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Can You Really Fix Your Credit?!

Credit, credit cards, debt

Well, of course you can! I did, twice over!! Most consumers understand that everything a credit repair clinic can do for them, they can do for themselves at little costs, but I think it bears repeating — EVERYTHING A CREDIT REPAIR COMPANY CAN DO FOR YOU, YOU CAN DO FOR YOURSELF! The information I provide here will assist you in fixing inaccurate information on your credit report. However, no one can legally remove accurate negative information from a credit report. The law allows anyone to investigate any information on their credit report that they deem inaccurate or incomplete at no charge, and this can be done simply by going online or writing a letter. The KEY to the credit repair process is that if a credit bureau cannot verify information on your credit report it must remove it! It’s really that simple. The difficult part is following a specific action plan that could last six months or more! Before you get discourage, just answer this questions — How long have you been existing with bad credit? Now compare your answer to a six-month credit improvement plan!

CREDIT REPAIR ACTION PLAN
1. Order your credit reports
2. Examine your report
3. Make a list of your disputed items
4. Dispute and Document
5. Analyze results
6. Specialized techniques. Were the items deleted or changed to your satisfaction? You may repeat steps 4 and 5 above until you feel the dispute is settled satisfactorily. There is no charge for a re-investigation. If you don’t get the results you want, dispute the listing again.

Easy enough, right? The hard part is patience. 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. Order your credit reports.

Find out what the top three credit bureaus (Equifax, Experian and TransUnion) are saying about you. It’s likely that they’re all slightly different. Different?! Yes, different! Creditors don’t have to report to all three credit bureaus, so they typically report to the credit bureau to which they also subscribe. So, don’t just order your report from one bureau, you’re just wasting your time and money because you are not reviewing your entire picture. To obtain free copies of your credit report from Equifax, Experian and TransUnion go to www.annualcreditreport.com, which is the only authorized source for consumers to access their annual credit report online for free; call (877) 322-8228 or you may complete the form on the back of the Annual Credit Report Request brochure, and mail it to: Annual Credit Report Service, P.O. Box 105281, Atlanta, GA 30348-5281. You can order your credit report from all three bureaus at once or at different times throughout the year, but you can only receive a free copy of your credit report once a year from each bureau. Be sure to order from this centralized source! If you go directly to the credit bureau, you will be charged a fee unless you fit the criteria below for a free report.

If you’ve been denied credit, insurance or employment because of your credit history, you are entitled to a free copy of your credit report from the credit bureau, but it’s only the credit bureau that the company requested your credit report from. The company you applied to must supply the credit bureau’s name, address and telephone number. You have 60 days after receiving the denial notice to request your copy.

If you want to review your credit reports more frequently, you can order directly from the credit bureaus, via their web sites, by phone or mail. Costs vary from state to state, but in most cases, it can cost up to $9.95 per credit report. All three credit bureaus allow you to review your report online.

2. Examine your report.

Nearly every consumer has an error on at least one credit report from one of the major credit bureaus. Credit bureaus generate your credit report on information they receive from your creditors; they don’t verify the information or monitor your report for you. Keeping your credit report accurate is, like it or not, your job. Carefully look for everything from typing errors, outdated, incomplete and redundant information to inaccurate account histories. You’ll need to make a thorough list of items you dispute and why. Be meticulous and don’t write on your original credit report. Make a copy. You’ll be including a copy of your original with your dispute letter if you choose to dispute via mail.

A credit report is basically divided into four sections: identifying information, credit score, public records, credit history and inquiries.

Identifying information is just that — information to identify you. Look at it closely to make sure it’s accurate. It’s not unusual for there to be two or three spellings of your name or more than one Social Security number, usually because someone reported the information that way. Other information might include your current and previous addresses, your date of birth, telephone numbers, driver’s license numbers, your employer and your spouse’s name.

The next section is your credit score/score summary. The score summary (FICA or FICO) is the overall rating of your future loan worthiness as determined by many financial factors devised by the Fair Isaac Corporation. Generally scores exceeding 630 to 640 are considered by banks as worthy of loans. The lowest scores are in the low 400’s and the highest scores close to 850 (very few). Scores between 600 and 700 are very common and considered very good. Scores below 575 are considered a risk.

This is a comprehensive list of the information considered by Fair Isaac scoring models in calculating a FICO score at one of the major credit bureaus. This information was released 6/8/2000 and was taken directly from the Fair Isaac website.

