CREDIT REPAIR 

Disclaimer:

Please remember that although we are providing you with information to assist you we are not your attorneys and cannot and will not provide you with legal advice or represent you in any capacity. Nothing contained herein  should be construed as legal advice. The information provided herein is general in nature and is not a comprehensive or exhaustive treatment of any of the topics discussed. Thus, it should not be construed as a replacement for an attorney or other professional. In addition, the information provided, while believed to be accurate, may not be, and thus no action should be taken by you based upon any information provided herein without your own independent verification of the accuracy of the information.

Personal credit problems are plaguing Americans in epidemic proportions. It is estimated that 6 out of 10 people have credit problems. Individuals rely on their ability to purchase with credit those items that would otherwise be out of reach, such as cars and houses. Currently, the average person carries three credit cards and has a total debt of about $5,000. This translates to about 3 three trillion dollars worth of personal debt for all Americans.

Since the early 1990s, an increasing number of consumers have experienced credit problems, in one form or another. There are several reasons for this credit difficulty: The changing economy which has resulted in job loss, downsizing, and relocation; real estate devaluation; divorce, illness or injury; over-extended credit; living beyond ones means.

Whatever your situation, you are reading this book in order to take control and to overcome the stress of having a poor credit rating. You know already from experience that without credit, the best opportunities that our society offers become out of reach.

The only solution is to start thinking of long-term recovery. There is no band-aid, quick solution.

The first step is to read this book carefully and fully grasp the procedure and the options open to you. Then you must proceed to act in a methodical manner that yields consist results.

This book will provide you with enough information that will enable you to take charge. All credit problems are redeemable - no matter how difficult they may appear at first glance.

The only way to reverse and repair bad credit is by looking forward and never looking back. Financial problems have plagued us all at one time or another. Do not become a victim of self-pity. Rather strive to affect a positive change in your life, and do your very best. You will soon see success in all that you pursue.

Financial stress is one of the hardest things to deal with. This is the time to look at all that you can do that is positive and affirmative. Concentrate on that, and follow through systematically with cleaning your credit problems, and before long you will see your financial life beginning anew.

Most important of all - never stop believing in yourself!

No doubt you already know that credit is the ability to pay your bills on time. This translates into your ability to obtain money or merchandise with the understanding that you will pay for them at a later time.

It was through credit that you obtained items such as a car, a house, a computer, even a vacation. Without credit, you would never have had liquid cash to pay for these items on an up-front basis.

Generally speaking, there are two types of credit available to you: Secured and unsecured.

Secured credit is a loan that uses the item you will purchase with the funds as its security. This means that the lender owns the item until you pay for it in full (like a car or a house).

Unsecured credit is a loan that is given solely on the reputation and credit-worthiness of the borrower, where the lender has faith in your ability to repay the loan amount. This is also known as a signature loan.

A credit bureau (also known as a credit reporting agency) gathers, maintains, and sells information about consumers' credit history. This information consists of payment habits of loans to lenders such as banks, credit unions, finance companies and retailers, as well as reports from landlords and the IRS. These facts and statistics are stored in a computer database and are sold to prospective lenders in the form of a credit report. Therefore, when you apply for a loan or a credit card, the lender orders and buys a credit report from a credit bureau to scrutinize your credit history. It is upon the basis of this history that a lender judges whether you are credit-worthy or not.

A credit bureau does not make any decisions in the lending process - it merely provides lenders with information that they need to evaluate your application for a loan or a credit card.

The cost per report is $8.00-$10.00, and it is best to get a copy from each of the three bureaus. You will receive your credit report in about 30 days, and it will consist of a listing of your various credit activities for the past 7 to 10 years. The bureaus will send you a booklet along with the report, to help you decipher the report correctly.

There is a lot of information crammed into each and every credit report. The task of reading one may seem impossible. But if you carefully examine your report, and follow the helpful points in the accompanying booklet you will begin to make sense of what is contained therein. Also, don't be shy about using the toll-free number provided at the top of the report. If you find yourself really stuck, call the bureau.

