Fees and billing tactics-A desirable credit repair agency will charge reasonable fees for their services. Beware of any that are extremely cheap; while the most expensive credit repair service is not always the best, you will generally get what you pay for if you go with the cheapest service available. You can find really good services for less than $100 per month, but steer clear of anything under $40.

Per the Credit Repair Organizations Act (CROA), credit repair companies may not charge upfront fees for their services. They can only bill you after service has been performed. However, they can charge an initial set-up/consultation fee before they begin repairing your credit. Typically, credit repair companies will bill you for the set-up fee, then a month later they will begin charging a monthly fee for services rendered the previous month. There are also a few companies that will bill you only for each negative item that is deleted from your credit reports, rather than charging a monthly fee.

What tactics does the company use to repair your credit? There is a legal way to repair credit, and there is also an illegal way. The illegal way to do it is called file segregation, which is a felony. File segregation consists of using a fake or stolen social security number to establish credit. A stolen social security number in this case would usually belong to a deceased person, and a fake SSN would usually be an employer identification number (EIN), which has the same number of digits as a social security number. Needless to say, these tactics can get you into serious trouble, so avoid any services that employ these methods. The only legal method of credit repair is disputing negative items on your credit report–with the credit bureaus, with the data furnishers, or both–in an effort to get them removed. Before committing to a credit repair service, always find out exactly how they will be repairing your credit.

Does the company provide personalized credit repair? You may have to do a little searching to find services that offer this, but it’s VERY important. To elaborate on what I mean by “personalized”, I will describe the credit repair methods commonly used by some credit repair companies, typically the ones that charge very low monthly fees. These tactics are legal, but they are terribly ineffective.

As you may know, legal credit repair consists partly of sending written disputes of derogatory items on your credit report to the credit bureaus. Some credit repair companies will send identical dispute letters to the credit bureaus over and over for every single client they have. This is a problem because per the Fair Credit Reporting Act (FCRA), the credit bureaus can legally ignore any disputes that they deem “frivolous”. So guess what happens when the credit bureaus receive hundreds or thousands of the exact same dispute letter? That’s right, all those cookie-cutter letters get tossed into the “frivolous” pile without a second look. This is why it’s crucial that your credit repair company sends unique, personalized dispute letters on your behalf.

Further, there is more to credit repair than just sending dispute letters to the credit bureaus. In order to effectively repair credit, disputes will also usually need to be initiated with the data furnishers–creditors, collection agencies, and/or courthouses. You (or a credit repair agency) will rarely get very far by disputing solely with the credit bureaus. But some credit repair services don’t take it this essential step further, or if they do, they may charge you extra for it. This is unacceptable; as I said above, disputing with data furnishers is part and parcel of effective credit repair–it should never be optional and it should always be included in the price of the service.

A good credit repair service will not make unrealistic promises or guarantees. By law, credit repair companies cannot guarantee any specific results at all. (But yes, they can still offer a refund policy in case their service doesn’t work for you.) Also, they should be honest and realistic in telling you what to expect from their services. They shouldn’t claim to be able to repair your credit overnight; in reality, it should take at least several months for most people, and they should be truthful with you about that.

Check out prospective credit repair services with the Better Business Bureau. Avoid any agencies that have unfavorable ratings or excessive customer complaints.

Post from: Credit Repair and Debt Solutions

How To Choose a Credit Repair Service

Related posts:

1. Do-It-Yourself Credit Repair vs. Credit Repair Services
2. Credit Repair Myths
3. How To Repair Your Own Credit Report – Part 1

“Hard” vs. “Soft” Inquiries

There are two types of credit inquiries: “hard” and “soft”. Only hard inquiries hurt your credit score. Hard inquiries result from potential lenders pulling your credit report when you apply for credit with them. The following are all examples of soft inquiries: you pulling your own credit report; a potential employer checking your credit; and credit card companies inquiring on your report to see if you are eligible for promotional offers (if you want to prevent them from doing that, call 1-888-8-OPTOUT). Creditors that you have a current relationship with may also monitor your credit by pulling your report from time to time; this would also be a soft inquiry.

