Taking Help Of Professionals To Handle Credit Report Issues

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You shouldn’t be surprised to learn professionals like attorneys, accountants and tax professionals have stepped into the field of addressing the credit report issues for consumers as well. For some companies this has become big business. In fact several firms and professionals specialize in dealing with your credit reports and credit files. If you have done all you can to correct the information on your credit file but have not managed to get the results to your satisfaction, it may be the time to seek the assistance of one such expert.

It is also true that alternatives to licensed professionals have become popular a lot in recent years. You will find several so-called do-it-yourself kits and legal document services. However, relying self-help kit that consists of an e-book of a few pages or a flyby at night service to repair your credit is not a way to handle your credit file. Remember that your credit file is an extremely important instrument concerning your financial health. Your credit score is something that will continue to impact your financial prospects in the future as well. You should not take resort to the trying to take advantage of nefarious or dubious tactics or services that promise to increase your credit score. You are much better off doing things in a proper and responsible manner by investing your time and money in educating yourself and or seeking the help of an attorney, accountant or tax professional.

If all your efforts to correct the information on your credit report do not get you the result you want, you may even consider filing a lawsuit if you feel that your credit report rights have been violated. The first thing to do will be to find a lawyer who has experience in the area of lawsuits regarding consumer rights.

When it comes to finding consumer attorneys, they are basically of two kinds, and litigators and non-litigators. The litigator is an attorney who fights the court case for you in the courtroom and has experience in pursuing such cases in the court. A non-litigator is also known as a transactional attorney and is not usually in the courtroom very often. This is because the lawyer either prefers to settle the matters before they get to court or he just doesn’t have enough experience handling is such trials. Either kind of attorney can start writing letters on your behalf. Even this can be awful lot of assistance because having requests sent from a legal representative will be met by response from the legal department of the credit reporting agency which in turn can get you some results. However, if you still don’t get the results you want, you may have to take as the credit reporting agency to court. This is where you will need to carefully consider the attorney’s credentials and experience.

Your probability of winning is based on factual evidence and documentation.

Tips to know before hiring an attorney to address your credit issues

When you walk in to the attorneys office, pay attention to how the office is run. Is the staff friendly, helpful and professional? Or are they running about frantically, letting the phone ring off the hook or complaining under the breath?

During your initial consultation of the attorney questions and see if he or she addresses all the concerns and is realistic about the outcome of the case. Keep in mind that there will be pros and cons to bringing a lawsuit and there is even a possibility you could loose and be responsible for the other sides costs spent to defend your suit.

Read through the attorneys retained agreement carefully. Take it home if you need more time to study it. If the attorney is not willing to provide you with a copy of the written agreement ahead of time then you are better off finding another attorney.

What Is A Credit Report Consumer Statement

Hundred word consumer statement

The fair credit reporting act allows you to add a consumer statement on your credit report against items that you do not agree with. These are usually items that you disputed but were not resolved according to your satisfaction. This provision is found in section 611 of the Fair Credit Reporting Act.

The value of this consumer statement is that it lets the future creditors know that you do not agree with a certain negative information on your credit file when they’re reviewing it for the sake of your credit application. At this point you can provide them with additional details and satisfy their query by providing documents to support your own claim. However, the consumer statement has no effect on a credit rating. Nonetheless, many consumers are encouraged by the credit reporting agencies to add a consumer statement specially when they see that you tried going to have something updated on your credit vote.

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In essence, the hundred word consumer statement is the a kind of a compromise and meant to appease you.

The only benefit is that it gives future creditors for warning that some negative items on your credit history is not accurate according to.

However, there are certain accounts and certain kind of entries against which listing 100 word dispute consumer statement is helpful.

  • Medical bills that are showing a collection account because insurance has not covered them yet.
  • A bankruptcy that was dismissed but your debts were not discharged.
  • Save your account changes resulting from identity theft, that, major medical problems or divorce.

A hundred word consumer statement is particularly effective next to a medical debt. Many times a medical visit to a procedure that should have been covered by insurance is not paid because of some delay in the process. It can be a small error such as the use of another family member’s name or a Social Security number typo. So if the insurance does not correct the mistake and pay the bill soon, the hospital or the doctor may send the overdue bill to the collection agency within just a few weeks. This may result in the collection account being listed on your credit file. The good news is that when the insurance company pays the bill, the law requires the collector to remove the account from your credit report immediately.

