Read my blog

30
Jan

Clean Credit Report Errors

Surely you’ve heard it’s smart to keep an eye on your credit reports to avoid being slapped with an error, inaccuracy, and derogatory item. There’s been tremendous amounts of research into the accuracy of credit reporting and without encouraging results.

According to a study by the U.S Public Interest Group 79% of credit reports contain errors. The Federal Trade Commission released a study in 2013 that appeared on 60 Minutes where they discovered that 21% of consumers had verified errors on their credit reports.

It matters not who’s right. The point is millions of Americans have errors on their credit reports and this should come as no surprise. Congress has passed considerable legislation in attempts to make it easier for consumers to remove errors, inaccuracies, and questionable listings.

The purpose of this article is to show you exactly how to clean up credit report errors and exercise your rights. After all your credit report and score are the two single most important pieces of information about you, and they’ll directly dictate your quality and lifestyle across the board.

Get a FREE credit consultation with a certified FICO professional by calling toll-free 1-877-418-7596.

1. What’s Legal?

There’s much ado about the legality of removing bad credit. Many of the talking heads on TV, consumer advocacy groups, and so called financial pundits preach endlessly about how it’s illegal to remove accurate bad credit from your credit reports. This is totally bogus!

The truth is it’s completely legal for you to challenge the accuracy of any item on your credit report that you believe is questionable, inaccurate, and made in error. The Fair Credit Reporting Act (FCRA) passed way back in 1970 is the legislation that gives you this right.

After all there’s millions of Americans suffering from errors on their credit reports. The FCRA is exactly like the 19th Amendment that gives women the right to vote. Congress didn’t pass this law to protect the credit bureaus from consumers.

In the past four decades and counting there’s never once been an individual that’s faced any legal or civil consequences for challenging and disputing an item on their credit reports. Moreover if you really examine the FCRA it says that items on your credit report must be verifiable.

In other words you’re merely exercising your rights when you file a credit report dispute and challenge an item on your credit history. Further there’s been countless consumer lawsuits along with government fines issued to the credit bureaus.

In all these court cases and over all these years, no one has clearly defined the term accurate. Judges will typically exercise reasonable common sense but there’s never been a clear definition of the term.

Yet this continuous stream of baloney is injected every time you turn around, that it’s somehow illegal to exercise your rights and dispute accurate bad credit. These pundits rarely if ever share how spotty credit reporting truly is and how easily you can get slapped with errors on your credit history.

Nor how difficult it is to remove these errors that are negatively impacting your credit score, and your life. Instead their banging a drum about it being illegal to remove so called accurate bad credit. You can sleep soundly knowing your front door won’t be broken down by a swat team for any credit bureau dispute.

2. Credit Bureau Dispute

The FCRA is the legislation that gives you the right to challenge and dispute errors on your credit reports. You’ll first need to grab a copy of all three of your reports from Equifax, Experian, and TransUnion. It’s common for you to see slightly different information on each of your reports.

Next you’ll need to identify the questionable listings you’d like to challenge and potentially remove. There’s three ways to dispute credit report items online, over the phone, and by mail. Listen it’s imperative that you only dispute items on a specific credit report, with that particular credit bureau.

For example if you have a charge off item on your Equifax credit report, you’ll need to file an Equifax dispute. If this charge off is also on your Experian and TransUnion credit reports then you’ll need to file two additional disputes, one with each of those two credit bureaus.

You see the credit bureaus do not communicate with one another, there separate businesses. One of the most common deadly mistakes consumers commit is to assume the exact same information is on all three of their credit reports. Along with the false belief that disputing one credit bureau is challenging the item on all three credit reports.

The FCRA says the credit bureaus must investigate consumer disputes by contacting the creditor that’s reporting the item and verifying the account, along with any relevant details. If an item can’t be verified then by law it must be removed from your credit report.

The big challenge however is to get the credit bureaus to investigate. This is because the bureaus are for profit businesses. They’re not government agencies and when they investigate consumer disputes they’re spending money that’s otherwise profits.

This was the original purpose of the FCRA to require the credit bureaus to investigate consumer disputes and errors on their credit report, seeing as how this information controls our life. Unfortunately some politician thought it’d be a good idea to let the credit bureaus first decide if your dispute is valid or invalid.

Only on valid disputes will they investigate. This decision was made despite the credit bureaus long history of being fined by the FTC along with many state attorney generals, and being sued by consumers. One of the most egregious violations is a few years ago when our government required the credit bureaus to set up toll-free phone numbers to handle consumer disputes.

