|
1. Get your credit report.
Yes! There are many ways to get a free copy of your credit report.
As of Jan 1, 2004, due to the new FCRA Act of 2003, all credit bureaus will be required to give out one free credit report per year. They are rolling this program out slowly as the year rolls on. You can see when you are eligiable for a free report. Note: The Credit Bureaus are not required to give out your credit score for free. If you want to order your score in addition to your free report, most are charging about $5.95. The free reports are good for 30 days only, so make sure you print your reports if you get them online.
You can order your free annual credit report online at www.annualcreditreport.com, by calling 877-322-8228, or by completing the Annual Credit Report Request Form and mailing it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.
When you order, you need to provide your name, address, Social Security number, and date of birth. To verify your identity, you may need to provide some information that only you would know, like the amount of your monthly mortgage payment.
Beware! There are some websites out there who are posing as the free annual credit report site who are engaged in fraudulent activities.
2. Analyze your credit report.
Whenever you or anyone else asks for a copy of your credit report, the request is supposed to be noted as part of your credit history. If you apply for lots of credit cards in a short time, this will produce a flurry of "inquiry" notes on your credit report. Lenders often turn this around and assume that a flurry of inquiries means you've recently applied for lots of credit, so they turn you down on that basis even though the inference is not strictly valid.
Profit and loss charge offs are used most often by credit card companies. They write the debt off on their books as uncollectable rather than spending time and lawyer's fees to collect them. Charge offs are considered a serious black mark on your credit report. Only bankruptcy and foreclosure are worse.
However, even if these companies aren't actively trying to collect from you, these debts are still owed by you to the company. If you refinance your house or apply for a loan, most mortgage companies will make you pay off these debts. The reason is that these debts can be turned into a lien against your property.
Liens matter to a mortgage company for a couple of reasons:
1. When you sell your home, the monies owed against a lien (plus interest) must be paid off to clear your title.
2. Liens are in a higher position than a mortgage, meaning they get paid off before the mortgage company gets its money. If the mortgage company has to foreclose and you have lots of liens on your home plus a mortgage, the mortgage company potentially could lose thousands of dollars.
3. Just because these debts are charged off doesn't mean that the creditor won't come after you later. Creditors have the right to sue you and win a judgment in court until the statute of limitations runs out.
If you're never going to buy a home, or at least not for 7 more years (that's when the profit and losses will drop off your credit report), having charge offs on your credit history may not be quite as serious. If you buy a car, or anything other than real estate, you won't be asked to pay these debts off. But your credit will really stink for a long time...good luck getting a low interest rate car loan! Again, charge offs are almost as bad as having a bankruptcy on your credit history, plus you still owe the money.
If you need to get charge offs removed from your credit report, you can:
1. Pay them off.
2. Declare bankruptcy.
Bankruptcy may not be a bad option if the debts are out of hand. If you keep your credit clean and open three new charge accounts (even gas cards), you can get an A paper (the best rates and terms) loan in 2 years.
3. Rank questionable/negative items
Identify items, both positive and negative on your credit report and rank each item according to the amount of damage they are doing to your overall credit picture. Rank the most damaging information first, followed by the next most damaging information, followed by those items which are neutral. Do this for each credit report, as remember, they may not all have the same information on them. They may even have duplicate information. If this is the case, you will need to write to each credit agency individually for each duplicate item.
The items here are listed in order of descending importance with the first item being the "most damaging" to your credit.
* Bankruptcy
* Foreclosure
* Repossession
* Loan Default
* Court Judgments
* Collections
* Past due payments
* Late Payments
* Credit Rejections
* Credit Inquiries
Also, if your creditor has NOT notified you of negative information they have recently placed on your credit report, they are currently in violation of the Fair Credit Reporting Act. You can use this to pressure the original creditor to remove the listing by reminding them they are in violation of the FCRA by not notifying you.
4. Requesting Corrections and Disputing Your Credit
What should you challenge?
Everything, and you should always shoot for a complete deletion. Don't bother challenging the information within a collection listing, charge-off, court record, repossession, foreclosure, or settled account. As the basic nature of these listings is negative, changing the information within the listing will yield no improvement. Severely negative listings, such as these, must be disputed on the basis of complete deletion or not be disputed at all.
What items are the toughest to get off your report?
You will have the toughest time getting bankruptcies and foreclosures off of your credit report as these things are so easy for the credit bureaus to verify. In the case of a bankruptcy, you most likely will have a few trade lines saying "included in Bankruptcy". If you want to challenge your bankruptcy, you need to clear off all credit lines mentioning a BK FIRST.
Challenge each and every collection, as well as any credit card late payment. Write a letter that:
* listed each negative listings by name, collection agency and amount of the delinquency
* Under each of the list accounts, dispute the accuracy.
* Include your Name, SSN, Address, and a copy of your driver's license.
* Send the letters via Express Mail, which provides a receipt for the mailing, and guarantees delivery. Total expense for Express Mail: $36.
5. Make sure you send everything registered or certified mail.
This is important, as you must be able to tell when letters were sent and received. It gives you some leverage with the CRAs if they don't respond in the time frame required by law.
6. Document Your Credit Repair Efforts
As soon as you have ordered your credit reports and photocopied your order letters and checks, you must create a precise organizational system to track your correspondences with the credit bureaus and your creditors. Why is this necessary? Unfortunately, credit items you have worked so hard to remove mysteriously reappear. If this happens, it is usually easy to have the items deleted permanently if you show your complete records on the first removal. Why take a chance? As you proceed through these steps, keep copies and records of all correspondence you send and receive. Copies of all correspondence are a must, as well as notes on all telephone conversations! Also, if you should encounter any special difficulty and would like help in repairing your credit, you will need these records to proceed.