Three reasons why submitting a 100 word consumer statement is ineffective

  1. The consumer statement does not affect your credit score or your credit worthiness.
  2. Many creditors actually ignore the hundred word statement on your credit file.
  3. You will have to explain to a potential creditor the entry on your credit file anyway. The hundred word statement is only of value if you have physical documented proof of why your side of the story regarding the dispute is correct.

What To Do When Your Dispute Letter Does Not Work

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Sending a second dispute letter when the first one does not get results

Usually within 45 days of having sent your first dispute letter, you will get the result of the investigation by the credit reporting agency. They will communicate with you by sending you a letter and an updated copy of your credit report if your dispute letter has resulted in any change on the information being reported on the credit for. You’ll be pleased to learn that in many cases, many of the issues with the credit report can be dealt with sending the dispute letter. However, sometimes it is possible that your dispute letter does not get you the desired result.

Some information might be updated on your credit report but then again some might be reported as having been allegedly verified and accurate. The information that is verified as accurate while continued to be reported on your credit report with no change.

So the question now arises what do you do now.

Sending a second dispute letter

If the credit reporting agencies do not correct all the items that you ask them to in your initially updated records, don’t get discouraged but write to them again. This time directly letter to their attorney.

If you cannot find the names of the attorneys who work for the credit reporting agencies, you just have to send a letter to the attention of the legal department. You can ask that your letter be given to their attorney but it’s mostly the legal assistants who read them. Your main contention of inquiry will be why they removed certain records where as did not do the same for others. You can once more provide them with a list of the remaining inaccurate items on your credit report. You may actually receive a letter back from representative who works in the legal department but it won’t be from the one of the attorneys. Credit reporting agencies usually reserved those letters for responding to another attorney or the federal authority.

In the second letter you have the right to ask the credit reporting agencies legal department to send you additional information. Three things to request when a disputed item is not corrected

  • A copy of the completed verification form used.
  • The contact information for the creditor’s representative who responded to the verification request from the credit bureau including the names, title and phone number.
  • A copy of the documents used as proof of validation of the debt of the item on your credit report.

Basically, don’t give up after had getting negative response from the CRA the first time. Many people do not pursue the matter with the credit reporting agency again for the fear that they will be retaliated against and the information they already corrected will be reinstated. You should not worry of that count, it won’t be re-implanted for that reason alone.

Often a second strong letter does get results that did not come by in your first dispute letter. However, if the CRAs continue to ignore your request or refuse to correct or delete the information according to your directions they may try to appease you up by using a second letter as a consumer statement. What this means is that they will include an entry alongside the disputed item mentioning “account information disputed by consumer [meets requirement of the faith credit reporting act]”. While this will inform any future creditors that the information has been disputed by you and is not accurate according to you, it will have absolutely no effect on your credit score.

At this point sending a third letter to the CRA will not do you much good. The credit reporting agency is likely to respond by sending you a letter explaining that they will no longer be investigating the matter on your behalf because they consider your request to be now “frivolous” and “irrelevant” and under the law of FCRA that you are now wasting their time. One of the things you can do at this point of time is to involve the Federal Trade Commission and complain to them. This is a time-consuming process and may take several months. Another recourse is to hire an attorney to deal directly with the legal department of the credit reporting agency.

If you need assistance and cannot afford to hire an attorney to settle the matter of credit report dispute, you can call the Federal Trade Commission toll-free call 187-FTC-HELP, 187-732-4357. You can also visit the FTC online at www.ftc.gov. You can even communicate them through postal mail by sending a letter to the following address:

Federal Trade Commission 600 Pennsylvania Ave., Northwest Washington DC 20580.

Understanding Results of A Credit Report Dispute

Possible outcomes of a credit report dispute

When you get your updated credit report from the credit reporting agency in response to the dispute that you filed, on the first or second page, there should be a paragraph that tells you about the information that was reinvestigated. This section will list accounts and the result of that investigation. There are basically three possible outcomes and three ways in which a credit reporting agency shall respond to dispute. These are as follows:

Deleted

This means that the disputed accounts were deleted and are removed from your credit report as if they never existed.

Verified — No change

This status means that the accounts were allegedly verified by the creditor and will not be changed in any way. They will be continued to be reported on your credit file as they were before. This outcome will probably be reflected by the words “verified, no change”.

Updated

When the result of the dispute investigation results in an updated status, things can get a little confusing. Updated could mean one of several things:

  • Late or past due indications were actually removed.
  • The source creditor reviewed the account and made an adjustment that would be so small or innocuous that you can’t see any change on your credit report.
  • The source editor returned the verification form along with the submission on your file which is similar to what they do once every few months anyway, to update your account.

