Emmediate Credit Solutions
E-OSCAR Explained

What does E-OSCAR stand for?

Electronic Online System for Complete and Accurate Reporting.

e-OSCAR is a web-based, Metro 2 compliant, automated system that enables Data Furnishers (Credit Issuers like Bank of America Visa Credit Card and Collection Agencies like NCO Financial), and Credit Reporting Agencies (CRAs) to create and respond to consumer credit history disputes (the Dispute Letters that you mail to them).

Credit Reporting Agencies (CRAs) include Equifax, Experian, Innovis and TransUnion, their affiliates or Independent Credit Bureaus and Mortgage Reporting Companies. e-OSCAR also provides for Data Furnishers (DFs) to send “out-of-cycle” credit history updates to Credit Reporting Agencies (Equifax, Experian, Innovis and TransUnion).

The system primarily supports Automated Credit Dispute Verification (ACDV) and Automated Universal Dataform (AUD) processing as well as a number of related processes that handle registration, subscriber code management and reporting. This system was created to reduce the overhead caused by about 20 thousand dispute letters received by the CRAs every day.

This is what Credit Bureaus should do when they receive a Dispute Letter:

After this section you will find the real process followed by Credit Reporting Agencies (Credit Bureaus) using e-OSCAR.

  1. An employee at the Credit Bureau receives the dispute and personally reviews it. During this review they gather information and documents in regards to the disputed account by contacting the original creditor or collection agency (Data Furnisher).
  2. The Credit Bureau Employee then reviews copies of original documents like the Credit Application, Billing Statements, Billing and Payment Statements or notes in the account looking for any errors in reporting. If anything is in question they will request proof from the “Data Furnisher.”
  3. Once a full investigation has been completed, the Credit Bureau Employee will then update the consumer’s account according to the results of the investigation.
This is how the Credit Reporting Agencies (Credit Bureaus) process dispute letters received via mail thru the e-OSCAR system.
  1. The Credit Reporting Agency receives the Credit Dispute sent by YOU in representation of the Consumer (like it was sent “by the Consumer”).
  2. Using e-OSCAR, the Credit Dispute Letter is scanned (using fast commercial scanners), producing an electronic “image” of the letter.
  3. Using Optical Character Recognition (OCR) technology, e-OSCAR converts the “image” of the Credit Dispute Letter to “plain text” (like the one entered in Microsoft Word or NotePad in your computer).
  4. The dispute letter, now in plain text, is compared against a boiling plate of the most common dispute letters managed by the Credit Reporting Agency. At this point, the formatting of the text is left behind and the advanced algorithms make sure your Dispute Letter does not match one of the letters marked as “repetitive”.
  5. This step allows the Credit Reporting Agencies to decrease the number of disputes that must be processed, among the more than 20 thousand disputes received everyday, reducing the overall cost of dispute processing which rounds the $4.50 per dispute.If your dispute letter passes the filtering process, an Automated Credit Dispute Validation (ACDV) is initiated by a Credit Reporting Agency on behalf of the consumer and it is routed to the appropriate Data Furnisher. Once the The ACDV is returned to the initiating CRA with updated information (if any) relating to the consumer’s credit history. If an account is modified or deleted, carbon copies are sent to each CRA with whom the DF has a reporting relationship
  • If your dispute letter passes the filtering process, an Automated Credit Dispute Validation (ACDV) is initiated by the Credit Reporting Agency on behalf of the consumer and it is routed to the appropriate Data Furnisher via e-OSCAR.
  • If your dispute letter is rejected by the filtering process, a Response Letter is sent to the Consumer (your Client) identifying the dispute as “Frivolous”.
    6. The Data Furnisher receives the Automated Credit Dispute Validation and investigates the facts.
   
