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.
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
PO Box 740241
Atlanta, GA 30374-0241
(800) 685-1111
Trans Union
760 W. Sproul Rd.
Springfield, PA 19064-0390
(800) 888-4213
Experian (formerly TRW)
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 others 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credit bureau reflecting the correction and continue this process until you have cleaned up all inaccurate, false or outdated or unverifiable information.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can only report a negative history for 7 years from first serious delinquency or charge off so be careful to look for outdated information.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!