Unless you actually see any negative information removed, such as late payments now showing as current, it can be maddening to try to figure out how one account was updated because you might not be able to tell. If it was not changed according to the specification, it might be time to send the credit bureau a follow-up letter. In the next few posts we will discuss communicating the the credit reporting agencies when the first dispute request does not have the desired result.

How To Send A Dispute Letter To A Credit Bureau

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When you send your credit dispute letter to the dispute address given to you on the form provided, or you dispute online, you might consider following the same process with the other credit bureaus as well. However, in most circumstances, you cannot file a dispute till you order your personal credit report from the credit reporting agency. Just because an error is present on one credit file does not mean that it will be present on another credit reporting agency’s report as well. Some people suggest that even if you have not acquired all three of your credit reports you should still send the dispute letter to all three credit reporting agencies. This may work for you and if the credit reporting agency cannot locate such an account it will send you back later stating that its records simply do not include that particular item.

However, it is highly recommended that if you find errors on credit report of one credit reporting agency then you should physically order your credit reports from other credit reporting agencies and check them for the same mistake. In fact, since the information of the three credit files differs from each other, you may discover other mistakes that were not present on your previous credit file. Sending a dispute letter based on a mistake that you found on some other credit file will many times not achieve the desired result. Almost all times the credit reporting agencies require you to provide the number of the credit report that you have recently accessed from their agency within the past six months before they can process a dispute for you. This will require you to get a credit report from them before you can dispute any errors or inaccurate information.

Many experts also recommend that you always sent a correspondence using only certified mail, return receipt requested. This is good advice. Although it is uncommon for a credit reporting agency to claim that it never received a letter when in fact it did. However, if you do need to send the same letter again then by all means send it certified. For more critical communication with the credit bureaus such as informing them of identity theft, you might want to send all correspondence with certified mail. Addresses for sending dispute letter to 3 national credit bureaus. These addresses were current during the writing of the post. However, you will also get these addresses with your copy of the credit report.

You can also call up the credit reporting agency on the phone and verify if your dispute was received. Once again, just like when you are filling the dispute form, do not provide the representative with any information you don’t want him or her to know or report about you. You are simply calling to check whether your dispute letter has been received. The following is a list of phone numbers you can call to check on the status of your dispute letter.

Equifax: 800-685-1111

Experience: 888-397-3742

TransUnion: 800-916-8800

Once a credit reporting agency as received the dispute it will usually send you an interim response saying that it has received your letter and it will send you an updated credit report as soon as its investigation process is complete. The maximum period allotted for the credit reporting agency to get back to you is usually 30 to 45 days. Depending upon the number of disputed items your files and how fast the source creditors respond to the query by the credit reporting agencies, you may get a response sooner than the 30 to 45 days. If you don’t receive a corrected credit report or any correspondence from the CRA within this duration you can assume that something went wrong and your dispute was not acknowledged or investigated properly. In this case you can the resend the dispute letter.

How to Write Your Own Dispute Letter to Credit Reporting Agencies

If you do not want to go in with the form provided by the credit reporting agencies either through mail or online, you are free to write your own dispute letter. The first thing to remember is that you should keep it simple. In fact you can take the example of the form provided to you by the credit reporting agency to draft your own letter. They do not ask you for a lot of details regarding your account but just need you to mention what the problem is such as, “account does not belong to me”, “date of activity more than seven years ago”, “never late/always paid on time” etc. Do not get into the details of how and when you paid your accounts and your problems with the creditor etc. Keep your problem to the point and short.

You should include each dispute in one correspondence as much as possible. Even if you have a lot of mistakes to address you can arrange your letter in a way that all your problems are listed in a clearly defined manner. Don’t worry if they go on to multiple pages. That is okay.

For example, you can list each account in the left column and indicate in the right column of the problem is a few words. These few words should be the description of the problem in a brief form as mentioned above. You can also decide to describe the dispute first and then placed the accounts that apply for example “the following accounts do not belong to me”.

Once again, it is imperative to keep your dispute letter simple and straightforward. Do not get emotional or angry or tried to make it personal.

In case you forget to include any dispute in your first letter, then you should wait at least 40 days to send the second letter. If the credit bureaus receive more than one dispute from you or a letter within a few days of a dispute, before their first verification process is complete, then they actually have a legal reason to postpone the investigation of financial dispute. They will mostly let you know in a letter back your explaining that your first investigation has been postponed because you added additional information. So wait for 40 days because by then you should receive the result of your first dispute.