Make sure that each item is accurate and correct. Pay special attention to the account number, name of lender or creditor, date when account was opened, balance, and credit rating. This is quite an involved process, so don't lose heart. Interpret one entry at a time. Keep in mind as well that each of the three bureaus employs a different method of reporting. This is why the accompanying booklet is really handy. However, to make this task a little easier, we shall look at all the codes that these reports use, in order to familiarize you with what they mean.

The important features in every report are: Bankruptcy, judgment, tax liens, suits, wage assignments, charge-offs, checkpoints, past-due accounts, and foreclosures. These are items that give lenders alarm; these are entries they do not like to see. It is precisely these types of negative or derogatory entries that we will concentrate on removing.

Now let us look at how the information is displayed in a credit report. The trend among credit bureaus is to make these reports easier to read, but they all still lean to the cryptic. Each entry is referred to as a "field". The next Section will make your credit report far easier to read.

The Equifax fields consist of the following:

Company Name: This is the name of the lender that is reporting credit information about you pertaining to an account you have with them.

Account Number: This specifies the account you have with the lender.

Whose Account: This specifies who is responsible for the account with the lender.

There are nine types of accounts:

Date Opened: This states the month and the year when your account was opened with the lender.

Months Reviewed: This states the number of months the lender has reported your account's credit history to Equifax.

Date of Last Activity: This gives the date of last activity on your account, such as the latest payment received.

High Credit: This states the highest amount charged to your account, or the highest credit given to you by the lender.

Terms: This outlines the terms of your account with the lender, such as, the number of installments per month, and the monthly payment amount on the loan.

Items As Of Date Reported/Balance: This states the amount owing on your account at the time it was reported to Equifax by the lender.

Items As Of Date Reported/Pmt Due: This gives the amount that is past due on your account at the time it was reported by the lender.

Items As Of Date Reported/Status: The represents the status of your account. It is given as a letter-number combination. The various codes are below:

Date Reported: The date when information was last updated on your account.

Other Account Information: This enumerates various items that do not fit into the above categories, but still effect your credit.

Collection Accounts: This lists the accounts that your lenders turned over to collection agencies. It contains the following information:

• When the collection was reported
• When your account was given to a collection agency
• The amount involved in the collection
• The date of last activity on your account
• Type of account

Courthouse Records: This contains public record items, obtained from local, state, and federal courts, that reflect your history of meeting your financial obligations.

Additional Information: This gives information about your previous addresses and places of employment as reported by your lenders.

Inquiry Section: This gives a list of businesses that have received your credit report in the last 24 months.

TransUnion uses different field designations than Equifax. They are:

Subscriber Name: The field gives the name of the lender.

Account Number: This states your account number with the lender.

ECOA: This is the Equal Credit Opportunity Act account designations. These codes describe the type of ownership of your account. They are:

Subscriber Code: This states the lender's subscriber code number.

Date Opened: This gives the date your account was opened.

High Credit/Credit Limit: This states the high credit or the highest amount ever owed on your account.

Date Verified/Date Closed: This is the date when the credit information was reported to TransUnion. These dates all have letter codes. They are:

Balance Owing: This shows the amount owing on your account as of the date reported above.

Amount Past Due: This field shows the amount past due on your account as of the date reported above.

Type of Account and MOP: This consists of two series of codes: The type of account and the manner of payment on your account. The codes are:

Collateral: This gives the collateral put up for an installment loan.

Terms: This outlines the term of the loan, such as, the number of payments, frequency of payment, and the dollar amount due for each payment.

Remarks/Type Loan: This describes the type of installment loan, such as, a car, a boat, personal, etc.

Maximum Delinquency (Date/Amount/MOP): This mentions the date when the maximum state of delinquency occurred, the total amount involved, and the rating at the time of delinquency.

Payment Pattern: This describes your payment pattern for your account covering the last 24 months.

Historical Status: This gives historical information about your account, such as when the account was reported to TransUnion, the number of times your payment was late, etc.

Other Account Information: This lists those items that do not fit into the above fields.

Inquiry: This lists the names of companies that have inquired about your credit file over the last 24 months.

Promotions: This lists the companies that were given credit information about you in connection with promotional activities that they were carrying out.

