Updating an old address, removing an inaccurate late payment, clearing your report of expired records, it seems like it should be fairly easy to do. After all, the credit bureaus want to be able to sell the most accurate data possible, right? Unfortunately, anyone who has tried to dispute inaccurate information on their credit reports knows just what a quagmire the process can be. Here's the basic breakdown:

Step 1: Order your credit reports online and attempt to decipher what is actually incorrect and can be removed. This is confusing due to the fact that credit reporting isn't necessarily logical and that most records stay on your report for 7+ years.
Step 2: Try to file your dispute online. The credit bureaus don't make it easy. Some require you to produce a report code that only certain credit reports contain. Some require you to order another credit report online before you can start.
Step 3: Decide to file your dispute by mail instead, which is often easier and faster, but requires you to type, print and mail letters.
Step 4: The bureau processing office receives your dispute letter and has 30-days to verify the claim. In most cases, this simply means asking the creditor if the information is correct. The consumer's word against the creditor's.
Step 5: A correction is made...or not. The credit bureaus will send you a letter explaining what happened and will include an updated credit report.
Step 6: Rinse and repeat. If your dispute was declined, you can refile your claim with additional documents and information to back up your position. Or you can try working with the creditor reporting the error directly. But don't dispute too many times or you could get "black listed" for filing fraudulent claims. Even if you get the record removed, it could reappear on your credit report later fairly easily.

Standing in line at the DMV sounds easier and more efficient that this process. Now imagine if you are dealing with a serious credit report error: what if your records are mixed up with someone else's data? This happened to Eric Carroll, as reported in a recent frightening Boston Globe article. These mix-ups happen all the time, especially with similarly-named relatives living at the same address or in cases of identity theft.

The good news is that the credit bureaus may be pushed into making a New Year's resolution to improve their dispute systems. Representative Barney Frank (D-Mass.), the new chairman of the House Financial Services Committee, has pledged to hold hearings on how the credit bureaus can improve their reporting and dispute procedures. Hooray! Here's how I personally would like to see the system work:

Step 1: You check your credit reports online and spot something that seems incorrect. The credit report is annotated with clearly defined expiration terms for old records and includes a prominent link to dispute online.
Step 2: You click on the dispute link and go through an automated process that helps you identify if the inaccuracy is valid and enter information to back up your dispute claim. The credit bureaus offer toll-free access to expertly trained agents who can help answer your questions. You are assigned a case number and a login to check your dispute status online.
Step 3: You use your login to check for regular updates on your dispute. The credit bureaus list their investigation details and encourage contact between the consumer and the creditor or agency over questionable items.
Step 4: You are sent an email alert as soon as your dispute investigation is completed, hopefully within a few days. If you do not agree with the decision, there is an automated appeal process that continues seamlessly from that point.
Step 5: Your case is closed and you are given instructions for obtaining an updated credit report online for free. The credit bureaus keep your dispute on file for future reference and to prevent the inaccuracy from occurring again.

That sounds much easier to me. The process will probably never be perfectly simple, but with a little help it could be more efficient and more fair to consumers. There is no reason that correcting an error on your credit report should be harder than filing an insurance claim or renewing your driver's license. What do you think? Share your feedback in the comments section below.