December 30, 2018
Cleaning Up Your Credit History
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Do you have derogatory items on your credit reports? These negative marks are bringing down your credit score and they need to be removed from your file.
You can file a dispute to challenge the accuracy of any item on your report. A law passed in 1970 called the Fair Credit Reporting Act, gives you this right. It also says the credit bureaus must investigate your dispute and verify it with the lender. If the bureaus are unable to verify an item then it must be removed from your report.
This law has been in effect for over 40 years, yet you still hear people say that credit repair is illegal. You will never face any legal problems for disputing an item on your report that you know is accurate. You are legally able to dispute any item that you feel is inaccurate.
To file a dispute with the bureaus you need to write a letter. In your letter you need to include: your name, your address, the item in dispute, the reason, and the dates. Your reasons are plentiful and can be as simple as: not my account, incorrect balance, account is paid, etc.
Once the bureaus get your dispute letter they will either deem it valid or invalid. If your letter is deemed invalid then you will typically get a response requesting more information about your dispute. Once you submit a valid dispute the bureaus will investigate and often times an item will not be verified and will end up being removed from your file. According to experts nearly 80% of all investigations result in the removal of an item.
The hard part is getting the bureaus to find your dispute valid. The credit bureaus are governed and regulated by the aforementioned Fair Credit Reporting Act and must comply with this law. However the bureaus do not earn any extra income by correcting information they have collected about you, and instead they only spend money that is otherwise profits.
As you can see they have no financial motive to ensure they only have accurate information about you. It gets worse because Congress decided to give the bureaus the power to decide what disputes they will investigate and which ones they will not. This does not make any rational sense to any logical human being.
The credit bureaus have faced FTC fines year after year for not complying with the Fair Credit Reporting Act. Yet despite this and the clear financial motive not to investigate and correct information they have collected about you, Congress gave them this power. We believe this is one more time where lobbyists and big business influence has left the consumer in need of help.
You have three roads to choose from going forward, the first road is you just live with your bad credit. Many people naively believe that after 7 years an item will just fall off your report, however more commonly debt collectors will illegally report an account for much longer than 7 years, and often these companies do face fines for breaking the rules. However while they may pay a fine you will still continue to pay the high cost of a low score.
Another route is to fix your report yourself. This is going to require you to be organized and persistent. Additionally you’ll need to continuously educate yourself about the ever evolving consumer credit laws but you can get these items removed without any outside assistance. The last option is to hire a professional credit attorney. These law firms are very affordable with roughly a $150-$200 upfront fee and then about $70-$00 a month until your credit is repaired. However, whatever option you choose to proceed with, just make sure you don’t just live with bad credit.
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