Repairing Your Credit
Your credit rating says a lot about you. But just because you've had less than
perfect credit in the past, doesn't mean you can't improve your rating and move
on. Learn how credit agencies work and read about tips to deal with debt.
What is Credit Repair?
"Credit repair" is a general term often used to describe a systematic
process of rehabilitating an individual's creditworthiness, or financial credit
reputation. The process is generally initiated by obtaining copies of the
individual's credit report, reviewing the credit report for errors, omissions,
and misleading information, and requesting corrections to such information by
means of a formal dispute. Many laws, regulations, and practices govern this
process, and many organizations exist that will assist in guiding individuals
through this sometimes complex process, though much, if not all, may be
accomplished by individuals by their own efforts.
Basic Credit Repair Strategy
The basic strategy to repairing your credit is as follows:
That's all there is to it. Seems easy enough but you must have patience, because
the credit bureaus are not always very cooperative. They make their money by
providing credit reports to lenders not by fixing bad information in their
databases.
1. Get your credit report.
Obtain free copies of your Credit report.
2. Analyze your credit report.
After reviewing your credit reports, highlighted everything what
you think wrong.
3. Rank questionable/negative items
Step 2 covered how to identify items, both positive and negative on
your credit report. Now you have this list, you should 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.
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Bankruptcy
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Foreclosure
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Repossession
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Loan Default
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Court Judgments
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Collections
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Past due payments
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Late Payments
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Credit Rejections
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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.
4. Requesting Corrections and Disputing Your Credit
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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.
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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".
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.
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, the
credit bureaus must take the following steps:
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The credit reporting agencies must resolve consumers' disputes within 30 days
limit
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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.
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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.
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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.
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. It’s all
part of Step 5 above, documenting your efforts.
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.
| Tips for resubmitting your credit dispute |
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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, But don’t overdo it.
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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.
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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.
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