Guide to do it yourself credit repair: Free tips to fix your credit legally

FREE GUIDE TO DO-IT-YOURSELF CREDIT REPAIR

More than ever consumers are worried about their credit history. No wonder with up to 70% of credit reports containing errors and many of those, very serious errors. This information, according to the Public Interest Research Group- (www.PIRG.org) has consumers wondering just how accurate their credit reports are. Well, have faith, there are steps you can take to rectify a poor or inaccurate credit history. These DIY credit repair methods are the best way to fix a credit history, especially the credit repair by debt settlement and repairing your credit using sections of the FCRA. A bad credit history doesn't have to be a life sentence. If you educate yourself in how the credit reporting system works, you can work to remove issues caused by a divorce, bankruptcy, collection account or judgment. Bad or good credit has one thing in common. It must be verifiable. Fortunately for us, credit inaccuracies are removable and its very legal to uncover ways to find those.

Credit Repair Steps:

1.) You must first obtain a copy of all three credit reports. There are three national credit bureaus- Experian, Equifax and TransUnion. Most credit reports cost around $8.00 but If you've been denied credit, insurance or employment because of your credit reports, you are entitled to a free copy from the credit bureaus. You have 60 days after receiving the denial notice to request your free copy. Once you have your credit reports, go over each one with a fine tooth comb. Scour the reports for errors such as inaccurate account information, incorrect home addresses, duplicate accounts and false information. Many times you will find little errors like limit, balance, date opened/closed and payment history and fixing those errors can make a huge difference in how good your credit looks.

2.) Send off your disputes. Once you determine the errors, highlight each one and attach a letter and a copy of the credit report explaining the nature of your dispute. Send off the letters and a copy of the report to the corresponding bureau.

Equifax
(equifax.com)
PO Box 740241
Atlanta, GA 30374-0241
(800) 685-1111

TransUnion
(transunion.com)
760 W. Sproul Rd.
Springfield, PA 19064-0390
(800) 888-4213

Experian
(experian.com)
PO Box 2104
Allen, TX 75013-0949
(888) 397-3742

Do not send Experian disputes to Equifax or TransUnion. Each credit bureau is independent and does not fix the other's errors. Wait about 30 days to get a response from the credit bureau reflecting the correction and continue this process until you have cleaned up all inaccurate, false or outdated or unverifiable information. Credit bureaus can only report a negative history for 7 years from first serious delinquency or charge off so be careful to look for outdated information.

3.) Keep a paper trail of everything! Your proof of all your hard work will be in your documentation so be sure to keep copies of everything. Send your disputes by certified mail so that you get a receipt back showing the dispute was delivered to the bureau. Bureaus receive millions of pieces of mail so don't think your dispute won't get lost in the shuffle. You may need all that documentation later if you find the bureau being resistant.

4.) When disputing doesn't work. Some times you may find that the bureau has determined your information to be timely and accurate. You may feel differently about it and may even have a good argument. That is when it is time to turn your attention to the "source reporting it"- the creditor. The creditor holds all the power in how they report your accounts and ultimately they are the one who can remove a negative mark. Some strategies to dealing with the creditor is to provide them with a written history of what you believe happened. Maybe they charged a late fee inappropriately or maybe they agreed to re-age a late payment but did not follow through or possibly you had an agreement with them to remove a negative mark in exchange for settling a debt. All of these reasons need to be dealt with on the creditors end- not the bureau. The bureau is good for 'spring cleaning" a report but the real results come from dealing with a creditor. Follow the same strategy as above getting everything in writing and keeping good records of exactly who you spoke to and where you mailed your letters.

5.) Negotiating negative but accurate credit. Once you have completed all the steps above you may be left with a few accounts that the creditor or credit bureau is unable to assist you with. What type of account is that? A collection account owned by a third party debt collector. Once a debt has been sold to a collection agency, the creditor no longer owns the right to settle it. By dealing with the collection agency in writing you can begin to negotiate a reduced payoff in exchange for a better rating or a deletion of the negative account. This can be very effective in wiping out negative credit. A collection agency is more interested in getting your money than reporting the debt. They only report it as a tool to get you to contact them because they know eventually that bad mark will be in your way of getting a car, home loan or job. Be careful when dealing with debt collectors by following a few simple rules.

