It can be frustrating trying to correct your credit report. You can do everything by the book and still come up short. As a result, many consumers just give up.
I can understand the frustration but it’s usually an expensive mistake to throw in the towel. Government studies show that 1 in 5 credit reports contain material errors. If your credit report has mistaken, don’t become just another statistic and don’t stop fighting. Here are four unconventional tactics you can use to stick it to the credit man and get the results you want.
1. Write Original Dispute Letters
The internet is full of template credit dispute letters that are free to download and easy to use. If you go this route you will save time and money. The only problem is you probably won’t get anywhere with the credit bureaucrats.
That’s because credit bureaus and creditors get thousands of letters every day. Most of these organizations use scanning software which identifies template complaints and send a stock response letter without much human consideration.
A better idea is to write your own dispute letter in your own words. This increases the likelihood that a live person will actually review your claim and consider it. By all means get an idea of what to say by reviewing sample letters but always put it in your own words.
Hint: Although some creditors and credit bureaus allow you to dispute credit problems over the phone or via the internet but don’t fall for it. Unless you put your claim in writing you lose many of the protections offered by consumer protection laws.
2. Don’t Follow The Suggested Path
Just about everything you read on credit repair tells you to first contact the credit bureau. They recommend you go to the creditor only after that fails. This advice is hogwash. It’s also the reason why people get frustrated with the credit repair process and give up. It’s very easy to go round and round with the credit bureau and get caught in a vicious loop.
Don’t fall for that trap. Its fine to contact the credit bureau of course but you should also go after the creditor who reported the negative item in the first place. Remember, they have to prove the information they supplied to the bureau is accurate, verifiable and complete. Again, they have the burden of proof and they have to send you a copy of their proof. If they can’t come up with the goods, they have to instruct the bureau to remove the negative information.
3. Use The Law
The only reason the credit bureaus and creditors respond to disputes is because they have to under the law. It’s in your best interest to understand the basics of these laws and reference them when you write your dispute letters to both the credit bureaus and the creditors. Fortunately, you don’t have to go to law school to leverage these rules.
The most important law to understand when it comes to consumer credit protection is the Fair Credit Reporting Act. This law governs how information about you is gathered, shared and used. Among other things, this law mandates how negative items are removed from your history and how credit bureaus are to behave.
The next law to reference is the Fair Credit Billing Act. This spells out what creditors can and cannot bill you for and how they are supposed to bill you.
Finally, there is the Fair Debt Collection Practices Act. If you fall prey to a collection agency, this law can help you get them off your back in a hurry.
Again, you don’t have to be a lawyer to get some fire power from these laws. Once creditors and credit bureaus see your references to these laws in your letters, they’ll know they are dealing with someone who means business. That might just be enough to get them to play ball with you.
4. Sue the Creditor in Small Claims Court
If a creditor won’t clean up an error that they reported, you can almost always take them to small claims court to force them to get off their duff and do the right thing.
The nice thing about this move is that lawyers aren’t usually allowed in small claims court. That means you’ve got more of an equal playing field. Also, suing in small claims is easy to do and very inexpensive for you. But it’s expensive for the creditor and a pain in their back side. As a result, once you serve papers, the creditor might just stop fighting and clean up their error.
The trick about suing creditors in small claims court is that you have to make sure to fill out the court paperwork correctly and you have to get your claim to the right people. And you have to be on top of the follow up requirements and actually follow through.
There is a lot at stake when it comes to cleaning up mistakes others have made on your credit file. The credit bureaus and reporting creditors may seem like formidable adversaries. But use the law and a little elbow grease. If you do, you’ll have a far better result in most cases.
Figure out where you stand. Before you begin do-it-yourself credit repair, you’ll want to get copies of your full credit reports from all three bureaus (Experian, TransUnion, and Equifax). You can get your reports truly free, once a year, at http://www.annualcreditreport.com or by calling 1-877-322-8228.May 2, 2017
How to Get Something Removed from Your Credit Report
Start With a Credit Dispute Letter. Before you try anything else, you should first make sure the negative entry on your credit report doesn’t have any inaccuracies. …
Write a Goodwill Letter. …
Negotiate “Pay For Delete” …Have a professional remove the negative entry.
What rights do you have with your credit accounts?
No one can legally remove accurate and timely negative information from a credit report. You can ask for an investigation —at no charge to you — of information in your file that you dispute as inaccurate or incomplete. Some people hire a company to investigate for them, but anything a credit repair company can do legally, you can do for yourself at little or no cost. By law:
- You’re entitled to a free credit report if a company takes “adverse action” against you, like denying your application for credit, insurance, or employment. You have to ask for your report within 60 days of receiving notice of the action. The notice includes the name, address, and phone number of the consumer reporting company. You’re also entitled to one free report a year if you’re unemployed and plan to look for a job within 60 days; if you’re on welfare; or if your report is inaccurate because of fraud, including identity theft.
- Each of the nationwide credit reporting companies — Equifax, Experian, and TransUnion — is required to provide you with a free copy of your credit report once every 12 months, if you ask for it. To order, visit annualcreditreport.com, or call 1-877-322-8228. You may order reports from each of the three credit reporting companies at the same time, or you can stagger your requests throughout the year.
- It doesn’t cost anything to dispute mistakes or outdated items on your credit report. Both the credit reporting company and the information provider (the person, company, or organization that provides information about you to a credit reporting company) are responsible for correcting inaccurate or incomplete information in your report. To take advantage of all your rights, contact both the credit reporting company and the information provider.
