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There are no secrets to repairing your
credit. Many shady credit repair agencies would
love you to think the contrary. Negative items
can be removed from your credit report and you
can do it yourself. One does not need a credit
repair "expert" or "law firm" to do it either.
While the credit world can seem complex to the
average individual, the basics are really simple
once you know them.
Fact: You can remove negative items from
your credit report.
According to the FCRA, you have the legal
right to dispute any piece of information with a
credit bureau. Upon doing so, the credit bureau
then has 30 calendar days to investigate the
item(s). After that time, the credit bureau will
either update the item as you request or leave
it alone if they proved it was correct to begin
with. If you submit additional information on
the dispute during the 30 days, the credit
bureau is allowed to take an additional 15 days.
Disputes can be submitted online at the credit
bureau's site or simply sent via postal mail,
which happens to be my recommendation. Disputes
sent in based on the free credit report now
provided under FACTA are given 45 days to
resolve.
Myth: Collection agencies can call you
anytime and do as they please.
To stop collection agencies from calling you,
simply send them a cease and desist letter
stating they are only allowed to contact you via
postal mail. This ability is afforded you via
the FDCPA. Collection agencies have a series of
actions they must do to be in compliance. You
would be surprised at just how many FCRA and
FDCPA violations are committed on a daily basis
by many collection agencies. Never speak with a
collection agency over the phone. Conducting
discussions via written form is best because you
have proof.
Fact: Paying a collection account will not
improve your score.
As far as credit scores go, a paid collection
account is the same as an unpaid one. Your
official credit score is called a FICO score. It
takes into account many things such as:
• Age of overall credit file.
• Number of accounts in good
standing.
• Number of accounts delinquent.
• Negative items: liens, bankruptcies,
repossessions, etc.
• Time since the negative item was
created.
• Amount of your credit being used
(utilization).
• New account under six months old
(which hurt your credit).
• Number of hard inquiries.
Typically, mortgage lenders will require
delinquent accounts be cured but this won't
improve your score.
Myth: You must pay any bill that comes to
your home from a collection agency.
Under the law you have the right to challenge
the legitimacy of any bill sent to you&emdash;it
is called validation. By sending a validation
letter to a collection agency they must, by law,
cease all collection activities until they can
validate the debt. It is important to note the
word is validation and not verification which
mean two entirely different things. Validation
means they must submit to you proof the bill is
yours, which is not a simply an invoice sent to
you. Until that is properly done, they can not
report the item to your credit report, ask you
for money or do anything which can be deemed
further collection activity. Do they anyway? Yes
they do. This is why it is important to know the
law, which is on your side.
It is vital that you check your credit report
often as most individuals have erroneous data in
them. Don't assume that everything will work as
it should because it almost never does. No one
will be looking out for your credit identity but
you. Credit standing has never been more
necessary than it is today. Just about
everything we do in life from applying for a job
to booking a hotel room has something to do with
our credit worthiness.
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