How Hard Inquiries Affect Your Credit Score

It has been estimated that each hard inquiry lowers your credit score by 5 points. Most inquiries will stay on your credit report for 1 to 2 years.

The exception is if you’re shopping around for a mortgage or auto loan. In that case, any hard inquiries for the same type of credit occurring within 14 days of each other will only count as one inquiry as far as your credit score is concerned. But remember, this only applies to home and auto loans, not to credit card or any other type of inquiries!

Unauthorized Inquiries

The Fair Credit Reporting Act (FCRA) requires that whoever pulls your credit report does so only with permissible purpose. So if you see any inquiries on your report that you don’t recall authorizing, you should dispute them.

The best way to dispute an inquiry is to send a letter to the creditor in question stating that you do not recall authorizing them to pull your credit report. Ask them to either provide you with proof that they had permissible purpose to inquire on your report, or delete the inquiry. Send the letter certified mail with return receipt requested, and keep copies for your records.

In the event that the creditor doesn’t respond to your dispute or fails to delete the inquiry without providing proof of permissible purpose, you will need to dispute the listing with the credit bureau and send them a copy of the letter you sent to the creditor.

If you have any questions about inquiries on your credit report, please feel free to comment.

Post from: Credit Repair and Debt Solutions

Inquiries On Your Credit Report

Related posts:

1. Medical Debts Listed on Your Credit Report
2. How To Repair Your Own Credit Report – Part 2
3. Understanding Your Credit Score

Any time you request validation from a collection agency/junk debt buyer and they respond with adequate validation, you’ll need to pay them, but you should always attempt to negotiate a pay for delete agreement with them first. This is because a fully paid collection on your credit report is not much better for your credit score than an unpaid collection–and sometimes it’s even worse, because your payment will update the account to reflect recent activity. A derogatory account with recent activity is worse in terms of credit scoring than one that has not had any activity for quite some time. A collection account will always be considered a negative item even once it’s fully paid; the fact that it was ever in collections status is what makes it derogatory!

And you can of course work out pay for delete agreements with original creditors as well.

You should always make pay for delete offers in writing, and keep in mind that you don’t have to offer to pay the full amount of the debt, especially if the debt is in the hands of a junk debt buyer (JDB). JDB’s purchase debts for literally pennies on the dollar, so they still make a huge profit even if you only pay a portion of the debt. You can also offer to pay in monthly installments rather than making a lump sum offer.

If the creditor/collector accepts your offer, make sure you have a signed agreement from them stating that they will delete the debt from your credit reports in exchange for payment. Keep a copy in case the creditor/collector fails to remove the account from your reports (in that case you’ll need to send a copy to the credit bureaus to get the item deleted).

And remember, NEVER pay a collection agency or junk debt buyer with any payment method other than a money order or cashier’s check!! They have proven time and again that they cannot be trusted with checking account or credit or debit card numbers!

I hope you found this article helpful! If you have any questions about pay for delete agreements, or other questions regarding removing collections from your credit reports, please feel free to leave a comment.

Post from: Credit Repair and Debt Solutions

Pay For Delete Agreements

Related posts:

1. Reader Question: “If I pay a delinquent account, how long will it appear on my credit report?”

This letter was originally created by the member Psychdoc of the CreditNet forums. The aim of the nutcase letter is to pester the creditor/collector into submission. You will be demanding that they either validate a debt that has already been paid, or delete it from your credit reports. As you can imagine, once the creditor/collector has been paid, there is nothing in this for them except wasted time and money. So they will often find it much easier just to delete the debt from your credit reports and wash their hands of you, rather than to waste their resources digging up the required documentation (which they very well may not have anyway).

The letter also implies that you are a sue-happy nutcase who may be planning to take legal action against the creditor/collector if they don’t cooperate with you. Again, it would make much more sense for them to just delete the offending item rather than risk being dragged into court over a paid debt.