Sample dispute letters

Here are some of the common kind of dispute letters that you can use to address the most common errors and mistakes on your credit file. These four types of dispute letters include:

Disputed an account that is not yours or has never been paid late.

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Disputed account that is past seven years date of last activity limit.

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Dispute being listed as authorized user on someone else’s account.

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Dispute an inquiry that was not authorized or occurred more than two years ago.

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How To Choose Priority To Items to Dispute In a Credit Report

When finding mistakes on your credit report and finding several that you need to correct, use your common sense to decide which ones you should handle first. There may be plenty of inaccuracies on your credit report that do not impact your credit rating.

For example, a small variation in your address such as being listed as “Apartment number 01” instead of “unit one” is not going to have any impact on your credit rating. Also, multiple spellings of your first name will not directly impact your credit score and can be dealt with later. In the meantime you might want to deal with more pressing issues such as having a collections account removed from a credit file that does not belong to you, or have an account updated that is showing being late in the past when you always made timely payments and so on and so forth.

Some people think that the portions of your credit report that do not affect your credit score are not scrutinized as carefully by the representatives of the the credit reporting agencies. This could be because their liability for this information is not so great as other kinds of mistake that directly affect your credit worthiness. So if you feel that you can ignore something, while addressing more important issues on your credit report, go ahead. You can always try and correct that information when more pressing issues have been dealt with. It may also be a good idea not to overwhelm the credit reporting agencies with collection of frivolous information when more important information needs to be dealt with.

However, there are sections even in your personal information that needs to be precise and correct. Information such as your Social Security number and date of birth should be correct on your credit file. If they are not, you should definitely file a dispute to have them corrected. Other’s Social Security numbers associated with your identity can seem like you have a backup SSN for fraudulent purposes or it could be the pointer to identity theft. Therefore you need to instruct the credit reporting agencies to delete the incorrect ones.

Incorrect date of birth may not seem like a big problem but it can create complications when getting a job or applying for a loan. Several times, the interest rate on loans and insurance coverage depends on your age. This is one of the vital information that they filed away in the application process. If your credit file has a different date of birth than what you say, they will require additional documentation to verify your age which would delay the process. Also, employment records want to have an accurate record of your date of birth. Your employer may also require further verification before he can confirm your employment.

What Is A Credit Report Dispute Letter

When writing a dispute letter to the credit bureau, you need to know about the following:

  • Verification forms used by the credit reporting agencies,
  • Filling dispute forms
  • Choosing your battles
  • Writing your own dispute letter
  • Sample dispute letters
  • Sending a dispute letter
  • Credit reporting agency’s response to dispute.

Getting negative items and information removed from a credit report is the most important step in improving your credit score for a short-term basis. By short-term basis we mean that in order to continued to have healthy credit score you need to change your credit management habits. You will need to ensure that you use credit wisely and do all the things that are required to represent a good credit risk to creditors.

As it has been mentioned before, the credit reporting agencies are not obliged in any way to inform you when negative information is being reported about you on your credit file. They are required by the law to use reasonable measures to ensure accuracy but the law does not provide any definition for these measures should be. Not much quality check is implemented by the credit reporting agencies because it would be an amazing increase of workload for them which could even put them out of business.

In order to make it fair for consumers as well, the fair credit reporting act allows the consumer to dispute whatever information on the credit file he does not agree with. If the information is incorrect, incomplete or wrong, he can request the credit bureau to either updated or remove it by sending a request which is known as filing a dispute.

Receiving and investigating disputes keeps the credit report agencies very busy. They have tried to make this process quicker and streamlined by designing and providing both their own dispute form for consumers as well as their own verification form for the source creditor.

Both these forms are simple to complete and easy to return. The credit reporting agencies have only about 30 – 45 days to respond to your dispute and give your results one way or the other by telling you if the item is either corrected, it was verified or that it has been deleted. The creditors are required to get back to the CRAs with the verification of the account within a week to 10 days so that the credit reporting agency can deliver you the result of their re-investigation to the consumer within the scheduled stipulated time. However, it is known to happen that creditors sometimes fail to return this form within the time allotted or do not return them at all. Consequently, several disputes can result in the deletion or correction of the information on your credit report for this reason alone. It is important to understand that if an account gets deleted from your credit report, the creditor can no longer report that account in the future and have it be included in your credit file.

Does All Of Your Credit Report Belong to You?