    7. Within 30 days, the Data Furnisher must send via e-OSCAR to the Credit Reporting Agency the result of the investigation.
Once the Automated Credit Dispute Validation is returned to the initiating Credit Reporting Agency with updated information (if any) relating to the consumer’s credit history. If an account is modified or deleted, carbon copies are sent to each Credit Reporting Agency with whom the Data Furnisher has a reporting relationship. Then the Credit Reporting Agency communicates the results of the investigation to the Consumer (your Client).
How Do Lenders Read Credit Reports?

How a Credit Report is Interpreted by Lenders and other entities. Hope this will help you out on your way back to credit worthiness.

A credit report only relays the history of your clients’ dealings with creditors. However, one needs to look more closely. There’s information in the report that may seem innocent to your client but not to potential creditors or employers. This includes information like:

  •     Inquiries - Every time your client applies for a credit card to get a free travel mug, duffel bag, or T-shirt, the client is adding another hard inquiry to his/her credit report. When potential lenders see these inquiries, they may wrongly conclude that your client is either in some sort of financial situation where he/she needs a lot of credit, or is planning to take on a large debt. Either can flag your client as a high credit risk. Other types of inquiries, such as your clients requests to view their report, employer requests to view the report and requests by marketers to get your clients names in order to sell your clients something, count as soft inquiries. These inquiries don’t show up on the reports that lenders see, and therefore do not affect how they view your client’s credit. Also, advice your client to watch out when he/she is car shopping or mortgage shopping. Make sure your client does not let the car dealer or mortgage broker run his/her credit unless your client is going to be buying from them. While the FCRA allows these types of multiple credit inquiries that are within seven to 14 days of each other to be counted as a single inquiry, your client would have to be careful of timing to make sure he/she does not have multiple inquiries show up. So, how many hard inquiries is it possible to have without a problem? Some experts say that if a person has 10 credit card inquiries in six months, that will probably scare a lender. Others experts say that as few as six credit card inquiries in six months can label a person as risky. Inquiries that are older than six months may not be looked at as strongly because if the person actually sets up the loan or opened the credit card account, those accounts would now be showing up on the report as well. The newer inquiries might lead the lender to think that your client actually has the credit accounts available now but they haven’t shown up on the credit report yet. Most inquiries drop off of your client’s report after two years.
  •     Open credit accounts - Another thing to watch out for as your client gathers all of those free mugs and duffel bags is that even though your client may have forgotten about them, accounts your clients don’t use still count toward their total available credit. Just as with the hard inquiries we’ve talked about, these can indicate to a potential lender that your client could easily put him/herself into financial danger with all of that readily available credit. According to TransUnion and Experian, people should not close out their oldest card, because it has the most history on it; also, your client should maintain four to six credit cards to “keep his/her credit score and debt balances healthy” [source: TransUnion]. But other than that, your clients should close the accounts they don’t use. In addition to avoiding excessive available credit, your client limits his/her exposure to identity theft. Cutting up the card or just not using it doesn’t mean the account is closed. Your client has to call or write to the card company and ask to close the account.
  •     Missed payments - Obviously, your client’s payment history makes a big difference. Your client should always make at least the minimum payment, or consolidate accounts to reduce payments. These delinquencies stay on your client report for seven years — even if your client has caught up payments! The same goes for accounts that creditors have turned over to collection agencies or charged-off — meaning that they’ve written the account off as a loss. Even if your client does pay off the account at a later date, the charge-off or collection action stays on your client’s report for seven years.
  •     Maxed-out credit lines - Another thing that scares lenders is a maxed-out credit line (or two). This waves a big red flag and indicates that the individual may be financially strapped for some reason. Some experts suggest moving debt around if this is the case. For example, if your client has a maxed-out card but have other cards that haven’t reached their credit limits, he/she might consider moving some of the debt from the maxed-out card to the non-maxed-out ones.
  •     Debt in relation to income - If your client has unsecured credit card debt that is more than 20 percent of his/her annual income, lenders may not want to give your client the best deal on a loan — if they take the chance and give your client a loan in the first place. Advice your clients to reduce the debt-to-income ratio which will allow them to get better rates on the loans they seek
How Does Credit Repair Work?

