Can I really fix my credit?
Of course you can! Many of our readers, and even yours truly has cleared up a few blemishes on their reports. And by the way: everything a credit repair clinic can do for you, you can do for yourself at little or no cost.
What the information provided in this page does is help you fix ERRORS on your credit report and clean up those "questionable" items. While no one can legally remove accurate negative information from a credit report, the law does allow you to request a reinvestigation of information in your file that you dispute as inaccurate or incomplete. On the otherhand, *nudge* *nudge*, *wink* *wink*, it is perfectly legal to challenge ANYTHING on your credit report.
There is no charge for requesting an investigation. The whole key to the credit repair procedure is that if the credit bureaus cannot verify information on your credit report they must remove it. For instance, if a credit bureau cannot contact a collection agency which is reporting a collection on your report, they cannot verify the information, and the credit bureau must delete the entry. Let's meet Edouardo.
Edouardo’s Story
Edouardo’s car, a hand-me-down from his father, is ready to give up the ghost. His girlfriend, Charisse, suggests he try to buy a newer car, though he is reluctant to spend the money. Although Edouardo makes a great living, his credit is in terrible shape due to a large number of unpaid medical bills, the result of an accident. Edouardo has seen advertisements in the local paper for credit repair services, and wonders how easy and how expensive it would be to fix his credit. Charisse makes a few calls for Edouardo looking into credit repair agencies and is suspicious of them. Besides, she once successfully disputed a late payment on her credit report. Edouardo and Charisse decide to see what they can do on their own to fix Edouardo’s credit. |
Basic Credit Repair Strategy
The basic strategy to repairing your credit is as follows:
- Get and review your credit report.
- Analyze your report.
- Make a list of all items you consider to be questionable or negative. Clearly identify each item in your report that you dispute, explain why you dispute the information,
- Write a dispute letter bureaus.
- Send the letter to the credit bureaus. Make sure you send it registered or certified mail.
- Document your efforts.Record when you sent your letters, and the results.
- Wait for the bureaus to investigate your claims.
- Analyze the results.
- Was the item deleted or changed to your satisfaction? You may continue steps 1, 2 and 3 above until you feel the dispute is settled satisfactorily. Remember, there is no charge for a reinvestigation. If you don’t get the results you want, dispute the listing again.
That's all there is to it. Seems easy enough but you must have patience, because 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. Get your credit report.
To obtain free copies of your report, please see Getting and reading your credit report.
| Edouardo contacted each of the credit bureaus, and paid $9.50 each for credit reports from Experian, TransUnion, and TRW. Total outlay so far: $28.50. Note: this is cheaper than the $34.95 charged by many some companies selling a 3-1 credit report. |
2. Analyze your credit report.
You can analyze your credit as outlined in "Decoding Your Report".
After reviewing his credit reports, Edouardo made copies, then highlighted everything he saw as a negative listing. Most of them were medical collections, and were easy to spot. However, he does notice that one of the bureaus is reporting him as late on a payment to one of his credit cards, and he knows he paid it on time.
3. Rank questionable/negative items
Step 2 covered how to identify items, both positive and negative on your credit report. Now you have this list, you should rank each item according to the amount of damage they are doing to your overall credit picture. Rank the most damaging information first, followed by the next most damaging information, followed by those items which are neutral. Do this for each credit report, as remember, they may not all have the same information on them. They may even have duplicate information. If this is the case, you will need to write to each credit agency individually for each duplicate item.
The items here are listed in order of descending importance with the first item being the "most damaging" to your credit.
- Bankruptcy
- Foreclosure
- Repossession
- Loan Default
- Court Judgments
- Collections
- Past due payments
- Late Payments
- Credit Rejections
- Credit Inquiries
4. Requesting Corrections and Disputing Your Credit
What should you challenge?
Everything, and you should always shoot for a complete deletion. 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.
What items are the toughest to get off your report?
You will have the toughest time getting bankruptcies and foreclosures off of your credit report as these things 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.
Edouardo decided to challenge each and every one of his collections, as well as his credit card late payment. He wrote a letter that:
- listed each of his negative listings by name, collection agency and amount of the delinquency
- Under each of the list accounts, he said he was disputing the accuracy.
- He also included his Name, SSN, Address, and a copy of his driver's license.
