A credit bureau was designed as a way lending and credit companies could access the history of a candidate before extending credit or a loan. It was meant to see who is likely to pay and who is likely to rip off their company.
Through a series of codes and ranking, the level of credit you can receive is based on the collected findings within the credit bureau.
Most of the time, the system is pretty accurate. We may not like the information they have on us sometimes, but sometimes the truth hurts. They have a legal right to do this kind of professional tattletelling. However, when they spread gossip, they have the responsibility to tell it accurately.
A credit bureau is run by people who make mistakes. Sometimes an error will slip through that does not belong on your record that can cause you big problems.
If you've been denied credit, insurance, or employment because of information supplied by a credit bureau, the law gives you the right to have the name of the agency that supplied the information along with their contact information.
When you are denied, you can contact that credit reporting agency and request the same report they gave to others so you can see for yourself what was on the record.
Read your records on a regular basis so you do not face denial by surprise.
If you do see items on there that do not belong, you have the right to dispute it and the responsibility of proving it. If you are in the right, you can do this task on your own. It is not really hard.
If the marks on your report belong there, sometimes they can be removed, but no one can guarantee it. If you are looking for a way out of your credit problems, do not believe promises like these:
Credit Problems? No Problem!
Erase Bad Credit! 100% Guaranteed!
Remove Bankruptcy and Liens from Your Credit File!
So called "credit repair" companies will charge anywhere between $50 to more than $1,000 to fix your credit report. Most of the time all they will do is take your money and tell you what to do in order to dispute the information yourself. Why pay them for information that is already free, especially if you have to do the work yourself.
If you have a bad credit history, all the promises made by these companies will not really help repair your credit overnight. Yes, there are things you can do to lessen the impact, but there is little you can do to make it AAA rating in less than 30 days. You can, however, improve it greatly within 6 months.
If you have claims made on your record that truly are false or you are a victim of identity fraud, you still have to do quite a bit of work to reclaim your name. You can make effective changes within 60 days, but many companies may be reluctant to do business with you until the incidents are completely cleared and that may take up to 7 years.
Accurate items that are within the seven (or ten) year reporting period cannot be erased from your credit record by companies advertising "credit repair" services. Judgments and bankruptcies are rarely ever removed. So how can these companies claim to remove them? They are playing a game of chance with your good name.
The plan is you write to all the credit bureaus and find all the negative information on your file. You will send a separate dispute letter for each negative item to the credit bureau - do one item a month so as to not raise too many red flags where all of your claims will not be read.
With all letters of communications to collection agencies, send them certified mail WITH return signature receipt so you will have a record mailed back to you with their signature as proof they did receive it. You will send the credit bureau a letter like this:
Your Name
Your Address
Your City, State Zip Code
Date
Equifax
P.O. Box 740241
Atlanta, GA 30374-0241
To Whom It May Concern:
I have just received a copy of my credit report and it has raised a concern. The item you have listed [name a specific item on your report including the date, company name and account number] is not accurate. Instead it should read [include what you think it should state - has been paid in full, should be eliminated because you never had an account with them, was paid only 30 days late and not 90...]
Please contact the business who made this error on my report to verify the validity. [Or include proof on your own that the item is inaccurate and state] Enclosed is proof that what I am saying is true.
Sincerely,
YOUR NAME HERE
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In this plan, they are working the odds that 1) the original debtor may be too busy to send the credit bureau proof of the debt and 2) any collection agency who bought the debt may not have accurate records, especially if the debt is older than 3 years.
If the plan goes well, the ones who placed the information on your report will fail to respond to the request for verification within the 30 day period and send you proof that you did behave according to the report record. If undisputed in 30 days, you send them a follow up letter demanding they remove the item from your report and request a new copy of your report like the one below:
Your Name
Your Address
Your City, State Zip Code
Date
Equifax
P.O. Box 740241
Atlanta, GA 30374-0241
To Whom It May Concern:
It has been over 30 days since I brought up a dispute on my credit record to your attention. Enclosed is a copy of that letter I sent you 30 days ago.
I have waited to see if you have in fact contacted that company to prove this mark was not valid and you did not send me any proof that it was valid. As of yet, you did not send me any proof this was a valid entry in my record, therefore I demand you remove the false information immediately.
Please send me an updated copy of my credit report with the correction made.
Sincerely,
YOUR NAME HERE
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At your request, the bureau must send a corrected copy of your report to anyone who received the incorrect version within the past six months.
Playing the odds game will work, sometimes. It is true that these bureaus get so busy that sometimes requests go unnoticed and requests that do not get proper responses in 30 days can be eliminated. It is also true that once an account that is older than 3 years from the last missed payment and is with a credit bureau will probably not have accurate information on the history of the account nor will the original creditor have it. In these cases, even if the entry is valid, it can be removed from your report.
There is also a chance the bureau may have a slower month and are able to process all requests. If you send too many disputes at once, they will dismiss them all as a frivolous case. They may in fact contact the ones who made the report who can in fact back up what they claimed and you will not be able to remove it at all. Disputed claims often come out in a backhanded way against you and is sometimes listed in another negative way such as a charge-off, history of disputes, or other negative trails that can be bad.
Unless your dispute is valid and you have proof, you may want to think twice before doing this. The only way you can get a fair review on items that are negative and valid is if your problems were due to illness or unemployment. A notation will be put by the items during this time period.
If these steps do not resolve matters, you can file a written statement of up to 100 words with the credit bureau explaining your side of the story. This explanation will be included in your credit report.
What To Do If This Does Not Work?
Don't panic. Remember, even if you cannot get all bad marks removed, it is not permanent. All bad marks will go away in 7-10 years depending on the item.
In the meantime, you can do things now to improve your rating despite of what your record says now.
Open up a checking and savings account and maintain $500 or more in each. Having both will get you more points on your overall credit score.
Apply for a small loan from your bank reflecting your savings account, but don't spend it. Put it in your savings account and pay it back on schedule. This will give you a starting history of responsible payments made.
Apply for a credit card from high risk companies such as Capital One once you paid off the bank loan. Don't spend more than $100 a month on the card and pay it back in full each month.
Apply for a gas card and one from a department store which may be easier to obtain once you have paid off the bank loan.
Make a habit of paying all of your utility bills on time. This also weighs in favorably on your report.
Do not pay anything late!
If you do all the above, in 6 months you will show a pattern that you are trying to be responsible. That will give a lot more weight to those looking into your credit than wasting your time disputing valid entries. Most companies are more interested in what you have done in the last 6 months, even more than what you may have done 3 years ago or more.
