According to an FTC study, one-in-four consumers have an error on their credit report that could affect their credit score. A credit report error, such as a fraudulent account or incorrect account details, can have a powerful impact on a consumer’s financial health. These errors can affect everything from the terms and rates a consumer is offered on credit cards to their ability to rent an apartment.
For the negative impact credit errors can have, to date, there hasn’t been a clear way for consumers to quickly correct them. To correct an error, consumers have often relied on writing letters, visiting multiple websites, signing up for paid services or employing a professional to petition the credit bureaus on their behalf.
It’s a big problem, and with nearly half of Americans never having checked their credit report, it is one many people aren’t even aware they’re facing. It’s a situation that has been in need of a little simplicity and modernization, and an area Credit Karma really felt consumers could use some help.
It is against this backdrop that throughout 2015 we’ve been rolling out our new Direct Dispute™ feature, which is now available to all of our 45 million members. We’re excited about this new tool and how we can help our members. We believe that our Direct Dispute feature is the most streamlined, proactive integration of a dispute resolution feature to date, giving consumers both the context to understand and identify an error and the means to dispute it immediately. In our initial rollout, we’ve seen amazing results, facilitating over 600,000 disputes so far with 87 percent of these ending successfully with a change to a member’s credit report and a median resolution time of five days.
Using this new feature, if members see an account error while looking at their TransUnion credit report, the Direct Dispute option is prominently displayed for them to quickly dispute the information they feel is incorrect.
When they choose to dispute an error using the Direct Dispute feature, they’re taken through to a screen where they simply choose their reason from a pre-formatted list before sending the dispute directly to TransUnion for review.
When a member files a dispute, the credit bureau makes an initial assessment and forwards the dispute for further investigation to the relevant financial institution or agency that provided the account information. If the review results in an update to the disputed report, the company that provided the information is also obligated to notify the other major bureaus it reports to of the correction.
Using Direct Dispute, Credit Karma members will be able to track the progress of their dispute from inside their member account.
Until now, most consumers haven’t known about their credit report errors, didn’t know how to fix them or didn’t have the time. We see our new Direct Dispute feature as a major solution to these issues, driving forward Credit Karma’s mission to help people better understand and take control of their finances.
As with everything available from Credit Karma, use of Direct Dispute is completely free.
Best,
Anthony Lingen
Product Manager, Credit Karma