Collection: This lists all your accounts that are or were turned over to collection. This field contains the following information:

• The subscriber code of the lender
• The amount of the collection
• The ECOA designator
• The status of your account
• The date collection was reported to TransUnion
• The date your account was paid (if applicable)
• The lender involved in the unpaid balance

Public Record: This lists public record information about you. This will include: The location of the court where the public record was recorded, the court type, the date the public record was reported to TransUnion, the ECOA designator, any liabilities or assets, and the type of public record. This list will also include the date paid (if applicable), the docket number, the plaintiff and attorney involved in the case.

The Experian credit reporting format is very straight-forward, and does not use any code systems. It is written in plain English, clearly describing each field and entry.

Lenders look at your credit before considering your application. Your entire credit history is graded according to a credit risk score that is determined by various mathematical formulas where numerical values are assigned to all the fields in a credit report. The most common type of credit risk score is the Fair, Isaac (also known as the Isaac, or FICO) score.

Whenever you apply for credit (a loan or a credit card), the application form usually gives the lender permission to retrieve your credit report from a credit bureau. Once the lender has your credit report, he then measures your creditworthiness. Many lenders use a short-term debt to income ratio in which your current short-term debt payments (excluding long-term debt such as a mortgage) are divided by your total annual income. A lender will refuse to give you a loan if your short-term debt is more than 20% of your annual income.

The other method that lenders use is to add up your monthly bills (excluding mortgage/rent and utilities), and divide by your gross income (before taxes). With this method, a lender looks for a ratio that is below 35%.

Lenders also look at various other factors, the most important of which are:

• Number of years at your present job. A lender likes to see job stability which assures him that you are a better credit risk.
• Your occupation, numbered from the least to the most desirable: 
  

  (1) Manual work

  (2) Clerical Work

  (3) Self-employed

  (4)Managerial

  (5) Professional.

   

• The number and nature of negative entries in your credit history. The worst entries to have in descending order are: 
  

  (1) Bankruptcy

  (2) Charge-offs

  (3) Collections

  (4) Court Judgments

  (5) IRS Liens

  (6) 120 Days Late Payment

  (7) 90 Days Late Payment

  (8) 60 Days Late Payment

  (9) 30 Days Late Payment.

• The amount of credit you currently have. Lenders look for how much debt you could incur if you maxed out all your credit cards, for instance. It is usually a good idea to have as few credit cards as possible, especially department store credit cards, which you cannot use outside the store.
• Saving and checking accounts.
• Telephone in your own name.
• Number of years at present address.
• Own your home.

This Section showed you the basics of credit - how it functions, and how it effects your own credit worthiness. You also know how credit bureaus work and what kind of information they pass on to lenders; and you also realize how important your credit is, and how it is scrutinized by lenders.

In the next Section, we shall begin going through the process of fixing your credit. This will be a step-by-step approach, so you will not have any confusions as to what to do next.

No doubt you have heard a lot about credit repair, and various opinions either way whether it can be fixed or not by your own efforts. Here we will give an impartial overview on the

subject. You need to be fully aware of the legal ramifications of the actions that you will undertake and initiate, and therefore, you should not have confusions in your mind as to what is the proper step for you to take. Examine this Section carefully, and then proceed with your plan of action.

We all know that negative or derogatory information will stay on your credit report for seven years. The cynical advice given by most people is to wait it out; that only time (seven to ten years) can clear your record; that there is no easy solution. The fact behind this statement is that all credit bureaus purge or cleanse an individual's files after seven years, thus giving him or her a fresh start. A bankruptcy will stay on file for ten years. This has been the result of the Fair Credit Reporting Act (FCRA), which was enacted in 1971 in order to insure that credit bureaus fully investigate any credit items disputed by consumers. This law has set guidelines which give an individual the right to challenge the accuracy and validity of credit listings on his or her credit report. The law also specified that if the challenged items could not be verified, or were inaccurate, they had to be deleted from an individual's credit file. The details of the FCRA are below:

