How Long Does Creditor Have to Submit Verification of a Debt?
When you dispute a credit report entry with one of the three major credit reporting agencies, the Fair Credit Reporting Act (FCRA) requires the agency to contact the creditor that originally inserted the information and investigate it. If the creditor does not verify its information, the credit reporting agency will assume that the item is incorrect and remove it from your credit records. Creditors have a limited amount of time to either verify or correct disputed data before the reporting agencies delete it.
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Time Frame
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The federal time limit for credit reinvestigations per the FCRA is 30 days from the date the reporting agency received your dispute. If you provide the reporting agency with additional documentation during this 30-day period that the agency deems pertinent to the investigation, it can extend the investigation to 45 days -- giving the creditor additional time to verify its entry.
Consumer Misconceptions
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Consumers often confuse the verification period for creditors during a credit dispute with the debt validation period for collection agencies. Debt validation, however, only applies to third-party collectors and does not involve the credit reporting agencies. During the debt validation period, a collector must provide proof of any debt the consumer disputes as inaccurate. Debt validation is governed by the Fair Debt Collection Practices Act, which does not set limitations on the amount of time a collection agency has to validate an account.
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Considerations
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If a creditor fails to verify its entry's accuracy within the allotted 30 days time frame, the credit reporting agency assumes the consumer's claim is accurate and deletes the information from the individual's credit report. The creditor, however, has the right to reinsert the information at any time provided it certifies to the reporting agency that the information is complete and correct. Should a creditor reinsert previously deleted information, the FCRA requires that the reporting agency notify the account holder of the reinsertion in writing within five days of the date the disputed item reappeared in the individual's credit file.
Frivolous Disputes
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The credit reporting agencies do not honor all disputes they receive. If you send repetitive disputes requesting deletion of the same item, the FCRA allows the reporting agencies to refuse to investigate your dispute. Should a reporting agency mark a claim "frivolous" and not open up an investigation, the creditor that reported the information does not have to verify its accuracy.
Direct Disputes
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When a creditor verifies information to a reporting agency, it only verifies whether the previously reported data matches the data currently present in its records. The creditor does not conduct its own independent investigation to determine whether that data is actually accurate. This can result in a creditor verifying inaccurate information. In order to prevent this scenario, consumers can dispute information directly with the creditor that originally supplied it. If you file a direct dispute with your creditor, federal law requires it to investigate your claim and remove any inaccuracies it previously reported within 30 days.
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