- Edouardo sent his letters via
Express Mail, which gives him a receipt for the mailing, and
guarantees delivery. Total expense for Express Mail: $36.
- Here is an example letter.
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5. Make sure you send everything registered or certified mail.
This is important, as you must be able to tell when letters were sent and received. It gives you some leverage with the CRAs if they don't respond in the time frame required by law. For certified mail tips and tricks, read this.
6. Document Your Credit Repair Efforts
As soon as you have ordered your credit reports and photocopied your order letters and checks, you must create a precise organizational system to track your correspondences with the credit bureaus and your creditors. Why is this necessary? Unfortunately, credit items you have worked so hard to remove 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. Why take a chance? As you proceed through these steps, keep copies and records of all correspondence you send and receive. Copies of all correspondence are a must, as well as notes on all telephone conversations! Also, if you should encounter any special difficulty and would like help in repairing your credit, you will need 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 agreed upon.
| Edouardo used his Palm Pilot to record when he sent his letters, and put his mail receipts and copies of his letters in a safe place. |
7. Wait for the credit bureau to finishing investigating
Once the credit reporting agency has received your dispute letter, they are obligated to investigate. This obligation is not contingent upon you having been denied credit. According to the Fair Credit Reporting Act of 1997 (see Attachment 3), the credit bureaus must take the following steps:
- The credit reporting agencies must resolve consumers' disputes within 30 days limit
- 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 can not 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 big-three agencies 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. However, this is unlikely to repair any damage done when your credit report was first pulled, so don’t waste your time or energy on this approach.
8. Evaluate the results of your repair efforts.
You did save the original credit report your ordered, didn’t you? And each item you challenged? Good, you will need them to evaluate how well you did. It’s all part of Step 5 above, documenting your efforts.
When you get your “repaired” credit report back from the credit bureaus, they will summarize what changed on your credit report due to your challenges. You can compare this list to your own notes or just to the previous credit report.
9. Specialized techniques:
Depending on the type of listing, you may also want to try these separate 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 report.
- Judgments.
If you were never served for a judgment, you may have a chance of
getting it vacated (voided), or there may be other technicalities that you can use. Check out our new section on how to do this.
The results of each item will have been resolved in one of five 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 bureaus are legally obligated to respond in writing within 30 days, so if they don't, it is highly unlike they are ignoring you.
- 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 Credit bureau disputes are not handled by computers, but by people, so the possibility that your claims was misunderstood, overlooked or mishandled is good. Fixing your credit takes time, and there is nothing you can do to expedite the process. However, you can always resubmit your claims.
Edouardo receives his responses from the credit bureaus within the time allowed by law and eagerly rips open the envelopes. He was pleased to see that half of the collections were removed from his credit report and the late payment on his credit card has been corrected. On 3 of the collection accounts on his Equifax report, the results of the investigations were listed as "verified". Trans Union deleted all of the collection account listings, but Experian only deleted one of them. The rest of the listing investigations were listed as "verified". |
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 threatening 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 agency so that they hold up your progress. (Remember, they cannot legally stop you from restoring accurate information but the people who run the agencies, 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.
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After 3 total submissions to the bureaus disputing his credit, Edouardo succeeds in removing all of his collection accounts from his credit bureaus except for one on Experian. He recorded each transaction in his Palm Pilot, and the entire process took him 4 months. Each submission cost approximately $36 in mailing fees. He could have done the mailing cheaper by sending rregularregistered mail (about $10 instead of $36), but decided he wanted to save time by sending his disputes by Next Day Mail.
Edouardo's total costs: $132
Time
it took to remove the negative listings: 4 months |
Sample Letters for disputing credit
Sample Letter 1 - Initial letter to credit bureaus
Dispute Letter for follow on credit bureau correspondence
Removing inquiries
What if a removed negative item comes back on my credit report?
Ok, you’ve removed a listing and are breathing a deep sigh of relief. Then you get a letter in the mail from a credit bureau telling you the item has been added back on. What happened?
Reverified listings
This is actually becoming more commonplace: since the new credit laws require that the bureaus investigate and resolve your disputes within 30 days, they will sometimes remove the negative information temporarily until they get the information verified as true. Then they will put back any information verified to be true and notify you of this.By law, they can do this, but they have to notify you in writing.
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