Past payment history
➢ Account payment information on specific types of accounts (bank cards, retail accounts, installment loans, finance company accounts, mortgage, etc.)
➢ Presence of adverse public records (bankruptcy, judgments, suits, liens, wage attachments, etc.), collection items, and/or delinquency (past due items)
➢ Severity of delinquency (how long past due)
➢ Amount past due on delinquent accounts or collection items
➢ Time since (recency of) past due items (delinquency), adverse public records (if any), or collection items (if any)
➢ Number of past due items on file
➢ Number of accounts paid as agreed

Amount owing
➢ Amount owing on accounts
➢ Amount owing on specific types of accounts
➢ Lack of a specific type of balance, in some cases
➢ Number of accounts with balances
➢ Proportion of credit lines used (proportion of balances to total credit limits on certain types of revolving accounts)
➢ Proportion of installment loan amounts still owing (proportion of balance to original loan amount on certain types of installment loans)

Length of time established
➢ Time since accounts opened
➢ Time since accounts opened, by specific type of account
➢ Time since account activity

Search for and acquisition
➢ Number of recently opened accounts and proportion of accounts that are recently opened, by type of account
➢ Number of recent inquiries
➢ Time since recent account opening(s), by type of account
➢ Time since inquiry(s)
➢ Re-establishment of positive history following past payment problems

Types established
➢ Number of (presence, prevalence and recent information on) various types of accounts (bank cards, retail accounts, installment loans, mortgage, consumer finance accounts, etc.)

Following the FICO score will be a Score Factor section with several numbers. These numbers represent the following and were the criteria in determining the Fair Isaac Score.

A 01 Current balances on accounts
B 02 Delinquency on accounts
C 03 Too few bank revolving accounts
D 04 Too many bank revolving accounts
E 05 Number of accounts with balances
F 06 Number of finance company accounts
G 07 Unable to evaluate recent payment history
H 08 Number of recent inquiries
I 33 Proportion of current loan balance to original loan amount
J 09 Number of accounts opened in the last twelve months
K 10 Proportion of current to high credit on banking revolving or all revolving accounts
L 11 Current balances on revolving accounts
M 12 Length of revolving account history
N 13 Length of time (or unknown time) since account delinquent
O 14 Length of time accounts have been established
P 15 Insufficient or lack of banking revolving account information
Q 16 Insufficient or lack of revolving account information
R 17 No recent (non-mortgage) account balance information
S 18 Number of accounts delinquent
T 19 Too few rated accounts current
U 24 Lack of recent balances on revolving/open accounts
V 20 Length of time since legal item filed or collection
W 21 Amount past due to accounts
Y 32 No recent installment loan information
Z 30 Length of time since most recent account established
* 37 Number of finance company accounts established relative to length of finance history
* 25 Length of installment loan history
* 26 Number of revolving accounts
* 99 Lack of recent history on finance accounts, or lack of finance accounts
* 31 Too few accounts with recent payment history
* 28 Number of accounts established
* 98 Lack of recent information on auto loan, or lack of auto loans
X 36 Length of time open installment loans have been established
X 39 Serious delinquency
X 40 Derogatory public record or collection filed

The next section is your credit history. Each account will include the name of the creditor and the account number, which may be scrambled for security reasons. The entry will also include:
➢ When you opened the account
➢ The kind of credit (installment, such as a mortgage or car loan, or revolving, such as a department store credit card).
➢ Whether the account is in your name alone or with another person
➢ Total amount of the loan, high credit limit or highest balance on the card
➢ How much you still owe
➢ Fixed monthly payments or minimum monthly amount
➢ Status of the account (open, inactive, closed, paid)
➢ How well you’ve paid the account

Very often, it is difficult to tell if an entry is negative or positive. The following table will help you identify every negative listing on your credit report.

Negative Credit Indicators
If the entry contains one or more of these indicators, then the listing is negative. If the entry contains none of these indicators, then the listing is positive.

Experian (formerly TRW) Credit Report
➢ Any item marked with an asterisk
➢ Any inquiry

TransUnion Credit Report

➢ Any item rated higher than I1, M1 or R1
➢ Any item listed as repossession, foreclosure, profit and loss write-off/charge-off
➢ Paid profit and loss
➢ Write-off, paid charge off, settled, settled for less than full balance, or included in bankruptcy
➢ Any collection amount, whether paid or not
➢ Any court account, including a lien, judgment, bankruptcy chapters 7, 11 or 13, divorce, satisfied lien, or satisfied judgment
➢ Any item showing one or more thirty, sixty or ninety day late payments in the column to the far right
➢ Any inquiry

Equifax Credit Report

➢ Any item rated higher than I1, M1 or R1
➢ Any item proceeded by a “>>>>” icon
➢ Any item listed as repossession, foreclosure, profit and loss write-off/charge-off, paid profit and loss write-off, paid charge-off, settled, settled for less than full balance, or included in bankruptcy.
➢ Any collection amount, whether paid or not
➢ Any court account, including a lien, judgment, bankruptcy chapters 7, 11 or 13, divorce, satisfied lien or satisfied judgment
➢ Any item showing one or more thirty, sixty or ninety day late payments in the column to the far right
➢ Any inquiry

FICO Score
It’s common nowadays to use a shared scoring system. The brand name is FICO and it’s quickly becoming the “generic” term (much like Band-Aid and Q-Tip). This scoring system allows lenders to see your “big picture” without needing to look at each entry. Some lenders will have automatic disqualifiers such as bankruptcies, charge-offs or simply being late in the last 6 months, regardless of your score.