Every time you have a telephone conversation with a creditor, you must document the conversation by recording the name of the person to whom you spoke, his or her position, the date and time of the conversation, what was said in the conversation, and what was agreed upon.
7. Wait for the credit bureau to finishing investigating
Once the credit reporting agency has received your dispute letter, they are obligated to investigate. This obligation is not contingent upon you having been denied credit. According to the Fair Credit Reporting Act of 1997 (see Attachment 3), the credit bureaus must take the following steps:
* The credit reporting agencies must resolve consumers' disputes within 30 days limit
* In response to consumers' complaints that documentation in support of their disputes was disregarded, the credit bureaus have to consider and transmit to the furnisher all relevant evidence submitted by the consumer the first time.
* Consumers will receive written notice of the results of the investigation within five days of its completion, including a copy of the amended credit file if it changed based on the dispute.
* Once information is deleted from a credit file, the credit bureaus can not reinsert it unless the entity supplying the information certifies that the item is complete and accurate and the credit bureau notifies the consumer within five days.
The Federal Trade Commission says that inaccurate credit reports are the number-one source of consumer complaints, and that it is quite common for problems to take six or more months to be resolved. All of the big-three agencies are working on making sure that all disputes are handled within 30 days.
If the new investigation reveals an error, you may ask that a corrected version of the report be sent to anyone who received your report within the past six months. Job applicants can have corrected reports sent to anyone who received a report for employment purposes during the past two years. However, this is unlikely to repair any damage done when your credit report was first pulled, so don’t waste your time or energy on this approach.
8. Evaluate the results of your repair efforts.
You did save the original credit report your ordered, didn’t you? And each item you challenged? Good, you will need them to evaluate how well you did.
When you get your “repaired” credit report back from the credit bureaus, they will summarize what changed on your credit report due to your challenges. You can compare this list to your own notes or just to the previous credit report.
9. Specialized techniques:
Depending on the type of listing, you may also want to try these separate techniques:
* Collections - you should always try to use the debt validation technique on collections. This should be in addition to your credit repair efforts with the credit bureaus.
* Charge-offs. Try disputing the information within the listing, like the date the account was opened, the high balance, the amount owed, etc. If any of the information is incorrect, you have a good chance of getting the whole thing deleted off of your report.
* Judgments. If you were never served for a judgment, you may have a chance of getting it vacated (voided), or there may be other technicalities that you can use. Check out our new section on how to do this.
The results of each item will have been resolved in one of five different ways:
1. If the listing is not mentioned in the results list, you must have forgotten to include it, or your request was not sufficiently clear. You will need to dispute the item again in your next dispute letter. The bureaus are legally obligated to respond in writing within 30 days, so if they don't, it is highly unlike they are ignoring you.
2. The disputed item was investigated but verified.If you don’t get the item removed, most likely, the credit bureaus will have just given you a cryptic reason as to why like “item verified”.The creditor may have responded to the credit bureau's request for re-verification. They may have simply said that the listing was correct, and in this case, the bureau will take their word for it. Now it is up to you to prove to the bureau that the item is not correct. The law required that the bureaus accept any proof you may submit, as well as to pass any documentation you provide on to your creditor for consideration, so be sure to send any documentation you can, if you didn’t do it the first time. You could also try disputing the listing again at a future time. Who knows, you may get lucky, and a different employee of the creditor may not be able to verify the item.
3. The disputed listing was investigated as to the correctness of the information within the listing (such as late pay notations) and the listing was found to be inaccurate or unverifiable. Remember, if the creditor doesn't respond to the bureau at all, this is the same as the listing being unverifiable. In this case, the negative listing will now show up as a positive listing, or it will be deleted from your report all together. This is the best possible outcome.
If you are not getting the desired results from the credit bureaus Credit bureau disputes are not handled by computers, but by people, so the possibility that your claims was misunderstood, overlooked or mishandled is good. Fixing your credit takes time, and there is nothing you can do to expedite the process. However, you can always resubmit your claims.
Tips for resubmitting your credit dispute
* Be persistent! Become more insistent, but not more threatening, with each dispute. As you submit one dispute after another, it may become increasingly difficult to get the checker to initiate an investigation.Your first one or two disputes should be friendly and polite. Just like any other consumer, you can become frustrated and threatening as time passes. You may threaten to hire an attorney, you may threaten to complain to the FTC and your state's attorney general, etc. But don’t overdo it.
* Be creative - Create and utilize other techniques that help further the idea that the dispute letter is from a truly wronged and disadvantaged consumer. The checker is only interested in investigating disputes that truly are erroneous and damaging. Again, because the agencies are flooded with requests, they tend to give priority to those that seem most urgent.
* Do not bombard the credit bureaus with disputes (about the same listings, that is) - Do not bombard the credit bureaus with disputes. Sending one dispute right after another is wasteful and counterproductive. You may wind up alienating the credit agency so that they hold up your progress. (Remember, they cannot legally stop you from restoring accurate information but the people who run the agencies, like anyone else, probably do not respond well to harassment.) Also remember, that credit repair is a time-consuming operation requiring great patience. The rule of thumb is to wait 60 days between disputes of the same listing.
What if a removed negative item comes back on my credit report?
Ok, you’ve removed a listing and are breathing a deep sigh of relief. Then you get a letter in the mail from a credit bureau telling you the item has been added back on. What happened?
Reverified listings
This is actually becoming more commonplace: since the new credit laws require that the bureaus investigate and resolve your disputes within 30 days, they will sometimes remove the negative information temporarily until they get the information verified as true. Then they will put back any information verified to be true and notify you of this.By law, they can do this, but they have to notify you in writing.
|
Small minds cause
more headaches!
|