1. You have the Right of Access: You can find out what type of information is in your credit file at any credit bureau. But some agencies interpret Access in different ways, in that they will only allow you to view your credit file. Access never means that you can go into a credit bureau office and physical handle your file.
2. You have the Right to be notified of Adverse Action: If you have been denied credit, insurance, or employment, then you can access your file (by way of a copy) and find out if the information you have is correct. You can get a free copy of your credit report if you request it within 30 days of the denial.
3. You have the Right be to notified of any Investigative Consumer Reports: If the credit bureau is interviewing other people (such as friends, neighbors, fellow-employees) about you, then the credit bureau, or its agents, must inform you in writing that such an investigation is underway. Secondly, you have the right to send a written request asking about the nature and purpose of this investigation. The credit bureau must reveal to you the questions they are asking, the number of people being interviewed, and the name of the agency on whose behalf they are investigating.
4. You have the Right to Confidentiality: The only reason your credit file exists is for the purposes of credit, insurance, employment, or government licenses. However, a government agency can only get into your file with a court order.
5. You have the Right to Accuracy: Only information that is current and accurate must be kept in your credit file. All other information must be deleted.
6. You have the Right to Sources and Information: Those who file information about you in your credit file, as well as those who request information from your file must be disclosed to you by the credit bureau.
7. You have the Right to Penalties: If your file was obtained by a third party illegally or under false pretense, then you are entitled to seek criminal penalties.
8. You have the Right to Dispute Entries: The credit bureau must investigate and reinvestigate any entry that you dispute as incorrect or inaccurate, within a reasonable amount of time, namely 30 days. If the entry is indeed inaccurate or incorrect, or cannot be verified, then it must be deleted. If the dispute cannot be resolved between you and the credit bureau, then the credit bureau must enclose a brief statement in your file which notes the existence of the dispute.
9. You have the Right to be notified of Adverse Public Record Information: If the credit bureau chooses to forward information to a third party pertaining to public record items such as: Arrests, suits, convictions, liens, or bankruptcies, it must notify you as to whom and why such information was disclosed.
10. You have the Right to Legal Recourse: You may proceed to bring a civil suit against a credit bureau for noncompliance with the FCRA. There are no restrictions as to the amount of the suit.

If you examine your rights carefully, you can easily discern that derogatory or negative information can be removed from your credit record.

But be warned that the process is not simple. As can be expected, when you first begin to make inquiries about your credit file, the credit bureaus will make you run a lot of hurdles, such as asking for more information, further clarification, and additional identification. The dispute system itself can be frustrating and, worst of all, discouraging. But do not give up. That is the simple key to your success. Be dogged. Don't take no for an answer. And don't take silence to mean "No".

The common myth is that credit bureaus must complete their investigation within thirty days (after you file your dispute); if the process takes longer, than they must remove the disputed information from your file. This is simply not accurate. So don't waste time by planning to sue the credit bureau if it takes longer than thirty days to investigate your claim.

It is important to understand the fact that if you submit a valid dispute letter, and the credit bureau investigates your dispute, chances of you succeeding are excellent - no matter if the disputed negative listings are accurate. You see, accuracy has very little to do with the deletion of negative entries.

If a credit bureau cannot verify an item, it will remove it. But it will remove it in its own time. Not in thirty days. Keep in mind the fact that many lenders are hesitant to spend time verifying data on any given individual. This can work to your advantage.

The credit bureau can also choose to ignore your dispute, if they believe that your claim is "irrelevant" or "frivolous". This can happen if you tell the credit bureau that the derogatory information was the result of a divorce, job loss, health problems, or any other personal circumstances.

There are, as well, several other confused opinions about bad credit and its removal from your files. Let us look at some of these opinions.

