Understanding your credit report and credit monitoring: What does “Account information disputed by consumer” mean?
On your credit report, in each of your creditor accounts, is a section called “creditor remarks”. Keep a close eye on this. Creditor remarks can give you valuable insight in to how your creditors are handling your account. Certain remarks from creditors can affect your credit score and other remarks won’t.
Today we will examine what it means to have a creditor post “Account information disputed by consumer” in creditor remarks, and if it affects your credit score.
Generally, a creditor posts this remark to your credit report because of an action initiated by you. Maybe the creditor is reporting an account that is not yours and you are the victim of identity theft, or, there might be an error in the amount owed.
The Fair Credit Reporting Act governs how credit bureaus are required to handle consumer disputes: § 611. Procedure in case of disputed accuracy [15 U.S.C. § 1681i]. They are required to post to the creditor all dispute information within five business days of receipt of your dispute.
§ 623. Responsibilities of furnishers of information to consumer reporting agencies [15 U.S.C. § 1681s-2] (a).3 states that creditors must report “Account information disputed by consumer” if they do not agree with your dispute. This remark would appear on your credit report within thirty days and stay on your account until it is no longer reported. Usually accounts are reported for 7+ years.
There is no date when this creditor remark was posted, which means that future creditors will not know if your dispute was a month ago or four years ago. They will not know if your dispute was directly to your creditor or to a credit bureau.
This means there is no way for credit scoring to adjust your credit score, either good or bad, with a creditor remark of “Account information disputed by consumer”.
FICO makes no mention of this in their overview of factors considered, or not considered, in credit scoring: http://www.myfico.com/Downloads/Files/myFICO_UYFS_Booklet.pdf
Also, there is no such thing as a dispute period shown on a credit report. True, credit bureaus and creditors are required to respond within thirty days to your dispute, but that is their requirement and is not reflected anywhere on your credit report. Remember, your credit report does not contain a date of original dispute; there is simply no way for a lender or scoring agency to calculate a dispute period.
This also means that while your dispute is being resolved, your credit score is NOT artificially high, created by credit scoring calculations somehow skipping an account in a fictitious dispute period. Despite reports to the contrary, this simply does not happen. Can you imagine the havoc unscrupulous credit repair companies could wreak on the credit reporting system? There is simply no evidence anyone is promoting this tactic. Note this report to congress in 2006 where there is no mention of this: http://www.ftc.gov/os/comments/fcradispute/P044808fcradisputeprocessreporttocongress.pdf
This also means potential lenders do not wait until disputes are resolved unless they have first hand knowledge of it, again, because they cannot see a dispute-originated date.
What if a mortgage lender does a manual review of one’s credit report because my credit scores did not qualify me?
In rare cases, if one is not qualified for a mortgage and a lender wants to do a manual review of the credit report, that lender may have a question about “Account information disputed by consumer” in creditor remarks. Lenders know about identity theft and errors on credit reports, so this is an opportunity for the consumer to show that he/she is proactive about their credit health. It is perfectly normal for a lender to ask for clarification during a manual review, but it should not have any impact one way or another.
David B. Coulter – Founder and C.E.O. of SmartCredit.com