Need Credit Repair?
There is a LOT of advice online about how to remove negative items from your credit reports.
Unfortunately, most of that advice is just plain wrong.
What NOT to do
Disputing Bad Credit
One of the most effective ways to remove negative items from your credit report is to dispute that information with a credit bureau or a data furnisher (a data furnisher is someone who reports information about you to a credit bureau). Watch out for some common pitfalls in doing this.
Don’t get yourself sued: If you dispute a sleeping debt that’s been sitting on your credit report but you do in fact owe the debt, you could possibly wake up a sleeping creditor. This includes getting sued when you could have avoided this if you had just left the account alone. There are some exceptions to this. One such exception is to dispute a debt that is too old for the creditor to sue you for (this depends on what state you live in… see statute of limitations).
Don’t file false or frivolous disputes: Some credit repair blogs advise people to dispute information that they know to be accurate. For example, if an account actually belongs to you, do not dispute it as “Not my account” or “fraudulent account”. The logic behind filing these types of disputes is that if a creditor does not respond to the credit bureau within 30 days, then the account will be deleted from your report. While it’s true that unverified information will be deleted, this strategy works less than 10% of the time. If it doesn’t work, then it will be on record that you submitted a frivolous (or untrue) dispute which will make the account much harder to remove later on by using more effective strategies.
Don’t “play” lawyer: A lot of credit repair blogs provide sample dispute letters for you to mail to creditors to get negative items removed from your credit report. Some of these letters include laws and regulations to make you practically sound like a lawyer. This is one of the most worrisome things about bad advice online. Here’s the problem with trying to sound like a lawyer in your letter:
A lot these letters mention laws that don’t apply. One of the most popular is the Fair Debt Collection Practices Act (FDCPA). Lenders and credit card companies are not subject to this law (in other words, they don’t have to follow it). The FDCPA aplies to “debt collectors”.
A debt collector is a company who collects a debt on behalf of another (with certain exceptions). In short, the FDCPA only applies to debt collectors.
Imaginary laws: Just because you read something online doesn’t make it true. Over the past few years, some unscrupulous people have been selling a so-called “powerful” letter that supposedly removes charge offs, collections, repossessions and other big ticket items from your credit reports.
This tactic is known as the “Section 609 dispute letter”. A Section 609 dispute letter is based off of Section 609 of the Fair Credit Reporting Act (FCRA), a federal law that governs how the credit bureaus must disclose information to consumers.
According to the sellers of this letter, a credit bureau must delete a negative account from your credit report if they are unable to send you a copy of the contract bearing your signature proving that you owe the debt. Here’s the problem with that theory… there is NO law stating that a credit bureau has to send you any contracts at all. It simply doesn’t exist. Now, before you defend the 609 dispute letter strategy and say: “Hey!... I sent that letter and it worked for me!”, then you should click on this link to understand WHY you BELIEVE it worked for you (it didn’t, but something else actually happened). Learn why is a 609 dispute letter is really a 611 dispute letter in disguise.
Unenforceable laws: This is where most people can’t seem to get very far fixing their credit, or where a consumer lawyer isn’t willing to sue a bad actor on your behalf, even if you believe to have a legitimate grievance against a company who violated your rights. Here’s why… while some credit reporting laws are enforceable in a private lawsuit (meaning you CAN sue the wrongdoer), most credit reporting laws are not (where you cannot sue the wrongdoer even if you were harmed by their illegal conduct). In fact, there are several laws under the Fair Credit Reporting Act that only allow state and federal regulators to sue the violator (click here for some examples). Don’t set yourself up for failure by citing laws that do little or nothing to get you the results you need.
Okay, so I told you what NOT to do in fixing your credit.
I get it, you’re not interested in knowing what doesn’t work, you’re here to find out what DOES work.
This blog can be useful for the Do-It-Yourself (DIY) credit repair enthusiast or even mortgage and real estate professionals helping their clients get approved for a home loan.
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