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Alternative Financing Methods ->
Cleaning Up Your Credit
Cleaning Up Your Credit You will see advertisements for
credit repair on TV and in newspapers and magazines and on-line. Some
are legitimate, but many are just scams to take your money. If you know
your rights you can handle credit repair on your own.
First, get a current copy of your credit report from each of the
three credit repositories. We have provided direct links to all three
credit repositories elsewhere on our web site. Husband and wives should
obtain individual reports rather than joint reports as it is easier to
challenge inaccurate information from individual reports rather than
from joint reports. It is also easier to challenge information on
reports obtained from the credit repositories separately rather than
from a report which combines two or all three credit repositories.
Second, make a copy of the reports and make notes on your copies
of any discrepancies or derogatory information which needs to be
challenged. Derogatory information, which in fact is accurate, could be
challenged, but probably will remain on your record. You could challenge
a judgment or bankruptcy, for example, that is on your record and
possibly have it removed even if it is accurate, if the credit
repository can't verify the information. This may result in the removal
of the derogatory item from your credit file but you would still have to
answer a question on your mortgage application as to whether or not you
have ever filed bankruptcy or whether or not you have any outstanding
liens or judgments. Lying on a mortgage application is serious business
and could result in fines or jail time. So concentrate on true
"inaccurate" information. Third, follow the credit
repositories instructions on how to challenge information and items that
they are reporting. I have found that taking a clean copy of the report
and actually making notes on those items I want verified and that I am
challenging works just as well as filling in a form which they might
provide. Simply circle the item in question and make the note: "Please
verify this item as it is unknown to me" or "Please verify this item as
it isn't my account" or "I hereby challenge this item as I made all my
payments on time" or "I dispute the accuracy of this item", etc.
Fourth, make a copy of your marked up reports, any forms they
provided that you filled out, and any other correspondence or
documentation you are providing them, and mail the originals certified
or registered mail, return receipt requested, to the respective credit
repositories. The credit repositories must, by law,
contact the source of the disputed items and verify that the information
is accurate. They must do so within a "reasonable time period", unless
they believe that the dispute is "frivolous or irrelevant". Generally
that means within 30 days. If they are unable to contact the source or
verify with them that the information is accurate within that 30 days,
they must remove it from your credit file. Fifth,
follow-up with additional correspondence if you haven't heard from them
within 30 days, indicating that you have given them a reasonable amount
of time and insist that the disputed items be permanently removed. This
follow-up should be done in writing so that you have a record. Always
send correspondence by registered or certified mail, return receipt
requested so that they know that you are serious and you have a written
record for future reference. Sixth, you may have
to follow up with the particular source of the item in question if the
credit repository reports and insists that the information has been
reported by the source as being accurate. The credit repositories merely
report information obtained from outside sources. If the actually source
of the information reports back that the information is accurate than
the credit repository won't change the information. Your next step would
be to correspond with the actual creditor that is the source of the
information. Provide them with your documentation and reasoning why it
is inaccurate and attempt to get them to change the status or agree to
remove the item in question. Get this in writing and request that they
contact any of the credit repositories that they had furnished the
information to, with the correct information. You should also supply a
copy yourself to any credit repository which reported the inaccurate
information and request that they change the information.
Seventh, If a creditor still refuses to change an item or the
credit repository refuses to change an item, you have the right to place
a note in your credit file indicating that you dispute the item and
giving an explanation for any derogatory item. My experience has been
that sometimes they abbreviate your note. Continue to contact them and
insist that they place the exact wording which you desire into your
credit file. For example: "With respect to the late payment in June,
1996, on my Sears account #123456,1 mailed the payment in time and the
check was never cashed and was apparently lost. I immediately replaced
the lost check but it posted as 30 days late." Eighth,
contact any creditor who is showing a late payment, explain the reason
why it was late, indicate that you are a long time customer and deserve
some special consideration, and ask if they would please change your
credit history so that the payment doesn't show as late.
Depending on who the creditor is, what your legitimate reason was, and
how long you have, in fact, been a customer, many creditors will
consider your request.
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