1. Do not assume that if you pay off your past-due account (especially one that is a charge-off or given to collection) that your credit will no longer be negative. The fact is that even if you pay off all your past-due amounts, your file may still be negative. But you can work with lenders and credit bureaus in order to eventually delete such entries. More on this later on in the book.
2. Once a derogatory item is deleted from your file, it will stay deleted, unless your lender verifies the negative listing (even after the 30 day period). A lender may challenge your account anytime, and whenever he does verify the information, it shall again be added on to you file.
3. Bankruptcies and foreclosures are not impossible to remove from your credit record; they merely require a more methodical and intensive approach.
4. It is simple to dispute a credit item. However resolving such a dispute in your favor takes great patience and persistent, which you will need in order to succeed. But, then, your credit life is at stake. You should pull out all the stops. It is not an impossible task.
5. If you have chosen to file a "100-word statement" explaining your negative listings, you should move to remove it at once. Lenders are not interested in your side of the story and will regard this statement as proof of your bad credit.
6. Some people are often advised to make minor changes in their Social Security Number, or start using their EIN tax number in place of their Social Security Number, so a new file is created under your name. This is a difficult and illegal scheme and will eventually put you in severe hot water. You don't need to reduce yourself to such drastic measures. You can clean your credit with pure hard work, which is a lot more rewarding and fruitful.
7. Do not assume that if you build up enough good credit that it will offset your bad credit. Any amount of bad credit on your file is highly detrimental, because you are usually rated by a computer that is often programmed to reject any type of negative credit. Thus even one or two slow payments will result in your being turned down for a loan or credit card.

These opinions are given so that you can clear your mind of any preconceived notions about credit repair. As with most things, there are a lot of myths floating around. Your job is to look for the impartial truth that will guide you to make the right decisions and carry out the correct actions - so that you can achieve the desired results.

Yes, they do. But make sure you use a reputable one. Ask around, and don't be afraid to get references and check up on them. It is always best to get an attorney who does credit restoration; there are a lot of them, and they are easy to find. Merely look in the Yellow Pages for a list of such attorneys. There are a lot of con-artists in this industry, and you need to protect yourself. Proceed only to get professional help if you cannot devote the time or attention that is needed to repair your credit. If you undertake this task in a careless manner, you will do irreparable damage to your credit file, which may be impossible to repair.

You must commit your time to this project. Expect to spend 25-50 hours per month monitoring credit correspondences, drafting query challenges, analyzing your credit reports, writing follow-up letters, answering demands for more information, and talking on the telephone to negotiate deletion of derogatory entries. Each time you contact the credit bureau, you must communicate in a convincing fashion and you must emphasize your argument. If you fail to be convincing, the credit bureau will mark you down as a frivolous troublemaker who is to be ignored. This is when a credit file becomes almost impossible to repair. The entire repair process takes anywhere from twelve months to eighteen months.

You must also show an emotional commitment in order to deal with credit bureaus and lenders in an aggressive and persistent fashion. At first, you will face much rejection; only afterwards will you accomplish the results you want. You must be prepared to accept the treatment credit bureaus will give you: They will treat you more or less like a liar who is trying to dispute something that is indisputable. But don't lose heart. Don't get discouraged. And don't give up. Patience is the only skill you really need - and a thick-skin.

You must also show great organizational skills because you will have to keep track of literally dozens of communications. You must keep on top of timing, making sure that the credit bureaus and lenders have not over-extended their time limits, and you must effectively communicate with each of the three credit bureaus, which means simultaneous correspondence involving twenty or thirty letters.

This is not meant to scare you, but rather to prepare you for the fight ahead - but then you are fighting for your credit life itself - it's worth a little sweat. However, if you feel any degree of unsurety, do seek professional help, because credit repair companies do work - you just have to chose a reputable one. The best way to start would be the Better Business Bureau. However, you need to be educated about your options so you can work actively with a credit repair company. This is why you're reading this book, in the first place.

Alternatively, you may want to contact the Consumer Credit Counselors (CCC). They are a non-profit organization committed to assisting people resolve their debts. You can easily find their phone numbers in the Yellow Pages, under "Credit Counselors".

Primarily, CCC is an educational body that will help you in various capacities. For example, they can act as a liaison between you and your lenders, and help you extend your payments, have interest rates dropped, or have lenders accept a new payment plan. In this case, you give CCC a lump sum payment, and they in turn pay your lenders.

The basis of repairing your credit involves three processes: Disputing negative entries on your credit report, having those entries deleted, and rebuilding your credit.