So without further ado, here it is:

Date

Your Name Address City, STATE ZIP

Post from: Credit Repair and Debt Solutions

Sample Nutcase Letter

Related posts:

1. Debt Validation Sample Letter
2. Sample Statute of Limitations Dispute Letter
3. Medical Debts Listed on Your Credit Report

Here are some sample letters you might find useful:

debt validation sample letter-for listings placed on your report by third-party debt collectors
nutcase letter-for fully paid derogatory accounts
HIPAA dispute letter series-for fully paid medical collections
pay for delete agreements-for valid, outstanding derogatory debt listings

6. Get organized. Create a file to keep copies of all correspondence between you and the credit bureaus, creditors, collection agencies, etc. Keep all your certified mail return receipts paper-clipped to their corresponding documents. I don’t recommend you communicate over the phone during the course of your credit repair efforts, but if you must, at least keep documentation of all your telephone conversations in your file.

7. Wait for the results of your disputes and follow up as needed. Unfortunately, not every dispute will be successful the first time around. But persistence often pays off!

Whenever a disputed item comes back from a credit bureau as “verified”, you should write them and ask for the contact information of whoever verified the item. Once you receive it, write to the creditor/collector/courthouse and ask them how they verified the listing with the credit bureau. What documentation do they have that proves the accuracy of the disputed item? Frequently, they won’t be able to comply with your request and will be forced to delete the item from your credit reports.

Sometimes the credit bureaus will not be able to verify a disputed listing within the 30-day timeframe required by the FCRA, and they will temporarily delete the item from your report and reinsert the item once it is verified later. This is legal assuming the item was verified properly and provided the credit bureau notifies you in writing that the item is being reinserted.

Also keep in mind that you can dispute the same accounts again at a later time, as long as your disputes are not exactly the same as the ones you’ve submitted previously. Remember, there are many possible disputes; you can dispute an account in its entirety, or you can dispute one or more of the details of the account listing, such as the date of last activity, the credit limit, the high balance, etc. I recommend waiting at least 2 or 3 months in between disputes for the same account, otherwise the credit bureau may choose to treat your dispute as frivolous (meaning they will ignore it).

Just continue repeating this step until you’re satisfied with your credit reports.

I hope you found this series of articles on how to repair your own credit report helpful; if you have any questions please feel free to leave a comment!

Post from: Credit Repair and Debt Solutions

How To Repair Your Own Credit Report – Part 3

Related posts:

1. How To Repair Your Own Credit Report – Part 1
2. How To Remove Public Records From Your Credit Report
3. How to Dispute a Listing on Your Credit Report

Here are the items you’re looking for:

-late payments
-charge-offs
-collections
-bankruptcy
-judgments
-repossessions
-foreclosures
-tax liens
-inquiries that you don’t recognize as belonging on your report

4. Stop! It’s time to do some homework! I bet that’s not what many of you wanted to hear. I’m sure you’re anxious to dive right in and start attacking the negative items on your credit reports, and I don’t blame you a bit. But the task you’re about to undertake is not cut-and-dry; credit repair is complex and there is often not a one-size-fits-all solution for every individual and every credit report. The approaches you’ll take to challenge the derogatory listings on your reports may vary depending upon your specific circumstances. You need to know what you’re doing beforehand to keep from making mistakes during the credit repair process. You also need to understand the laws that you’re going to use to your advantage in order to clean up your credit. Remember, if you don’t feel you have the time or patience to tackle this yourself, you can always seek the assistance of a credit repair organization (YES, there are good ones out there!).