What the codes mean:

O= Open (entire amount due each month, i.e, American Express)
R= Revolving (payment amount variable, i.e., Visa)
I= Installment (fixed number of payments, i.e., auto loan)

C= Current
N= Current account/zero balance-no update tape received
0= Current account/zero balance-no update tape received
1= 30 days past the due date
2= 60 days past the due date
3= 90 days past the due date
4= 120 days past the due date
5= 150 days past the due date
6= 180 days past the due date
7= Bankruptcy Chapter 13 (Petitioned, Discharged, Reaffirmation or Debt Rescinded)
8= Derogatory (e.g., foreclosure proceeding, deed in lieu)
9= Bankruptcy Chapter 7, 11, 12 (Petitioned, Discharged, Reaffirmation of Debt Rescinded)
G= Collection
H= Foreclosure
J= Voluntary Surrender
K= Repossession
L= Charge Off
B= Account condition changed, payment code not applicable
-= No payment history that month

J= Joint
I= Individual
U= Undersignated
A= Authorized User
T= Terminated
M= Maker
C= Co-Maker/Co-Signer
B= On behalf of another person
S= Shared

3. Make a list of your disputed items

You need to rank each item on this list according to the amount of damage it is doing to your overall credit score, with the most damaging listed first. Do this for each credit report since they may not have all of the same information or duplicate information.

The following items are listed in order of descending importance with the first item being the most damaging to your credit score:

1) Bankruptcy
2) Foreclosure
3) Repossession
4) Loan Default
5) Court Judgments
6) Collections
7) Past due payments
8) Late Payments
9) Credit Rejections
10) Credit Inquiries

Also, if your creditor has NOT notified you of negative information they have recently placed on your credit report, they are 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. Dispute and Document

My recommendation is to write a letter detailing each mistake and stating why it’s wrong, enclose a photocopy of your credit report with the mistakes circled, and include any supporting documentation.

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. You’ll just have to wait the required 7 to 10 years after the last activity date before the negative item can be deleted.

As soon as you have ordered your credit reports and photocopied them, your letters and checks, you must create a precise organizational system to track your correspondence with the credit bureaus and your creditors. Why is the necessary? Unfortunately, credit items you have worked so hard to remove can 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. Don’t take chances! As you proceed through these steps, keep copies and records of all correspondence you send and receive. Copies of all corre3spondence area must, as well s notes on all telephone conversations! Also, if you should encounter any special difficulty and would like help in repairing your credit, you will need all of 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 agree upon.

Note: You will have the toughest time getting bankruptcies and foreclosures off of your credit report as these items 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.

Once the credit bureau receives your dispute letter, it is 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:

➢ The credit bureau must resolve consumer disputes within 30 days.
➢ 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 cannot 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 three big credit bureaus 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.

5. Analyze Results

When you get your “repaired” credit report back from the credit bureaus, they will summarize what changed on your credit report based on your disputes. You can compare this list to your notes and/or the initial credit report you received.

The results of each item will have been resolved in one of three different ways:

➢ 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 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.
➢ 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, just remember, credit bureau disputes are not handled by computers, but by people, so the possibility that your claims are misunderstood, overlooked or mishandled is good. Repairing your credit takes time, and there is nothing you can do to expedite the process. All you can do is 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 insistent 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 bureau so that they hold up your progress. Remember, they cannot legally stop you from restoring accurate information but the people who run the bureaus, 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.

6. Special techniques

Depending on the type of listing, you may also want to try these 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 credit report.
➢ Judgments – if you were never served for a judgment, you may have a chance of getting it vacated.

Still have questions, need more clarification or a little hand holding after all of this, just give me a call or send me an email; I’d be happy to help!

PS Here’s some useful information to contact all three of the major credit agencies:

 

Federal Trade Commission
Consumer Response Center (877) 382-4357

Equifax
P.O. Box 740241
Atlanta, GA 30374-0241
(800) 685-1111 or (888) 873-5392

 

Experian (formerly TRW)
P.O. Box 2104
Allen, TX 75013-0949
(888) 397-3742

TransUnion
P.O. Box 2000
Chester, PA 19022-2000
(800) 888-4213 or (800) 916-8800

By: doma

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