“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

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2. How To Repair Your Own Credit Report – Part 2
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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

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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

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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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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

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I am also including in this letter a request that the debt collector stop contacting you by phone. Don’t leave that part out! It will stop any harassing or annoying phone calls you may be receiving. And even if you’re not especially concerned about phone calls, you should still always make it your strict personal policy to avoid speaking to collection agencies/JDB’s over the phone. In order to best protect your rights, all communications should be made strictly in writing!

Note: Debt validation is your right per the Fair Debt Collection Practices Act (FDCPA), which applies only to third-party debt collectors–so please don’t send this letter to an original creditor, as they are not required to validate debts.

Date

Sincerely,
Your Name [note: Do NOT sign anything you send to a third-party debt collector! You might find that your signature magically appears later on documents you've never even seen, let alone signed! This is one of the many underhanded tactics employed by third-party collectors.]

Post from: Credit Repair and Debt Solutions

Debt Validation Sample Letter

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Under what circumstances should you request debt validation?

You may have already guessed that a debt validation request is in order when a collection agency or junk debt buyer attempts to collect a debt from you and you are unsure of the legitimacy of the debt. While that’s true, you can and should request debt validation any time a collection agency or junk debt buyer contacts you for payment for a debt and/or lists a debt on your credit report.**

Here’s why: Even if you suspect that you did owe the debt in question to an original creditor, you cannot possibly know for certain that a particular debt collector is legally entitled to collect it from you. They need to show you proof of that before you even consider making payment! Until they do, how do you know they really are who they say they are? Any old scam artist could sit down and start dialing random phone numbers, pretending to work for a collection agency and demanding payment!

When should you request debt validation?

The best time to request it is within 30 days of the collector’s first contact to you. Once they receive notice of your request for validation, they are required per the FDCPA to stop all collection activity until they have validated the debt. However, if you do not request validation within 30 days, this will not apply.

What if you miss this 30-day window?

Don’t despair; all is not lost! First, be aware that even though the debt collector legally has the right to assume the debt is valid if you don’t request validation within 30 days, the courts (if it ever goes that far) will never consider your failure to make the request to be an admission that you owe the debt!

Secondly, if the collector has placed the debt on your credit reports, it’s never too late to dispute that listing with the credit bureaus and the collector. Per the Fair Credit Reporting Act (FCRA), if you dispute the listing and the collection agency or JDB can’t prove that what they are reporting is accurate, they must either delete or correct the listing. This is always the case, regardless of when you dispute.

And thirdly, it’s not too late to stop collectors’ harassing phone calls even if you miss the 30-day validation window. Per the FDCPA, you may notify a collector in writing at any time that they must cease and desist contact with you. They are required to comply with your request no matter when you send it. (However, I recommend sending them what is referred to as a “limited cease and desist”, which means you forbid them from contacting you by telephone but allow them to contact you in writing. This is because if you forbid a collector from contacting you at all, they can then sue you to recover the debt because that would be their only available means of collecting if you won’t allow them to communicate with you.)

How do you request validation?

Your request must be made in writing, and you should send it via certified mail with return receipt requested. Be sure to keep a copy of the letter you send and the receipt. Here is a sample debt validation letter to give you an idea of what your letter should say. In case you don’t get a receipt confirming that the collector received your letter, you can track the letter via the USPS website.

What constitutes proper validation of a debt?

The FDCPA actually does not specify exactly what is considered adequate validation. If you were to sue the collector, or if the collector were to sue you, it would be up to the judge to decide what does and does not constitute ample validation. However, previous court cases have suggested that in order to properly validate, the collector should provide you with the following:

-proof of a contract between the collector and the original creditor to show that the collector is legally authorized to collect the debt from you

-a detailed accounting of how the debt was calculated (i.e. account statements from the original creditor)

-a copy of the contract between you and the original creditor, with your signature on it

What if the collector doesn’t respond to your request?

That’s fine, as long as they cease collection activity, and delete any listings of the debt that they have placed on your credit reports if they fail to validate within 30 days of receiving your request. If they do not comply with those requirements, they are in violation of the FDCPA and you can sue them for $1000. If you’re not especially eager to sue, you can send them a letter first warning them that they are in violation and that if they don’t straighten up, you will be forced to report them to the Federal Trade Commission (FTC) and possibly sue them. Chances are, you won’t need to pursue the issue any further than that. (If the debt is still listed on your credit reports, be sure to dispute it with the credit bureaus in addition to contacting the collector).

What if the collector’s response is not sufficient to meet the requirements of proper validation?

If this is the case, and the collector continues collection activity they are violation of the FDCPA. If they continue to report the debt to the credit reporting agencies, they are in violation of both the FDCPA and the FCRA. You should notify them in writing that their response did not constitute adequate debt validation, and that they are now in violation of the laws. For FDCPA violations, you can sue them for up to $1000 total, and for FCRA violations, you can sue for $1000 per violation.

If they are listing the debt on your credit reports, you should also dispute the listing with the credit bureaus. It may be helpful to send them copies of the correspondence between you and the collector to prove that you requested validation and the collector failed to comply. If the credit reporting agency contacts the collector regarding the listing, and the collector verifies the debt as accurate, they will again be in violation of the law for verifying a debt that they cannot or will not validate.

**A word of caution

A collector cannot sue you in response to a validation request without validating the debt. If they do, they are in violation of the FDCPA. However, be advised that if a collector does provide validation, they could then file suit against you. So it’s wise to use good judgment about requesting validation for debts that you know to be legitimate and that you could not afford to pay should they be validated.

As you can see, debt validation can be a useful weapon against collection agencies and junk debt buyers. I hope this article has helped you understand the concept of debt validation and how and when to use it; if you have any questions please feel free to leave a comment!

Post from: Credit Repair and Debt Solutions

Debt Validation

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1. Debt Validation Sample Letter

You will also notice that the below letter mentions that you dispute the validity of the debt. If you don’t dispute the debt’s validity, you may leave that statement out. But please be advised that if your letter does not include this statement, it will be assumed that the debt is valid. As with any other correspondence you send to a creditor or collector, be sure to mail the letter via certified mail with return receipt requested, and keep a copy for yourself.

Date

Sincerely,
Your Name [do NOT sign anything you send to a collection agency or JDB; if you do, your signature could "mysteriously" appear on other documents you've never seen before, let alone signed!]

Post from: Credit Repair and Debt Solutions

Sample Statute of Limitations Dispute Letter

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