Here is your pre-credit repair reading homework. It will help you understand the credit laws, and also to understand which approaches are appropriate for which types of listings:

Fair Credit Reporting Act (FCRA)
Fair Debt Collection Practices Act (FDCPA)
debt validation (Pay special attention to the second-to-last paragraph!)
how to dispute a listing on your credit report
HIPAA and credit repair (You can skip this one if you don’t have any medical items listed on your reports)
disputing a judgment, tax lien, or bankruptcy (Again, skip if it doesn’t apply to you)
disputing unauthorized/questionable inquiries

Next==> How To Repair Your Own Credit Report – Part 3

Post from: Credit Repair and Debt Solutions

How To Repair Your Own Credit Report – Part 2

Related posts:

1. Inquiries On Your Credit Report
2. How To Repair Your Own Credit Report – Part 1
3. How To Repair Your Own Credit Report – Part 3

If you want to remove a bankruptcy from your credit report, the first thing you should do is dispute any listings on your report that say “included in bankruptcy”. Then dispute the bankruptcy itself. The goal is to remove all traces of the bankruptcy from your credit report if possible. Instructions for disputing items on your credit report are outlined here.

Now let’s go back to what I said in the first paragraph–that a public record doesn’t have to be any more difficult to get deleted from your credit reports than other types of derogatory listings. You might be skeptical of that statement since public records listed on credit reports are generally very serious items that are absolutely devastating to your credit score. It seems like they should be harder to get rid of than less damaging listings, right? Not necessarily so, and here’s why:

Remember how the Fair Credit Reporting Act (FCRA) requires the credit bureaus to investigate your disputes, and delete any items that cannot be verified? Well, the credit bureaus usually don’t investigate disputes properly anyway, but in the case of disputed public records, it’s almost impossible for them to obtain proper verification of these items, even if they wanted to. This is because a public record must be verified through the courts, and the courts will only verify this information in person; they do not verify over the phone or through the mail. Now you know as well as I do that when a consumer disputes a public record listing, it’s highly unlikely that the credit bureaus send someone to the courthouse to verify that listing in person!

However, there is a good chance that your dispute will come back “verified” anyway. This is an FCRA violation on the part of the credit bureau if they did not investigate properly. If/when the public record is “verified” by the credit bureau, your next step will be to send them a letter requesting their method of verification. As with all correspondence you send to the credit bureaus, send the letter certified mail and keep a copy for your records.

The credit bureau will likely claim that the courts verified the listing, but you will know better than that! At that point, you’ll need to contact the courts and ask them how they verified the item. When they tell you they didn’t provide verification to the credit bureau, ask them to make that statement in writing. Mail a copy of that statement to the credit bureau, along with a letter pointing out to them that they have violated the FCRA by failing to properly investigate your dispute. That should be enough to prompt them to remove the public record from your credit report, but if it doesn’t, you should complain to the Federal Trade Commission (FTC) and contact a lawyer.

Post from: Credit Repair and Debt Solutions

How To Remove Public Records From Your Credit Report

Related posts:

1. How to Dispute a Listing on Your Credit Report
2. How To Repair Your Own Credit Report – Part 3
3. Inquiries On Your Credit Report

Chances are, you’ve heard of the HIPAA (Health Insurance Portability and Accountability Act) Privacy Rule. You are probably aware that its purpose is to protect the privacy of your medical information/records. But what you may not know, is that the HIPAA law also applies to the reporting of medical debts on your credit reports.

Per HIPAA, medical providers may only disclose your medical information if they have a permissible purpose for doing so. Medical providers do not violate HIPAA if they assign a valid, unpaid medical debt to a collection agency and/or report that debt to the credit bureaus. Disclosing your information as needed to obtain payment for services rendered is considered a permissible purpose under HIPAA. But once the debt has been paid, there is no longer permissible purpose to disclose your medical information by reporting the debt on your credit reports, therefore all listings of the debt must be deleted upon payment.

So as you can see, HIPAA can provide you with powerful leverage when it comes to credit repair. But please be aware that HIPAA can’t help with every medical debt! It is only useful in credit repair when it comes to:

-debts that have already been paid
-debts that you don’t rightfully owe
-unpaid, valid debts that you are able to pay**

**If you haven’t yet paid the medical debt but are able to do so, you should negotiate a pay-for-delete with the medical provider. Be sure the agreement is made in writing and that you have a copy of it before you make payment. Setting up a pay for delete arrangement beforehand is easier than lodging a HIPAA dispute later to get the paid medical debt removed from your credit reports.

