“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

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

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

Related posts:

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