credit report disputes consumers submit to major credit bureaus and data furnishers. All four credit reporting agencies (CRAs) submit credit disputes to e-OSCAR for processing. The e-OSCAR system simplifies and automates the dispute process for both the consumer and the bureaus. 

Thanks to e-OSCAR, credit disputes involve a three-step process:

1. The credit bureau receives a credit dispute letter.
2. An employee reads the letter and assigns one of e-OSCAR’s 29 three-digit codes to classify the type of error.
3. The employee enters this code along with basic information about the consumer and creditor. They may also enter one or two lines of explanation.

Issues with e-OSCAR?

Credit disputes can be unique and complicated. That’s why critics of e-OSCAR believe neither a three-digit code or two lines of explanation are sufficient. In fact, attorneys encourage consumers to send as much evidence as possible to support their claim. “By including the evidence with your letter (and making copies for your files),” says a report on CreditCards.com, “you are making it much harder for the credit bureau to later claim that the error is your fault because you didn’t send enough information.”

In 2012, the Consumer Financial Protection Bureau (CFPB) reported that credit bureaus found it difficult to upload additional documents to e-OSCAR. The CFPB asked e-OSCAR to make this process easier. In 2014 they reported that e-OSCAR now provided more options for transmitting this information. However, critics still question whether e-OSCAR staff fully review that information when creating the report.

What you need to know about credit disputes

The CFPB and other sources encourage consumers to file credit disputes directly with the credit bureau on whose report they discovered the error. All four CRAs — Equifax, Experian, TransUnion, and Innovis — offer easy online dispute forms for consumers. Consumers can also submit disputes via mail or email. 

Under the Fair Credit Reporting Act (FCRA), the CRA has up to 45 days to resolve the dispute. If the error involves an account with your organization, the credit bureau will usually reach out to investigate the item you reported to them. In fact, the CRAs resolve only 15 percent of complaints without involving the data furnisher. After you provide a response to the dispute, the CRA notifies the consumer of the verdict. Either the error is validated and will be corrected, or they’ve determined there was no error and the item is accurate as listed on the report.

If you need more information to understand the dispute, reach out to the CRA and ask if the complaint came with any supporting documentation. It’s possible that there’s more to the story than the three-digit code in the e-OSCAR report.

Staying accurate

If you’ve been authorized by one or more of the CRAs to report credit, you can register to use the e-OSCAR system. This will allow you to submit any credit dispute reports you receive directly to e-OSCAR. Through the e-OSCAR process, all of the CRAs will be notified of the dispute.

As a data furnisher, it pays to be sure any consumer payment data you submit to the credit bureaus is absolutely accurate. Partnering with a company like Datalinx, LLC will help you submit your data to the bureaus in Metro 2 Format, which is required by all CRAs.

Our credit bureau reporting software will also ensure your data is being sent and received in a timely manner. To learn more about becoming a data furnisher, contact Datalinx, LLC for your no-obligation consultation today.