The great thing here is that when you attempt to negotiate a pay for delete with a creditor or collector for a non-medical debt, they may or may not be willing to delete the debt from your reports in exchange for payment. But once you pay a delinquent debt to the medical provider, not to the collection agency(!), they have no choice but to delete all listings of that debt from your credit reports, including any listings that have been reported by collection agencies to which the debt was assigned.

PLEASE NOTE: You must NOT make payment for a medical debt to a collection agency! Doing so would waive your HIPAA rights, at least as far as that particular debt is concerned. You must pay the original healthcare provider only in order to preserve your right to have the debt deleted from your credit reports upon payment! However, if you have already paid a collection agency, you’re not out of ammo–you can try sending them a nutcase letter.

You can find specific instructions and sample letters here to help you attack medical debts on your credit report.

Post from: Credit Repair and Debt Solutions

Medical Debts Listed on Your Credit Report

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1. Inquiries On Your Credit Report
2. How To Repair Your Own Credit Report – Part 3
3. How To Repair Your Own Credit Report – Part 2

Before we begin, I need to remind you that I am not a lawyer, and what you are about to read is not, and should not be substituted for, legal advice. Also, do not make false statements at any point in the credit repair process (i.e., don’t dispute an account as ‘not mine’ when in fact you know it is yours). OK, so without further ado…

1. Get copies of all 3 of your credit reports (Equifax, Experian, and Transunion), along with your credit scores. Make a copy of each credit report and keep a copy of the clean originals for your records (you’re going to be writing on the copies).

You are probably aware that you’re entitled to one free credit report each year, but I recommend that you do not get the free report if you’re planning to use it for credit repair purposes. Here’s why: Under normal circumstances, once a credit bureau receives notification that you are disputing an item on your credit report, they have 30 days to investigate your dispute. If they fail to complete the investigation within 30 days, they are required by law to remove the disputed item from your report, regardless of its accuracy (although if it’s proven to be accurate later it might be re-inserted onto your report, which we’ll discuss later). However, if you file a dispute after receiving the free credit report, the credit bureau’s deadline to conclude their investigation is extended from 30 days to 45. Fifteen days may not sound like much, but the fact of the matter is that 15 days could mean the difference between getting your disputed item deleted, or not.

As for your credit scores, the credit bureaus are not required to give those to you for free (no, not even once a year). I suggest subscribing to an online service that allows you to monitor your scores for a monthly fee. This will help you to gauge how successful your efforts are as you go through the credit repair process.

2. Dispute the “low-hanging fruit”. Check your reports for inaccurate or outdated personal information. This is the first information you should dispute–you’re looking for misspellings and variations of your name, addresses where you never lived, wrong social security numbers, etc. Also be sure to dispute your former addresses. You can use any means of dispute you want for this (online, phone, mail, etc.). The reason I suggest that you do this first, is because it’s not unheard of for an old derogatory item associated with a former address, to “fall off” your report after the address is disputed and removed! Plus, removing old addresses from your report can help protect you from identity theft.

This is also a good time to dispute any debts listed on your report that are older than 7 years old because these should be very easy to get deleted. (Please note that the 7 year reporting period does not apply to bankruptcies or tax liens; those can stay on your report for up to 10 and 15 years, respectively.)

At this point you should also dispute any duplicate items on your reports.

Next==> How To Repair Your Own Credit Report – Part 2

Post from: Credit Repair and Debt Solutions

How To Repair Your Own Credit Report – Part 1

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1. How To Repair Your Own Credit Report – Part 3
2. How To Repair Your Own Credit Report – Part 2
3. How to Dispute a Listing on Your Credit Report

Always dispute with the credit bureau first!