There is also a method of behavior that you must follow and observe throughout each of these processes: Persistence, politeness and persuasiveness.

Here are some things you should never, ever do:

• Explain why and how the negative credit came about.
• Claim that your file has been mixed-up with someone else's.
• Verify the negative credit in any way (such as the actual date of the derogatory entry).
• Write a dispute letter that is more than a page long.
• Show unsurety about what you want done with the negative entries.
• Quote the FCRA or other legal matters in your letter.
• Repeat a dispute that you recently made.
• Threaten to sue.
• Use foul or abusive language in your dispute letter.
• Show any signs of weakness or hesitancy in your dispute letter.

Now, it is important to realize what actually happens once you send your letter of dispute to a credit bureau.

1. Your letter is first read by a lower-level employee called the "checker".
2. If your letter is too long, complex or vague, the checker may decide to throw away your letter, write you back telling you that your dispute is frivolous, or send you a letter asking for more information.
3. If your dispute letter says the right things and avoids the wrong things, your letter will get past the checker, who will pass it on to reinvestigation.
4. Once your dispute goes into reinvestigation, you will find that the thirty-day dispute period is very rarely observed. It is not unusual for credit bureaus to hold your letter for thirty days and then send you a letter soon thereafter informing you that they will begin investigation. There is nothing you can really do, but wait.
5. After the investigation is complete, and the lender has not verified the disputed entry, the credit bureau will delete that entry. This is known as a "soft delete". This means that the negative entry will be reinstated if verification eventually arrives.
6. In the case of courthouse records such as bankruptcies, judgments, or liens, the credit bureau must send someone to the courthouse to verify the listing. Usually, however, a credit bureau will contact one of the lenders in the case and verify the court document through them.
7. In the United States, there are also hundred of smaller, "pass-through" credit bureaus who act as local agents for the three larger credit bureaus. These pass-through bureaus have a very thorough method of investigation and must be handled in a unique and special way. If a pass-through bureau labels you as a persistent and regular disputer, they will soon come to ignore all your disputes. This is why they must be handled carefully.
8. Once your dispute is accepted, you will find that about one-third of the derogatory entries are deleted or improved to perfect. Once they have been deleted or improved, the credit bureau will send you a notice of these changes, along with a new credit report.

Now that you are fully aware of the entire process, let us begin undertaking your credit repair.

The first step in beginning the task ahead is to get a copy of your credit report from all three credit bureaus. The cost ranges from $8.00 to $10.00. Make sure you get the correct address for each credit bureau; the ones given in this book were accurate at the time of publication, but credit bureaus do keep moving their offices about at a regular interval; so it its wise to check and verify.

If you have been turned down for credit in the last sixty days, then you may obtain a free copy of your credit report. Simply write to the credit listed on your denial letter and request a free copy of your report. It will probably take longer than if you purchased the report outright.

You may also telephone the credit bureau and order your credit report. But be careful. Do not even mention the fact that you want to look at it since you are planning a dispute. There's no quicker way of raising red-flags. In other words, never talk to someone at the credit bureau about your dispute. Always put everything in writing.

When you send a request for a copy of your credit report, make sure you send it via traceable mail, such as "certified mail" or "return receipt requested".

Often the credit bureau will cash your check and make you wait. Don't panic. After a period of three weeks (if you still have not received your copy), send a follow-up letter, again via traceable mail, asking that the bureau send the report immediately. Include copies of the cancelled check and your original letter. If you still do not hear from them, you might have a chance of suing the credit bureau for mail fraud. But usually the credit bureau will respond - in its own time, of course.

Now is the time to organize. Make a note of everything. It is a good idea to get a day-by-day journal, and under the date on which you took action in regard to your dispute, make a note of what it was you did. At the same time, take careful note of when you wrote to a credit bureau, and skipping ahead mark the day when you should be hearing from them (say, three weeks ahead).

Also, keep the correspondence regarding each of your lender under a different file. Do not lump them all together in one big file. Keep each credit bureau separate as well. And keep each document filed in chronological order.