Around 25% of Americans have incorrect/erroneous items listed in their credit reports that will result in the consumer being declined for credit or to obtain loans at higher interest rates.

While this is a serious fact, what is more serious is what happens when these consumers actually dispute these errors on their report with the Credit Bureaus.

Many “Consumer Protection” and “Consumer Rights” groups try to make consumers feel confident by explaining that any errors on their credit report have to be investigated by the credit bureaus and any information which the bureaus are unable to verify within 30 days, must be DELETED from the consumer’s report. The consumer must mail a letter (or go online) in order to initiate the investigation process. 

What is the credit repair process?

  1. You generate the dispute letter with one or multi items using your Credit Repair Software. This letter is mailed to the Credit Reporting Agency (Equifax, Experian or TransUnion).
  2. Using e-OSCAR (Online System for Complete and Accurate Reporting), the Credit Reporting Agency scans the dispute letter and assigns a 3 digit dispute code to it generating an Automated Credit Dispute Validation (ACDV, or “Electronic Dispute”) which is then electronically forwarded (via e-OSCAR) to the corresponding Data Furnisher.
  3. The Data Furnisher receives the “electronic dispute” and investigates the facts. Within 30 days, the Data Furnisher must send via e-OSCAR to the Credit Reporting Agency the result of the investigation.
  4. The Credit Reporting Agency receives the response to the “electronic dispute” showing the result of the investigation from the Data Furnisher and updates the Credit Report as required; then a “Response Letter” is mailed to the Consumer (you).
  5. Once the Consumer (your Client) receives the response letter from the Credit Reporting Agency, he/she must forward it to your Company. Responses can be:

        Positive response: no further action is required. The item was deleted or repair.

        Negative response: Your Credit Repair software automatically tells you what is the next action and “Dispute Style Sheet” that must be generated and the process starts over again.

What do the credit bureaus do with the dispute letters?

  • Credit bureaus use “Optical Character Recognition” or OCR which is part of their e-OSCAR system. This technology allows them to scan the consumer’s letters and convert them into plain text that can be stored into a database. This way, they can deal with the over 20,000 dispute letters that they receive each day.
  • When the letter is received by the Credit Reporting Agency (Credit Bureau) it’s electronically scanned with “Optical Character Recognition” and Matched against a DATABASE or “Boiler Plate” of Dispute Letters commonly used by Credit Repair Companies or found in cheap software programs and Credit Repair Books. If the algorithms find that your letter “matches” one of these letters in their database, your dispute will most likely be flagged as Frivolous, suspicious or it is simply ignored. If you use poor or simplistic Credit Repair Software or Dispute Letters out of Credit Repair Books you might have firsthand experience with this.
  • No matter who writes the dispute letters or how threatening they are, if the scanned version DOES NOT match that of a “Boiler Plate” dispute letter used thousands of times, the scanned version will then be sent electronically overseas for processing. There, an outsource employee will look at the scanned dispute and assign a 3 digit code (even if it has multiple pages of detailed documentation supporting the claim). Around 85% of disputes will fall under the same 5 codes.
  • Once your dispute is converted to one of the “Standardized Dispute Codes” within the e-OSCAR system, the code is sent via e-OSCAR to the Data Furnisher (the Original Creditor or Collection Agency) using a standardized form known as an Automated Credit Dispute Verification Form (ACDV).
  • When the data furnisher receives an ACDV thru the e-OSCAR system they should begin an “in-depth” investigation. If the furnisher is a Collection Agency, they should contact the Original Creditor for real documentation on the account, but the data furnisher will never receive nor see all the documentation part of the dispute. Data Furnishers can receive thousands of disputes a month. e-OSCAR’s solution to the problem is to send the Data Furnisher all these disputes in one large file (batch file), all at one time. When the data furnisher receives this file, there are several options for processing the data. One such option is called reply all. This option allows the data furnisher to select a response like “Account Verified” and apply this response to multiple records in the file with a single click. Another function called “Auto-Populate” allows the data furnisher to Auto Populate responses of ACDV before submitting them back to the credit bureau via the e-OSCAR system.
What YOU should know!