Unfortunately the credit bureaus weren’t required to have employees answer these phones. Naturally the FTC came in again and fined all three credit bureaus $2.5 million collectively. On an aside a 1980’s review revealed that 44% of all FTC complaints were made against the credit bureaus.

It’s mission critical to fully grasp the credit bureaus are not your friend, part of our government, or any legal authority. They’re a business just like your local grocery store. Their for profit businesses and you can buy stock in two of them, today. Many of these laws are intended to give you and every average consumer the ability to protect yourself from these dangerous and aggressive shark filled waters.

Get a FREE credit consultation with a certified FICO professional by calling toll-free 1-877-418-7596.

3. Debt Collections

Consumers are understandably overwhelmed when dealing with debt collections. There’s two common and deadly sins and the collection agencies are betting that you’ll commit them. The first is believing that by just paying the collection this will somehow improve your credit score.

It makes logical sense but the reality is many consumers see their credit score take a dive. This is because the paid collection appears to be recent delinquent activity rather than financial responsibility. You see a paid collection on your credit report is not a positive credit building item.

The second deadly sin is to simply ignore debt collectors. This frequently results in your account being sold from one collection agency to many more. Each debt collector being able to report bad credit about you on your credit report, along with calling you night and day, and of course sending you threatening letters.

Ultimately with the vast majority of unpaid debts a collection agency will file a civil lawsuit. As in they’ll sue you in a court for repayment. This can lead to a judgment against you and potentially even having your wages garnished.

What’s worse is the debt collection industry consistently breaks the law and violates consumer rights. One of the most common tactics is for them to re-age consumer debt accounts. This way they can continue to attempt to collect payment from you.

You see the vast majority of consumer debt accounts have a legal time window for which you’re responsible for payment. This is called the statute of limitations and it’s typically seven years from the first date of delinquency. This will vary from state to state so please investigate your local listings. Once this time expires then the debt is forgiven and you’re no longer legally responsible to make payment.

The most effective weapon to fight debt collectors is to request account validation. This needs to be done in writing and using certified mail. This is one more of your rights protected by the Fair Debt Collection Practices Act (FDCPA).

The collection agency will have to respond by providing you with the documents, evidence, and paperwork that proves this is your account and they own the legal collection rights to it. If they’re unable to validate your account, then you’re no longer responsible and they’re suppose to notify the credit bureaus to have them remove collections from credit report files, regarding this account.

Obviously debt collectors rarely follow the rules and you can see abundant evidence of this from all the FTC fines. Many folks feel as if they’re in the ancient biblical tale of David versus Goliath. Wise consumers will often hire professional credit repair services with the legal resources to enforce their rights.

Get a FREE credit consultation with a certified FICO professional by calling toll-free 1-877-418-7596.

4. Pathway to Excellent Credit

The pathway to credit score repair and transform this number from a liability into an asset includes both cleaning up credit report errors and creating a trail of positive payment history. You see the negative listings is what’s damaging and dragging your credit score down.

Once we remove bad credit we’ll need to replace that with positive responsible use, this is how to build your credit score. Naturally you can do this by paying your current bills on time and many individuals will investigate credit cards for rebuilding credit.

It’s vital that you show available and unused credit. For example, if you have a credit card with a limit of $1,000 you’ll benefit by having a monthly balance of about $300. Doing this will improve your utilization ratio. This is the second most important item when your credit score is calculated and it represents about 30% of your overall score.

This crucial piece of the credit scoring algorithm looks directly at the amount of debt you have and compares that to the amount of available unused credit. In our example you’d have $700 of available and unused credit. Obviously this will make you appear as a better risk, than having your credit card maxed out.

5. Dangerous Shark Filled Waters

The unavoidable truth is while there’s many benefits to our system of credit, there’s also abundant flaws. It’s clearly not consumer friendly and navigating these shark filled waters between the credit bureaus and the debt collectors often leaves most consumers feeling as if they’re being eaten alive!

One of the emerging trends in our brave new world is for employers to now check applicants credit reports before offering them a position. According to a CBS News article around 30% of all employers will check your credit before offering you a job. You don’t just have to live with less than perfect credit and surely not for seven long years.

Every last one of these alphabet soup laws have been passed to protect you and give you rights to fight back. While most consumers get frustrated and just give up, which by the way is the the goal of the credit bureaus.

Wise individuals will get professional credit repair help from a legal and legitimate credit repair firm. Get a FREE credit consultation with a certified FICO professional by calling toll-free 1-877-418-7596.