If you are working to repair your credit, you’ve likely spent extensive time trying to remove negative items from your credit report. Various options exist to initiate a dispute (phone, online, by mail), but the credit reporting agencies typically prefer officially mailed letters.
This process of disputing an item by mail involves sending customized dispute letters to the credit bureaus, either by writing them yourself or paying a credit repair company to help with the process.
After putting in the effort, it can seem discouraging to receive notice that your challenge to the item (or items) on your credit report was not accepted by the credit reporting agencies because the information furnisher verified the item in question on your credit report.
Unfortunately, one of the main reasons some valid disputes do not receive proper investigation by the credit bureaus has to do with the e-OSCAR system the major credit reporting agencies use to investigate and categorize these challenges.
Here we’ll tell all the important things to know about the e-OSCAR system, how it works, the issues with it, and the steps you can take to ensure your credit report dispute receives the attention it deserves from the credit reporting agencies.
What is e-OSCAR?
The e-OSCAR system is an automated credit dispute system created, owned, and used by all major credit reporting agencies. These major credit reporting agencies include Equifax, Experian, Trans Union, and, most recently, Innovis.
The acronym OSCAR stands for Online Solution for Complete and Accurate Reporting. Its development came about in 1993 as a way to manage the staffing required by the credit reporting agencies to process consumer dispute claims.
Under the Fair Credit Reporting Act (FCRA), consumers have the right to dispute errors on their credit reports with the credit bureaus. Since at least 1 in 5 consumers has an error on their report, the number of dispute complaints filed proved overwhelming for the reporting agencies.
The e-OSCAR system helps categorize disputes and sends an Automated Credit Dispute Verification (ACDV) form to check with original creditors regarding the disputed information.
How Does e-OSCAR Work?
The primary function of the e-OSCAR system is to assign a three-digit code to each filed dispute and send that information through the ACDV form within e-OSCAR to the proper information furnishers (i.e., credit card companies, mortgage companies, collection agencies, etc.). These three-digit codes represent various categories, such as claims that the account was fraudulent, bankruptcy claims, or that the customer paid the amount or the creditor reached a settlement with the customer.
The e-OSCAR system works as follows:
- The consumer initiates a challenge or dispute with the credit reporting agencies to a negative item (or items) on their credit report that affect their credit rating. The consumer completes this step by phone, online, or through a formally mailed letter.
- A credit bureau agent reviews the dispute and converts it into an Automated Universal Dataform (AUD) using one of the 29 three-digit codes available within the e-OSCAR system.
- The e-OSCAR system automatically sends this information (the code and a few lines of extra information) via an ACDV form to the appropriate information furnishers.
- The information furnisher reviews the ACDV and returns the form to the credit reporting agency that sent it over, with updated information (if applicable) regarding the consumer credit history. Basically, they indicate whether the information is accurate or not accurate.
The following table shows you the all the data code options that e-OSCAR uses to categorize all disputes:
e-OSCAR Verification Codes
| Code | Explanation | Code | Explanation |
| 001 | Not his/hers | 041 | Claims victim of natural or declared disaster |
| 002 | Belongs to another individual with same/similar name | 100 | Claims account deferred |
| 006 | Not aware of collection | 101 | Not liable for account (i.e., account belongs to ex-spouse, business, etc.) |
| 008 | Late due to change of address and never received statement | 102 | Account reaffirmed or not included in bankruptcy |
| 010 | Settlement or partial payments accepted | 103 | Claims true identity fraud/account fraudulently opened |
| 012 | Claims paid the original creditor before collection status or paid before charge-off | 104 | Claims account take-over, fraudulent charges made on account |
| 014 | Claims paid before collection status | 106 | Disputes present/previous account status/payment history profile/payment rating |
| 019 | Included in the bankruptcy of another person | 107 | Disputes special comment/compliance condition code/narrative remarks |
| 023 | Claims account closed | 108 | Disputes account type or terms duration/ Terms frequency or portfolio type disputed |
| 024 | Claims account closed by consumer | 109 | Disputes current balance |
| 031 | Contract canceled or rescinded | 110 | Claims company will change |
| 037 | Account included in bankruptcy | 111 | Claims company will delete |
| 038 | Claims active military duty | 112 | Claims inaccurate information |
| 039 | Insurance claim delayed | ||
| 040 | Account involved in litigation |
As you can see, these codes cover various issues related to credit disputes but provide little leeway for those credit disputes that do not fall neatly into one of these e-OSCAR categories.
