What Is a 623 Dispute Letter for Credit Reporting?

A 623 dispute letter is a specific communication used to challenge inaccurate information appearing on a credit report. This letter is sent directly to the data furnisher, which is the original source of the information, such as a creditor or lender. The primary purpose of this letter is to initiate an investigation into the disputed entry, aiming to correct or remove any errors that could affect an individual’s financial standing. It serves as a direct approach for consumers seeking to ensure the accuracy of their credit reporting.

Understanding the 623 Dispute Letter

A 623 dispute letter is a formal request sent by a consumer directly to the data furnisher, the entity that provided information to a credit reporting agency. This differs from disputes filed solely with credit bureaus, as it targets the original source of the reported data. This direct engagement can lead to more efficient resolutions for inaccuracies.

The legal foundation for a 623 dispute letter is the Fair Credit Reporting Act (FCRA), Section 623. This section outlines data furnishers’ responsibilities to ensure the accuracy of information supplied to consumer reporting agencies. Furnishers are prohibited from providing information they know or have reasonable cause to believe is inaccurate. They must also have procedures to correct and update incomplete or inaccurate information.

Consumers use this letter to directly challenge specific items on their credit report that they believe are incorrect, outdated, or unverifiable. This direct approach leverages the furnisher’s obligation under the FCRA to investigate disputes. The goal is to prompt the furnisher to review their records and, if an error is found, to notify the credit bureaus to correct or delete the inaccurate information.

Crafting Your Dispute Letter

Preparing a 623 dispute letter requires careful attention to detail. Gather all relevant personal identification, including your full name and current address. Include the specific account number and the name of the creditor or data furnisher associated with the disputed item. Clearly state the exact information you are disputing and provide a precise reason why you believe it is inaccurate, incomplete, or unverifiable.

The letter should explicitly request a specific action, such as the correction or deletion of the erroneous entry from your credit report. Referencing this section of the FCRA emphasizes the legal basis of your dispute and the furnisher’s obligations. Maintaining a concise, factual, and well-organized structure helps convey your message clearly.

Supporting documentation is a crucial component of your dispute. This can include copies of financial statements, payment records, cancelled checks, police reports for identity theft, or previous correspondence. Send only copies of these documents, retaining all originals for your records. Attaching a copy of your credit report with the disputed items circled or highlighted can also be beneficial in directing the furnisher’s attention.

Sending the Letter and Awaiting a Response

Once your 623 dispute letter and all supporting documentation are prepared, send your letter via certified mail with a return receipt requested. This method provides proof of mailing and confirmation of delivery. Always keep a complete copy of the sent letter, all enclosures, and the certified mail receipts for your records.

Data furnishers have specific legal obligations under the FCRA regarding the investigation and response to consumer disputes. Upon receiving a valid dispute, the furnisher is required to conduct a reasonable investigation into the disputed information. This investigation must be completed within 30 days of receiving the dispute notice.

The furnisher must review all relevant information provided by the consumer with the dispute notice during their investigation. While awaiting a response, the furnisher is bound by these timelines to complete their review and notify you of their findings.

Potential Outcomes of a 623 Dispute

After a data furnisher completes its investigation of a 623 dispute, several outcomes can affect your credit report. If the investigation confirms the information was inaccurate, incomplete, or unverifiable, the furnisher is obligated to promptly notify each credit reporting agency. This notification includes the necessary corrections, leading to the update or deletion of the disputed entry from your credit report.

Alternatively, the furnisher may verify the information as accurate. They will report the results of their investigation. If the furnisher determines the dispute is frivolous or irrelevant, they must notify the consumer of this determination within five business days, explaining the reason and any information needed for a valid dispute.