By BUYING AND SELLING BY THOMAS KHAMMAR & BRENT PARSONS
One of the things that you should take a look at if you are planning to buy a home or refinance in the next year is your credit report. Being prepared with a good credit report will help you receive the best loan options on the market.
In this article you will learn the ways of removing negative items from your credit file, or repairing your credit. These are the exact same methods credit repair clinics and attorneys charge up to $3,500 to perform.
Steps to Repair Your Credit 1. Obtain your credit reports from Experian, TRW and Equifax. 2. Review the reports and notate the items that reflect any negatives, such as late payments or non-payment. 3. It is completely legal for you to dispute items on your credit file even if you know they are correct. You are simply testing to see if your creditors have maintained the proper records to verify the dispute. You have a very bad memory and forgot that the negative accounts on your credit file are really yours. 4. Dispute the negative items with the credit bureaus. This can be done by writing letters to each of the bureaus advising that the items are wrong. The bureaus have forms that you can use, but a good tip to slow them down is to avoid the form. By slowing them down, you increase your chances that the item cannot be verified within the time-frame allowed. Another hint, do not confirm the account if any information about the item is wrong.
A final hint on this matter is to send disputes during busy times of the year. For example, the first to middle of November can cause a delay in verification because of Thanksgiving. Christmas rush for the creditor and the bureau can catch them before they can thoroughly investigate within a reasonable time. 5. Send the letter yourself. By sending it through someone else, it looks like you are paying someone to work on this for you. If you can afford to pay someone to fix your credit, they might assume that you can pay off the negative items on your report. 6. Write one letter for each item that you are disputing.
If you are disputing an inquiry, write that you have never applied for credit with this creditor. If there is a negative item that you want removed from your credit, such as a bankruptcy, charge off or collection account, you may want to write that this is not your account and you want it removed immediately.
If the account is now paid off, but was seriously past due at one time, do not write that it’s not your account. Instead, write that it is your account but was never past due and you need it updated to say that everything has always been current. 7. Send your dispute letter by certified return receipt mail. This will reduce your risk of lost mail within the credit bureau and increase your chance of a prompt response. If you have received no answer to your dispute after 30 to 37 days, it must be that the information was either inaccurate, or it could not be verified. In either case, according to the Fair Credit Reporting Act, the items must be immediately deleted. 8. Disputed items are removed or corrected. Items that were not reverified are removed. 9. For items that were not removed, contact the creditor directly. Start by asking them for proof that the account is yours. Allow this to be mailed to you, if they have it. If the creditor is able to supply the written proof you request, offer to settle the debt for 10 cents on the dollar provided that you have the money. If they refuse, tell them that you will file bankruptcy and they will get nothing. This will certainly open them up to negotiating with you. 10. Persistence will prevail. Consumers have found it possible to eliminate negative marks on credit reports simply by going through this process of disputing items over and over again. If you don’t have the money to make payment arrangements, start back at Step 1 of this section. Remember that the laws are in your favor and you are legally allowed by Federal Law to dispute the negative items on your credit file every 30 days. You are allowed to repeat this process as many times as you wish until the Credit Bureaus cannot verify the item and must remove it. 11. If you agree to make payment arrangements with any creditor, do so only under one condition. The condition is that before you pay any money, the creditor must mail you a written agreement that they will report the account to the credit bureaus as current, paid off and never late. Otherwise, it may still remain on your credit file and may not be worth paying. (The Powerhouse Team 310-482-2015 or)
Originally published in the Santa Monica Daily Press print edition on September 7, 2005. Read the original PDF.