Although this might seem like a very obvious thing, but before you write a dispute to the credit report in order to have the negative accounts about you removed from your credit report, make sure that the entire credit report belongs to you. One of the telltale signs of this is when you find a lot of negative items or even positive accounts that do not belong to you and that you don’t recognize.

If you find a pattern of odd accounts or personal information that does not belong to you or anyone related to such as a spouse, you might be looking at “foreign accounts” or “foreign information.” The CRAs refer to this phenomenon as merging or overlapping. In other words what this means is that the information on your credit report has merged with information from another persons information. If this ever happens, it is of absolute importance that you get the correct information separated from it by. Even if the foreign account being reported is current and even if the other person’s accounts are in a better condition than yours, you never know what shape the persons future finances will be in. You don’t want the risk of someone else’s credit history affecting yours.

If you suspect that your credit file has got merged with somebody else’s, disputing each of count individually may be futile. The best tactic is to write to the credit report agency and explain the erroneous merging of your report with another. You may have to show the credit reporting agency step by step what the problem is. In order to do this, make a copy of your credit report, and highlight and circle all of the information that is not yours and included with your dispute letter.

Credit reporting agencies are required by law to use reasonable procedures to assure the the greatest possible accuracy of information on the report. But mostly, the information that is reported by creditors is not put through any stringent check or collaborated with any evidence of accuracy. Any verification that is done for the creditor is usually done at the time that’s the creditor subscribes to the credit bureau. Even then, at the end of the day it is their responsibility to verify the information and updated. So if you’re not sure about the accuracy of any account or item on your credit report, it is your right under the law to ask the credit reporting agency to investigate it and verify it for you.

Removal Of Outdated Information and Accounts, FCRA Sec 605

FCRA, Section 605 – Deletion of Outdated Information from the Credit File

Section 605 of the FCRA is titled “the requirements relating to information contained in consumer report” and basically covers the items in accounts that are outdated and must be removed from a credit file. The FCRA is specific about the length of time that a negative account or any other for that matter must stay on the credit report.

Adverse information cannot stay on the credit report for more than seven years from the last date of activity on the account. However, there are exceptions to the FCRA rule.

  • Credit inquiries of any kind cannot report cannot remain on your report for more than two years.
  • Bankruptcy dispositions can stay on for as long as 10 years.
  • Unpaid tax liens can stay on your credit indefinitely.

The information that needs to be removed from your credit report, seven years after the last date of activity, includes trade items, revolving accounts, installment accounts, mortgage loans and other regular credit entries. For example, if you were late on your credit card payment 8 years ago and have been current since then, that entry should have been dropped from a credit report one year ago and there should be no records of it. Hence, having outdated negative information removed from your credit report is one of the step in repairing your credit.

In the case of a collection agency, the seven years start running from the earlier date of when the collection agency received account or 180 days since you stopped making your payments to the original creditor. In case of a debt that was charged off it is the month the creditor reported the account as profit and loss on the books.

What you need to check for is whether these date match what is being reported on your credit file.

It’s possible that a collection agency started making efforts to recover the money from you many months before deciding to let the credit reporting agency know about the collection account. It still happens that in spite of the latest in data tracking and huge databases, information whose statue of limitation is over continue to linger on your credit report years after their expiration date. In order to dispute and fight for removal of outdated information from a credit report you need to understand when the time starts for the statue of limitation period. The statue of limitations begins with the date of last activity on an account and is also referred to as DLA on most reports.

But remember, your score is affected most by your payment history over the last 24 to 36 months. So you should focus on the more recent account first and you do not want to remove accounts that have been in good standing just because they are more than seven years old. An account that has never had a negative mark against it can stay on your credit report for the period of 10 years instead of 7.

Items you should dispute if they are outdated:

  • Accounts that were charged off.
  • Accounts that were placed for collection.
  • Bankruptcy.
  • Vacancies that have been paid.
  • Judgments that have been paid.
  • Overdue child support that has been paid.

Although calculating the date of last activity, DLA, and understanding time limits can be confusing, you should understand that removing outdated items from your credit report of the easiest and quickest way to improve credit ratings. This is because the CRAs have unilateral power to remove items it considers outdated.

It is advisable to keep your letters in communication with the credit reporting agencies short and to the point. Do not write lengthy letter to dispute an account where you go on debating the date and other technicalities. And remember, once again that an account that was charged off cannot be brought current. The only exception here is a student loan.

The best tactic is to instruct the credit reporting agency that last activity was more than seven years ago. From then on it’s the credit reporting agency’s job to investigate it. If you have any documents to prove your case, send it along with your dispute letter.