Step 1: Tell the credit reporting company, in writing, what information you think is inaccurate. Use our sample letter to help write your own. Include copies (NOT originals) of any documents that support your position. In addition to including your complete name and address, your letter should identify each item in your report that you dispute; state the facts and the reasons you dispute the information, and ask that it be removed or corrected. You may want to enclose a copy of your report, and circle the items in question. Send your letter by certified mail, “return receipt requested,” so you can document that the credit reporting company got it. Keep copies of your dispute letter and enclosures.
Credit reporting companies must investigate the items you question within 30 days — unless they consider your dispute frivolous. They also must forward all the relevant data you provide about the inaccuracy to the organization that provided the information. After the information provider gets notice of a dispute from the credit reporting company, it must investigate, review the relevant information, and report the results back to the credit reporting company. If the investigation reveals that the disputed information is inaccurate, the information provider has to notify the nationwide credit reporting companies so they can correct it in your file.
When the investigation is complete, the credit reporting company must give you the results in writing, too, and a free copy of your report if the dispute results in a change. If an item is changed or deleted, the credit reporting company cannot put the disputed information back in your file unless the information provider verifies that it’s accurate and complete. The credit reporting company also must send you written notice that includes the name, address, and phone number of the information provider. If you ask, the credit reporting company must send notices of any correction to anyone who got your report in the past six months. You also can ask that a corrected copy of your report be sent to anyone who got a copy during the past two years for employment purposes.
If an investigation doesn’t resolve your dispute with the credit reporting company, you can ask that a statement of the dispute be included in your file and in future reports. You also can ask the credit reporting company to give your statement to anyone who got a copy of your report in the recent past. You’ll probably have to pay for this service.
Step 2: Tell the creditor or other information provider, in writing, that you dispute an item. Include copies (NOT originals) of documents that support your position. Many providers specify an address for disputes. If the provider reports the item to a consumer reporting company, it must include a notice of your dispute. And if the information is found to be inaccurate, the provider may not report it again.
When negative information in your report is accurate, only time can make it go away. A credit reporting company can report most accurate negative information for seven years and bankruptcy information for 10 years. Information about an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer. The seven-year reporting period starts from the date the event took place. There is no time limit on reporting information about criminal convictions; information reported in response to your application for a job that pays more than $75,000 a year; and information reported because you’ve applied for more than $150,000 worth of credit or life insurance.
The Credit Repair Organization Act (CROA) makes it illegal for credit repair companies to lie about what they can do for you, and to charge you before they’ve performed their services. The CROA is enforced by the Federal Trade Commission and requires credit repair companies to explain:
- your legal rights in a written contract that also details the services they’ll perform
- your three day right to cancel without any charge
- how long it will take to get results
- the total cost you will pay
- any guarantees
What if a credit repair company you hired doesn’t live up to its promises? You have some options. You can:
- sue them in federal court for your actual losses or for what you paid them, whichever is more
- seek punitive damages — money to punish the company for violating the law
- join other people in a class action lawsuit against the company, and if you win, the company has to pay your attorney’s fees
State Attorneys General
Many states also have laws regulating credit repair companies. If you have a problem with a credit repair company, report it to your local consumer affairs office or to your state attorney general (AG).
Federal Trade Commission
You also can file a complaint with the Federal Trade Commission. Although the FTC can’t resolve individual credit disputes, it can take action against a company if there’s a pattern of possible law violations. File your complaint online at ftc.gov/complaint or call 1-877-FTC-HELP.
Just because you have a poor credit history doesn’t mean you can’t get credit. Creditors set their own standards, and not all look at your credit history the same way. Some may look only at recent years to evaluate you for credit, and they may give you credit if your bill-paying history has improved. It may be worthwhile to contact creditors informally to discuss their credit standards.
If you’re not disciplined enough to create a budget and stick to it, to work out a repayment plan with your creditors, or to keep track of your mounting bills, you might consider contacting a credit counseling organization. Many are nonprofit and work with you to solve your financial problems. But remember that “nonprofit” status doesn’t guarantee free, affordable, or even legitimate services. In fact, some credit counseling organizations — even some that claim nonprofit status — may charge high fees or hide their fees by pressuring people to make “voluntary” contributions that only cause more debt.
Most credit counselors offer services through local offices, online, or on the phone. If possible, find an organization that offers in-person counseling. Many universities, military bases, credit unions, housing authorities, and branches of the U.S. Cooperative Extension Service operate nonprofit credit counseling programs. Your financial institution, local consumer protection agency, and friends and family also may be good sources of information and referrals.
If you’re thinking about filing for bankruptcy, be aware that bankruptcy laws require that you get credit counseling from a government-approved organization within six months before you file for bankruptcy relief. You can find a state-by-state list of government-approved organizations at www.usdoj.gov/ust, the website of the U.S. Trustee Program. That’s the organization within the U.S. Department of Justice that supervises bankruptcy cases and trustees. Be wary of credit counseling organizations that say they are government-approved, but don’t appear on the list of approved organizations.
Reputable credit counseling organizations can advise you on managing your money and debts, help you develop a budget, and offer free educational materials and workshops. Their counselors are certified and trained in the areas of consumer credit, money and debt management, and budgeting. Counselors discuss your entire financial situation with you, and can help you develop a personalized plan to solve your money problems. An initial counseling session typically lasts an hour, with an offer of follow-up sessions.