If you have bad credit, I have good news! Contrary to what you might have been told, negative items aren’t required to remain on your credit report for 7 to 10 years. The Fair Credit Reporting Act states that all items on your credit report must be reporting 100% accurately, be 100% verifiable, and reporting in a timely manner. If the account you’re disputing doesn’t meet all three requirements that I just mentioned, it must be corrected or removed. Yes, you heard me right, even if you defaulted on a loan, it must be removed if it isn’t accurate or verifiable. The other good news I have for you is, over 79% of credit reports contain errors, which means that those bad accounts that are killing your credit score, stand a great chance of being removed if disputed properly.
Being the founder and CEO of a national credit repair company, you probably think it’s strange that I’m telling you that you can repair your own credit. But the truth is you can. That’s only If you have the knowledge, time, patience and persistence to get the job done. Many people hire my team and I because they don’t have the time or expertise to do it themselves, But some do and you can also.
So let’s jump into how you can get rid of bad credit!
There are several ways you can obtain an updated copy of your credit report, but I’m here to save you time and tell you exactly how, what and why when it comes to getting your credit reports. Once a year you can get a free copy of your credit report from each of the three credit reporting agencies. But it’s better to order all three reports, that come with your scores. If you order a free credit report from each bureau, your scores will not be included and knowing your credit scores are an important part of the credit improvement process. How can you know where you’re going if you don’t know where you are.
I’m sure you familiar with Credit karma, they’ve become a popular choice to get credit reports. Mostly because their credit reports are free. I personally would not recommend credit karma because the scores you get from them have been known to be very inaccurate and the credit reports sometimes don’t include important information that you’ll need. Before you start the credit repair process, having an updated accurate credit report is the most important step. If you have a credit report with incorrect scores with missing accounts, you’re already off to a bad start.
You can conveniently get a copy of your credit report with scores from most credit monitoring companies online. Companies like credit check total offer a tri-merge credit report with scores, for as little as $1. To avoid paying monthly fees with any credit monitoring service, download your credit report and cancel the service the same day.
Regardless of how you decide to get a copy of your credit report, get a credit report and get started.
Your credit payment history and personal information are included in your credit report. But, because there is so much data and the credit reporting agencies and creditors exchange information on thousands of individuals, they often make mistakes. According to the United States Public Interest Research Group, 79% of credit reports contain errors. But those errors that the credit reporting agencies make can be used to help you legally remove the derogatory information.
So, review your credit report carefully!
I recommend that you print out a full copy of your credit report and have a pencil and highlighter handy. There are several important things you need to look out for when you start to review your credit report.
Here’s a short list of errors to look for:
- Is your personal information reporting correctly? Name, date of birth, social security number, address.
- Are the accounts on your credit, actually your accounts? Do you have a family member with the same name and their accounts are reporting to your credit?
- Are the details on each account correct? Is the loan amount correct? Is the amount owed correct? Is the date of last activity correct? It’s common to have a negative account and each of the credit reporting agencies could be reporting a different loan amount for the same exact account. These mistakes work in your favor.
- Are any accounts past the statute of limitations, but still showing? Do you notice any accounts that are reaged and being reported as a new debt although it is old?
- Is any information missing? Do you have accounts that are in good standing, but not being reported? If so, this should be addressed. Are there any accounts you closed that are still open?
- Is all of the information in your report accurate and complete. If not, it must be corrected or removed. The Fair Credit Reporting Act states that even the negative information on your credit report must be reporting 100% accurately, reporting in a timely manner and be 100% verifiable. To put it plainly, even if you defaulted on a loan, if it isn’t reporting accurately, it must be removed. For example, what if you lost your job and your car was repossessed because you had no income or savings to pay for it. Technically, you did default on the loan but if the information isn’t reporting correctly, it must be removed. The good news is that 79% of credit reports contain errors.
While going through your credit report , highlight all the derogatory accounts and on a separate sheet of paper, make note of any mistakes you find. When making a claim to remove negative accounts, gather any proof to support that claim.
The burden of proof falls on the creditor and not you. They must be able to prove that all of the information that they are reporting is accurate, verifiable and 100% complete. In the event that they can’t, the negative information must be removed from your credit report. That’s great news, you should be ecstatic!
After you’ve composed your dispute letter with all the accounts you want to dispute , make sure you include all the evidence to back up your claim. We covered the type of errors to look for in step 2.
It is important to contact both the creditor and the credit reporting agency when challenging the negative information on your report. When repairing credit,most people only dispute with the credit reporting agencies and they depend on the credit agencies to perform an investigation. The credit agencies almost never get proper validation and perform a full thorough investigation, when disputes are submitted to them. That’s why it’s important to contact the creditor as well.
Contact the creditor and request proof that the account belongs to you. If and when they don’t have 100% proof, then you can show the credit agencies that the creditor did not have proper proof and demand that the item be removed from your credit.
Always submit your letters in writing and send them certified mail. It will cost you a little more money, but you’ll have a record of your letters being sent and received. Be sure to include a copy of your credit report with your disputes. Point out any conflicting information within the report by highlighting the credit report.
Your letter should include each account your disputing, the reason for your dispute, a copy of your credit report and proof of identification. Tell the credit reporting agency what you want them to do with each account. If your request is to remove it, be specific and say that. If you need the information updated then say that as well.
After you submit your disputes to the credit reporting agencies and creditors, you should receive results within 30 days. If things go in your favor, your credit report should be updated and the derogatory information should no longer show. During the process of repairing your credit, I would recommend monitoring your credit closely. Be sure that your updated credit report reflects the results that the credit reporting agency sent you.
If the results don’t turn out the way that you want them to , don’t stop there. Follow up with the credit reporting agencies and creditors based upon the responses you receive from the credit reporting agency. There are hundreds of ways to respond, depending upon how and when the creditor or credit reporting agency responded. Going into elaborate detail on how to follow up would take pages and pages and lots of hours. In another article, I’ll go through some common responses from the credit reporting agencies and creditors and how you can respond to beat them at their own game.
Credit bureaus are notorious for keeping sloppy and inaccurate records because they’re managing millions of credit files and their systems are very faulty. Repairing your credit takes time, patience, persistence and understanding of many consumer protection laws like the Fair Credit Reporting Act, Fair Debt Collection Practices Act, Truth in Lending Act and other laws. In addition to knowing which order to dispute the accounts, you’ll need to know which law is being violated by the credit bureaus and creditor.
Credit repair doesn’t just consist of sending dispute letters to the credit bureaus. There are five factors that impact your credit score and payment history is only one of the five factors. Tyler Gregory very wisely said, “ If repairing one’s credit is as easy as sending some dispute letters to the credit bureaus, then why doesn’t everyone have good credit? “.
Repairing your own credit isn’t impossible, you can actually do it. But, credit repair isn’t easy like some people may lead you to believe. It’s not as simple as just mailing off a few letters. Credit repair takes time, skill and persistence to get good results. You have to follow through and respond appropriately after you here from the credit bureaus and creditors, if you want the best results. Just think , if credit repair was easy, everyone would have great credit. Personally, if I had to repair my own credit today, I’d hire a professional with a proven track record. But you have options and the most important thing is that you take action. Bad credit cost you good money, so don’t procrastinate.