With respect to our credit reports, every single one of us has something in common. We all enjoy considerable rights under the Fair Credit Reporting Act or “FCRA.” One of those rights is to challenge information on our credit reports with which we disagree, like accounts, collections, or public records.

If you do choose to dispute credit entries there’s a chance they will be modified or removed. But, if an account is removed there’s no guarantee that the removal will be permanent. There are certain scenarios under which previously deleted accounts can be re-reported to your credit reports. It begs the question, why do deleted accounts sometimes reappear on consumer credit reports?

The item is eventually verified

You may have been able to get something removed from your credit report because the credit reporting agency was not able to verify the item. If you file a dispute the credit bureaus generally have between 30-45 days to complete their investigation with the furnishing party. If, however, the furnishing party does not respond to the credit bureau’s request to investigate the disputed item then the credit bureaus will remove it as being unverifiable.

If, however, the furnisher (normally a financial services company or debt collector) eventually gets around to verifying the item then there’s no reason why it cannot be reinserted onto your credit reports. In fact, this process is formally referred to as reinsertion.

The credit bureaus have to notify you if an item has been reinserted. But absent a notice of reinsertion, you may be able to tell something has been reinserted because your FICO and VantageScore credit scores might have decreased because of the newly added item.

The furnisher accidentally re-reported the account

You have the right to circumvent the credit bureaus and go directly to the furnisher and ask them to correct or remove their credit entry. This is called a “direct dispute.”  You may actually be able to convince the furnisher to manually remove their entry by using a form called an Automated Universal Dataform or “AUD.” An AUD is used to change or remove an item outside of a furnisher’s normal 30-day update process, which is why the AUD method is commonly referred to as an “off cycle” update/deletion.

In order for the manual/off-cycle/AUD removal to be permanent is if the furnisher also stops reporting the account as part of their normal monthly update process. If the furnisher neglects to remove the account from their monthly update, it’s going to be re-reported and will likely reappear on a consumer’s credit report.

Settlement deletion doesn’t work

Consumers sometimes sue credit bureaus and furnishers and pursue their rights under the FCRA. In fact, FCRA lawsuit filings have set annual records every year since 2010, including in 2020 in the middle of a global pandemic. I have personal experience and a first-row seat to these FCRA lawsuits as I’ve been retained as an expert witness in over 600 of them.

The majority, as in the vast majority, of FCRA lawsuits, are disposed of long before trial. Either the case is dismissed, dropped, or settled. When cases are settled there’s always some sort of a settlement agreement where the two sides agree on the terms.

One of the common terms of FCRA settlements is an agreement by the furnisher to request the deletion of an allegedly incorrect credit entry. You’ll notice I used the word “request” in the prior sentence. That was on purpose. Furnishers of information can only ask that something be removed from a consumer’s credit reports. The credit bureaus are the ones that have to actually do the removing, which they always do.

If, however, the furnisher re-reports the item to the credit bureaus then it will be reinserted on a consumer’s credit report. Again, this is a disconnect between the terms of a settlement agreement and the actions taken by the furnisher to make sure they don’t accidentally re-report an account that caused them to be sued in the first place.

Bottom line

These three reasons for reinsertion are in reverse order from a commonality perspective. FCRA lawsuit numbers are pretty low relative to the number of consumer disputes that do not result in litigation. And, furnishers generally do a pretty good job not accidentally re-reporting a previously removed item. It’s the “post investigation” verifications that are the most common, although that’s not to suggest they are generally common.

If you want to make sure an item that was previously removed stays removed then you’ll want to check your credit reports from time to time. You can do that for free every week through April 2022 at AnnualCreditReport.com. You’ll be able to check all three of your reports through that website.