Get everything in writing especially settlement offers. If you don't they may cash your check and leave the nasty mark on your credit. Move onto someone else within the agency if the person you are dealing with is impossible. Ask for a superior. Never let the debt collector know that you are paying off the bill because you are trying to get a loan. They will have you right where they want you if you do. Validate the debt first. Use your rights under the Fair Debt Collection Practices Act to question the validity of the debt. If they cannot prove it- they can not collect or report it- simple as that! If they refuse to validate it, send an Estoppel letter. You can also sue a creditor or credit bureau for violations. Also- do not forget to check the SOL (statute of limitations for collectability of the debt- you may not even have to pay it).

6.) Pay off high balances, close unused accounts (unless the accounts have a history of 10 years or more- keep those) and be sure to limit your inquiries. All of this can help you have better credit! Finally, use our free debtor library to assist you in understanding debt collectors and credit bureaus. It's free and you will be glad you did!

The FTC on Fair Credit Reporting

If you've ever applied for a charge account, a personal loan, insurance, or a job, there's a file about you. This file contains information on where you work and live, how you pay your bills, and whether you've been sued, arrested, or filed for bankruptcy. Companies that gather and sell this information are called Consumer Reporting Agencies (CRAs). The most common type of CRA is the credit bureau. The information CRAs sell about you to creditors, employers, insurers, and other businesses is called a consumer report. The Fair Credit Reporting Act (FCRA), enforced by the Federal Trade Commission, is designed to promote accuracy and ensure the privacy of the information used in consumer reports. Recent amendments to the Act expand your rights and place additional requirements on CRAs. Businesses that supply information about you to CRAs and those that use consumer reports also have new responsibilities under the law.

Here are some questions consumers commonly ask about consumer reports and CRAs - and the answers. Note that you may have additional rights under state laws. Contact your state Attorney General or local consumer protection agency for more information.

Q. How do I find the CRA that has my report?
A. Contact the CRAs listed in the Yellow Pages under "credit" or "credit rating and reporting." Because more than one CRA may have a file on you, call each until you locate all the agencies maintaining your file. The three major national credit bureaus are:

Equifax
800-685-1111
www.equifax.com

Experian
888-EXPERIAN (888-397-3742)
www.experian.com

Trans Union
800-916-8800
www.transunion.com

In addition, anyone who takes action against you in response to a report supplied by a CRA - such as denying your application for credit, insurance, or employment - must give you the name, address, and telephone number of the CRA that provided the report.

Q. Do I have a right to know what's in my report?
A. Yes, if you ask for it. The CRA must tell you everything in your report, including medical information, and in most cases, the sources of the information. The CRA also must give you a list of everyone who has requested your report within the past year - two years for employment related requests.

Q. Is there a charge for my report?
A. Sometimes. There's no charge if a company takes adverse action against you, such as denying your application for credit, insurance or employment, and you request your report within 60 days of receiving the notice of the action. The notice will give you the name, address, and phone number of the CRA. In addition, you're entitled to one free report a year (1) you're unemployed and plan to look for a job within 60 days, (2) you're on welfare, or (3) your report is inaccurate because of fraud. Otherwise, a CRA may charge you up to $9 for a copy of your report.

Q. What can I do about inaccurate or incomplete information?
A. Under the new law, both the CRA and the information provider have responsibilities for correcting inaccurate or incomplete information in your report. To protect all your rights under this law, contact both the CRA and the information provider.