Here are the Credit Laws that you should know while we are hard at work getting you back to credit worthiness:

The Fair Credit Reporting Act

The Fair Credit Reporting Act (FCRA) promotes the accuracy, fairness, and privacy of information in the files of the nation’s credit reporting companies. The FTC enforces the FCRA with respect to these companies. Recent amendments to the FCRA expand consumer rights and place additional requirements on credit reporting companies. Businesses that provide information about consumers to credit reporting companies and businesses that use credit reports also have new responsibilities under the law.

Credit Repair Organizations Act

(a) Findings.—The Congress makes the following findings: (1) Consumers have a vital interest in establishing and maintaining their credit worthiness and credit standing in order to obtain and use credit. As a result, consumers who have experienced credit problems may seek assistance from credit repair organizations which offer to improve the credit standing of such consumers. (2) Certain advertising and business practices of some companies engaged in the business of credit repair services have worked a financial hardship upon consumers, particularly those of limited economic means and who are inexperienced in credit matters. (b) Purposes.—The purposes of this title are— (1) to ensure that prospective buyers of the services of credit repair organizations are provided with the information necessary to make an informed decision regarding the purchase of such services; and (2) to protect the public from unfair or deceptive advertising and business practices by credit repair organizations

Truth in Lending Act
The Truth in Lending Act requires “meaningful disclosure of credit terms” and reflects a shift in emphasis from “let the buyer beware” to “let the seller disclose.” It is designed to protect consumers against inaccurate and unfair credit billing and credit card practices too!
    (a) In General.—No person may—
        (1) make any statement, or counsel or advise any consumer to make any statement, which is untrue or misleading (or which, upon the exercise of reasonable care, should be known by the credit repair organization, officer, employee, agent, or other person to be untrue or misleading) with respect to any consumer’s credit worthiness, credit standing, or credit capacity to—  
            (A) any consumer reporting agency (as defined in section 603(f) of this Act);(8) or
            (B) any person—  
                (i) who has extended credit to the consumer; or
                (ii) to whom the consumer has applied or is applying for an extension of credit;  
        (2) make any statement, or counsel or advise any consumer to make any statement, the intended effect of which is to alter the consumer’s identification to prevent the display of the consumer’s credit record, history, or rating for the purpose of concealing adverse information that is accurate and not obsolete to—  
            (A) any consumer reporting agency;
            (B) any person—  
                (i) who has extended credit to the consumer; or  
                (ii) to whom the consumer has applied or is applying for an extension of credit;
        (3) make or use any untrue or misleading representation of the services of the credit repair organization; or
         (4) engage, directly or indirectly, in any act, practice, or course of business that constitutes or results in the commission of, or an attempt to commit, a fraud or deception on any person in connection with the offer or sale of the services of the credit repair organization.
       (b)    Payment in Advance.—No credit repair organization may charge or receive any money or other valuable consideration for the performance of any service which the credit repair organization has agreed to perform for any consumer before such service is fully performed.

*Law does not require lenders to report payment history*
Merchants and lenders are not required to report information about the accounts that individuals have with them. Reporting information is strictly voluntary.
Companies choose to report because they are reliant on information from other companies to help them make sound decisions. They recognize that it is only fair for them to share the information if they are going to receive it. Voluntary sharing of information has been the basis for credit reporting since its earliest days, when local merchants shared their lending experiences verbally with neighboring stores.
However, the law does mandate what a business must do if it chooses to report information. The Fair Credit Reporting Act (FCRA) defines what a business’s responsibilities are if it decides to report information to a credit reporting company, like Experian, EquiFax or TransUnion. Those responsibilities include not knowingly reporting inaccurate information, updating payment information regularly and responding to disputes about the accuracy of any information within a specified period of time, among others.