If you need to dispute a listing on your credit report, you should start by disputing with the credit bureaus first, rather than by first contacting the data furnisher (DF). (The data furnisher would be the creditor or third-party debt collector that placed the debt on your report.) Here is the reasoning behind this advice: You can dispute directly with the DF first, and they will still be legally obligated to comply with your request. But per the Fair Credit Reporting Act (FCRA), if you do not dispute with the credit bureaus first, you give up your right to sue the data furnisher if they fail to properly investigate your dispute! (Although at that point, you could still report the violation to the Federal Trade Commission and your state Attorney General, and they could then sue the DF.)

How should you go about filing a dispute with a credit bureau?

You have to be a little careful with this, and I’ll explain why: On the one hand, the FCRA protects you from having incorrect or unverifiable items listed on your credit reports. It requires the credit bureaus to investigate any information you dispute in a timely manner, and to delete or correct any information that can’t be proven to be accurate. Sounds great so far, right? Not so fast…

The credit bureaus actually have rights under the FCRA too. They have the right to ignore/refuse to investigate your dispute if they deem the dispute to be “frivolous”. Here are examples of what a credit bureau might consider to be a frivolous dispute:

-a dispute that is not specific enough
-a dispute that is written using a “form letter”–The credit bureaus reject these because they assume they come from credit repair companies (and no, it’s not illegal to use a credit repair company–the credit bureaus just don’t want you to). This is why I recommend that you never copy a sample dispute letter exactly; you should always use your own words!
-a dispute that is exactly same as one you have submitted previously
-a dispute that challenges too many items on your report at once–The credit bureau will assume you are disputing all the negative items on your report regardless of their accuracy.

Needless to say, you don’t want your disputes to be deemed frivolous, but at the same time you need to cover yourself when dealing with credit bureaus and data furnishers. So, I recommend the following approach:

Always dispute in writing, and mail the letter certified mail. I don’t recommend sending it with return receipt requested; I think the credit bureaus tend to associate that with the work of credit repair companies. You do need to know when they have received your letter, but you can track certified mail via the USPS website to see when it’s been delivered.

I know of some credit repair experts who recommend writing your dispute letter in strange colors of ink on colored lined paper. They suggest this because the credit bureaus scan dispute letters to be read by a computer that picks out the “form letters” so they can be treated as frivolous. Apparently the weird colors can’t be scanned, and the credit bureau employees will be forced to actually read your dispute in order to decide whether to ignore it or not. You can certainly do this, but I’m not sure that you really need to, as long as you use your own words in your dispute.

As for the wording of your dispute, I think it’s important that you don’t come across as too credit-savvy. The best tone to take is that of a genuinely concerned/upset consumer who might have some knowledge of his/her rights, but not too much. Remember, you don’t want to sound like someone who does this all the time (i.e., a credit repair company).

You can dispute an account in its entirety, or you can dispute the details of the account, such as the date of last activity, the high balance, late payments, etc. It’s important that you do not lie in your disputes; don’t dispute an account as “not mine” if you know that it’s yours.

What happens after you dispute with the credit bureau?

You will need to wait for the results of your dispute. Once the credit bureau receives notice of your dispute, they have 30 days to complete their investigation. They are supposed to contact the data furnisher to verify the accuracy of the listing. Hopefully, this investigation will result in the disputed listing being corrected or deleted entirely from your credit reports. But if it doesn’t, don’t panic!

What to do if the investigation results in the disputed item being “verified”

If a data furnisher verifies with the credit bureau that the listing is correct, you can and should contact the DF and ask them exactly what type of documentation they have that proves the accuracy of the derogatory item. Don’t be surprised if they have absolutely no documentation whatsoever. If that turns out to be the case, you will need to notify them in writing that they are in violation of the Fair Credit Reporting Act by listing unverifiable information on your credit reports. Advise them in writing that you will sue them if the offending items are not corrected or deleted, and that you will also notify the FTC and your state Attorney General. Send the letter via certified mail with return receipt requested.

Post from: Credit Repair and Debt Solutions

How to Dispute a Listing on Your Credit Report

Related posts:

1. How To Repair Your Own Credit Report – Part 3
2. How To Remove Public Records From Your Credit Report
3. Inquiries On Your Credit Report