First, tell the CRA in writing what information you believe is inaccurate. CRAs must reinvestigate the items in question - usually within 30 days - unless they consider your dispute frivolous. They also must forward all relevant data you provide about the dispute to the information provider. After the information provider receives notice of a dispute from the CRA, it must investigate, review all relevant information provided by the CRA, and report the results to the CRA. If the information provider finds the disputed information to be inaccurate, it must notify all nationwide CRAs so that they can correct this information in your file.

When the reinvestigation is complete, the CRA must give you the written results and a free copy of your report if the dispute results in a change. If an item is changed or removed, the CRA cannot put the disputed information back in your file unless the information provider verifies its accuracy and completeness, and the CRA gives you a written notice that includes the name, address, and phone number of the provider.

Second, tell the creditor or other information provider in writing that you dispute an item. Many providers specify an address for disputes. If the provider then reports the item to any CRA, it must include a notice of your dispute. In addition, if you are correct - that is, if the information is inaccurate - the information provider may not use it again.

Q. What can I do if the CRA or information provider won't correct the information I dispute?
A. A reinvestigation may not resolve your dispute with the CRA. If that's the case, ask the CRA to include your statement of the dispute in your file and in future reports. If you request, the CRA also will provide your statement to anyone who received a copy of the old report in the recent past. There usually is a fee for this service. If you tell the information provider that you dispute an item, a notice of your dispute must be included anytime the information provider reports the item to a CRA.

Q. Can my employer get my report?
A. Only if you say it's okay. A CRA may not supply information about you to your employer, or to a prospective employer, without your consent.

Q. Can creditors, employers, or insurers get a report that contains medical information about me?
A. Not without your approval.

Q. What should I know about "investigative consumer reports"?
A. "Investigative consumer reports" are detailed reports that involve interviews with your neighbors or acquaintances about your lifestyle, character, and reputation. They may be used in connection with insurance and employment applications. You'll be notified in writing when a company orders such a report. The notice will explain your right to request certain information about the report from the company you applied to. If your application is rejected, you may get additional information from the CRA. However, the CRA does not have to reveal the sources of the information.

Q. How long can a CRA report negative information?
A. Seven years. There are certain exceptions:

Information about criminal convictions may be reported without any time limitation.

Bankruptcy information may be reported for 10 years.

Information reported in response to an application for a job with a salary of more than $75,000 has no time limit.

Information reported because of an application for more than $150,000 worth of credit or life insurance has no time limit.

Information about a lawsuit or an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer.

Q. Can anyone get a copy of my report?
A. No. Only people with a legitimate business need, as recognized by the FCRA. For example, a company is allowed to get your report if you apply for credit, insurance, employment, or to rent an apartment.

Q. How can I stop a CRA from including me on lists for unsolicited credit and insurance offers?
A. Creditors and insurers may use CRA file information as a basis for sending you unsolicited offers. These offers must include a toll-free number for you to call if you want to remove your name and address from lists for two years; completing a form that the CRA provides for this purpose will keep your name off the lists permanently.

Q. Do I have the right to sue for damages?
A. You may sue a CRA, a user or - in some cases - a provider of CRA data, in state or federal court for most violations of the FCRA. If you win, the defendant will have to pay damages and reimburse you for attorney fees to the extent ordered by the court.

Q. Are there other laws I should know about?
A. Yes. If your credit application was denied, the Equal Credit Opportunity Act requires creditors to specify why - if you ask. For example, the creditor must tell you whether you were denied because you have "no credit file" with a CRA or because the CRA says you have "delinquent obligations." The ECOA also requires creditors to consider additional information you might supply about your credit history. You may want to find out why the creditor denied your application before you contact the CRA.

Q. Where should I report violations of the law?
A. Although the FTC can't act as your lawyer in private disputes, information about your experiences and concerns is vital to the enforcement of the Fair Credit Reporting Act. Send your questions or complaints to: Consumer Response Center - FCRA, Federal Trade Commission, Washington, DC 20580.

FREE GUIDE TO DO-IT-YOURSELF CREDIT REPAIR

Credit Repair Steps:

The FTC on Fair Credit Reporting

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