Problems With the e-OSCAR system
The e-OSCAR system, like any automated system, is not without problems that negatively affect the consumer and can lead to frustrations in the credit repair process.
The first problem comes with assigning the e-OSCAR code to individual submitted credit disputes. An investigator at the credit reporting agency performs this assignment and decides which code to use within a few minutes (usually less than 4).
This method introduces an element of human error. Also, it indicates that all credit disputes do not receive the thorough review the consumer expects when submitting it, especially those with accompanying supplemental information.
Once the investigator assigns the code to the dispute in the e-OSCAR system, the system automatically transmits it to the information furnisher, but without any of the supporting supplemental documentation that the consumer sent. Often, the only explanation included is a brief description of the dispute entered by the investigator.
Therefore, the information furnisher receiving the dispute from e-OSCAR decides to verify or not verify the item without really having all of the required details and documentation. Often the supporting documentation would contain the proof that the information furnisher needs to confirm that the credit reporting agency should remove the error from the consumer’s credit report.
Another issue with the e-OSCAR system is how the credit bureau investigators utilize the 29 codes. A report submitted before the House Committee on Financial Services in 2007 indicated that the major credit reporting agencies utilized the same four codes in approximately 90% of the disputes sent by e-OSCAR.
This percentage breakdown suggests that investigators default to using specific codes without thoroughly reviewing all the information. It also indicates that credit bureau investigators likely miscategorize many credit report disputes.
A miscategorized claim can cause the process of fixing or removing the error from the consumer’s credit report to take longer than it needs to take.
Finally, the ACDV form sent out by e-OSCAR is the form that Equifax uses for every single credit dispute investigation.
This fact means that Equifax handles all credit report disputes from customers with the e-OSCAR method, and many do not receive the reasonable investigation required by law. Instead, the credit bureau simply repeats the consumer’s dispute claim to the appropriate information furnisher. The same holds true for the forms sent by TransUnion and Experian.
e-OSCAR FAQ
Have There Been Any Changes To the e-OSCAR System to Improve the Dispute Process?
Yes, the Consumer Financial Protection Bureau (CFPB) acknowledged in December of 2012 that the e-OSCAR system did not provide any way for credit reporting agencies to provide information furnishers with the supplemental documentation provided by consumers during the credit dispute process.
As a result of this acknowledgment, an upgrade to the e-OSCAR system now allows credit reporting agencies to submit any supplemental documents from consumers to the information furnishers.
The question remains whether the credit reporting agencies utilize this upgrade or still submit the majority of credit disputes without the documentation.
Is There Anything Consumers Can Do To Ensure Credit Bureaus Properly Investigate Their Credit Dispute?
Under the Fair Credit Reporting Act (FCRA), consumers have the right to request that the credit reporting agency provides them with the “method of verification” used during the dispute investigation when a disputed item returns as “verified.”
Submit this request to the appropriate credit reporting agency in writing, indicating that you are exercising your rights under the Fair Credit Reporting Act for them to provide specific information that indicates proper investigation of the dispute request.
Under the law, the credit reporting agency must provide the information regarding the method of verification within 15 days of the consumer’s request. If they do not respond, you can pursue legal action or make an official complaint with the CFPB requesting deletion of the item from your credit report because the credit reporting agency did not comply with the law.
How Can I Improve My Chances that My Dispute Will Be Properly Investigated?
Because of issues with the e-OSCAR system and many consumers not fully knowing the rules around credit reporting or credit repair, the entire process can seem overwhelming. Many consumers might give up when they receive notice that the creditor verified the disputed item.
You can improve the chances that the credit reporting agencies will handle your dispute correctly and better deal with e-OSCAR issues by utilizing a reputable credit repair service to assist you with the dispute process.
Wrapping It Up
Most consumers are unaware that when they file a dispute with any major independent credit bureaus, whether, by phone, email, or mail, the e-OSCAR system handles most of the process.
Although this automated system has helped the major credit reporting agencies streamline their processes and reduce the amount of staffing necessary to address the influx of credit disputes received, it can prove problematic in some instances.
If you submit a credit report dispute without utilizing the services of a credit repair company and receive notice that your dispute was “verified,” you may want to investigate it further. Consider whether the e-OSCAR system negatively affected your challenge or if the credit reporting agency violated your rights under the Fair Credit Reporting Act and pursue it accordingly. When it comes to financial decisions, ensuring you have the best information possible will give you the best chance of improving your financial health.
