What is a 623 Dispute Letter?

All American consumers have the right to dispute inaccurate, out-of-date, or mistaken information on their credit and background check reports. This vital right ensures that you are considered for financial and job opportunities fairly and that your identity is kept safe and consistent.

Sometimes, however, creditors – such as lenders, banks, and businesses – make mistakes, then provide erroneous information to the big credit bureaus. In these instances, you may need to file a 623 dispute letter. Read on to learn more about what this means and how it may affect your credit report.

What is Section 623?

Section 623 of the Fair Credit Reporting Act enables all consumers to directly dispute inaccurate information on their credit reports with the original creditors or lending organizations. Here’s a brief overview of how credit information is typically compiled:

• A consumer, such as yourself, takes out a loan or performs some other financial activity
• The other party in the financial activity, like a lender, records important information – such as the balance on the account, whether the debtor pays their bills on time, etc. – and furnishes that information to the credit bureaus and other credit reporting agencies (CRAs). For this reason, lenders and similar organizations are known as credit furnishers
• The credit bureaus take the information from credit furnishers and compile it into credit reports/consumer reports

As you can see, the big credit bureaus and other CRAs receive their information from other parties, not from you. Because of this, credit bureaus may make mistakes from time to time. But the original creditors or credit furnishers can make mistakes as well. Mistakes can include:

• Mistaking your identity with someone else’s
• Providing inaccurate or out-of-date information
• Listing the same negative information twice, like the same debt account
• And more

If left unchecked, these issues can become very serious. They can negatively affect your credit score, limiting your financial opportunities. Or they can make you lose out on other opportunities, like job prospects. In any case, it’s important to fix inaccurate or erroneous information on your credit report ASAP.

623 Disputes Explained

Since Section 623 of the FCRA says you have the right to dispute erroneous info with original creditors, 623 disputes necessarily focus on that activity. In a nutshell, a 623 dispute involves:

• Contacting the original creditor or furnisher of some piece of credit information
• Contesting the validity or accuracy of that information

Say that you look over your credit report and discover that there is a debt listed under your name that you don’t know about. This is negatively affecting your credit report and your employment prospects.

In response, you file a 623 dispute letter with the original creditor or lender. In the letter, you state that you don’t know what the debt is and you request that the creditor validate the debt. If the creditor can’t validate the debt, you request that it be removed from your credit report quickly.

Remember, the FCRA as a whole says that you have the right to be protected from inaccurate or out-of-date information appearing on your credit report at all. If a creditor can't validate a debt or delinquency, like a loan account with a balance still on it, it must legally remove that account from its records of you at the earliest opportunity.

Through 623 disputes, you can fix erroneous information at the source. This might be necessary if you file a credit dispute letter with one of the big credit bureaus, but the bureau itself says that the information is accurate to the best of its knowledge. If you still know it’s inaccurate, you need to move up a level and contact the credit furnisher that provided the bureau with the bad info.

How to Use a 623 Dispute Letter

To use a 623 dispute letter effectively, you need to know when and how to use it in the dispute process.

Imagine that you discover out-of-date information on your credit report, like a debt that you previously paid off but which now has an inaccurate balance dragging down your credit score. Here are the steps you should follow to resolve the issue:

• First, you request a copy of your credit report from the credit bureau(s). After looking it over, you note down the inaccurate or out-of-date information
• Next, you file a dispute with the credit bureau that noted or recorded the inaccurate information via a traditional dispute letter. The dispute letter includes details so the credit bureau can fix the inaccurate info quickly
• Within 30 days, the credit bureau gets back to you per FCRA regulations. However, the credit bureau says that the info you say is out of date is accurate according to its records. It refers you to the creditor that provided it with the information
• To resolve the issue, you contact the original creditor responsible for the delinquent account and file a 623 dispute letter. In the letter, you break down your reasons for believing the information is out of date or false and request that it be validated. If not, you request that the out-of-date information be removed from the report
• The original creditor takes a closer look at its records, discovers the mistake, and acknowledges it. The original creditor then removes the wrong information from its furnishing report, so the credit bureaus update their records accordingly

To recap: 623 dispute letters are filed with original creditors or credit furnishers, not the big credit bureaus or consumer reporting agencies.

Writing a 623 Dispute Letter

In any 623 dispute letter, you need to be sure to include all relevant information and be as specific as possible. With subjects as technical as consumer reports, the more detail you can provide, the better. 

Assume that creditors and credit furnishers want to provide accurate information to the credit bureaus and that any mistakes are accidental rather than malicious. To that end, the more detail you give the credit furnishers, the faster they'll be able to validate their own records.

Your 623 dispute letter should include:

• Your identifying information, including your name, address, etc.
• A copy of the credit report or other documents you’ve used to identify the inaccurate info
• A written request that the creditor or credit furnisher investigate their records and validate the debt or line item in question
• A written request that the creditor or credit furnisher remove the negative line item if it cannot be validated

Again, the more information you can provide the credit furnisher, the faster the process will be. It can be difficult to know what exactly you should provide or how you should draft your letter, however.

Therefore, you should contact consumer rights attorneys right away. The right law firm, like Fair Credit, can help you draft an effective 623 dispute letter, as well as determine to who you should submit it. More than that, we'll break down your legal options if the original creditor refuses to conduct an investigation or correct inaccurate info.

Wrap Up

Ultimately, a 623 dispute letter is a distinct legal request sent not to credit bureaus or consumer reporting agencies but to original creditors. With a 623 dispute letter, you ask a creditor to double-check the accuracy of a debt or delinquency and request that the debt or delinquency be removed from your credit report if it can't be validated.

If you need help drafting or filing a 623 dispute letter, there’s no better team to ask than the knowledgeable consumer rights attorneys at Fair Credit. Our legal team can get started working on your case right away, so contact us for more information.