If you do have a telephone conversation with your lender, on a sheet of paper, immediately note down all the points discussed, what you agreed to do and what the lender agreed to do, along with the date and time of the call, the name of the person you spoke with, and his or her telephone number. If possible, try to get the name and telephone number of this person's superior as well.

When you receive your credit report, you will notice that each derogatory field is marked in a different way. Here is how the three credit bureaus show negative entries:

• Any entry rated higher than I1, M1 or R1.
• Any entry highlighted by the "" symbol.
• Any entry shown as a repossession, foreclosure, any write-off, paid charge-off, settled, settled for less than full balance, bankruptcy.
• Any collection account, paid or unpaid.
• Any court account: judgment, lien, bankruptcy Chapters 7, 11, or 13, divorce, satisfied lien, or satisfied judgment.
• Any item showing 30, 60, 90, 120 day late payment.
• Any inquiry on your account.

• Any entry rated higher than I1, M1 or R1.
• Any entry shown as a repossession, foreclosure, any write-off, paid charge-off, settled, settled for less than full balance, bankruptcy.
• Any collection account, paid or unpaid.
• Any court account: judgment, lien, bankruptcy Chapters 7, 11, or 13, divorce, satisfied lien, or satisfied judgment.
• Any item showing 30, 60, 90, 120 day late payment.
• Any inquiry on your account.

• Any item marked with an asterisk (*).
• Any inquiry on your account.

As you already know, the Experian credit report is written in plain English and is very straightforward. And you have learned how to decipher Equifax and TransUnion reports as well.

The first thing to do when you receive your credit report is to make at least three photocopies of it. Never scribble or write anything on the original credit report. Keep it in a file, safe, because it is an original document which you will need later on.

Now read each of your three reports and mark or highlight (on the photocopy) each time you come across a negative entry.

Once you've marked out all the derogatory entries on your report, you must now begin looking for inaccuracies and inconsistencies. Whenever you come across one, mark it off, or highlight it.

Remember, an inaccuracy is an entry that you know is not true, such as an item that does not belong to you, or a listing that shows the wrong balance. An inconsistency, on the other hand, is an inherent contradiction in the credit report itself. Below is a handy check-list that you can use:

• Late pay history is wrong.
• Account type is wrong.
• Balance of your account is wrong.
• Status of your account is wrong.
• Date of account is wrong.
• Account number is wrong.
• Account does not belong to you.

• Personal information is wrong.
• Past addresses are wrong.
• Account is shown to be older than possible.
• You never lived in the area of the court record.
• Duplicate accounts.
• Item shown in BK field, but no BK is listed.
• There are more late pays than months reviewed.

Once you've marked all the derogatory entries in your report, it is now time to begin charting a course of action. Before you begin this process, here are some do's and don'ts that you should carefully heed:

1. Never lie in any of your disputes or credit applications. As you may be aware, lying on a credit application is a federal offense. As well, you really have no need to lie in order to dispute your credit report. In fact, you are disputing the report because you believe that it contains information that is unverifiable, inaccurate, or obsolete. If there is information that is technically accurate, your dispute letter should state: "I do not believe the following listing is correct".
2. Make sure you tell the credit bureau what it is that you are disputing - the existence of the entry itself, or the information contained in the entry. This is an important difference. You need to tell the credit bureau whether you believe that the entry does not belong to you at all, or if you believe that the information in the entry should be changed. If you show any confusion at this stage, the credit bureau will promptly return your letter with a note that it is frivolous.
3. Make sure you tell the credit what you want them to do. You have two options: Ask them to delete the entire listing, or secondly erase the late pay notations in the listing. The information in bankruptcy, lien, collection, charge-off, repossession, foreclosure, or settled account cannot be challenged. All these must be disputed in order to be completely deleted.
4. Make sure you provide a reason for your dispute, such as: You don't recognize the listing as reported, or that you would know if you were as late as reported. If you do not give an explanation with your dispute, the checker may simply ignore your dispute.
5. Do not flood the credit bureau with disputes. Send only one dispute every 90 days. For each one, use inaccuracies and inconsistencies to show how wrong the information is on your credit report.
6. Always send an original copy of your credit report with the dispute letter. At this stage, you may mark the report to bring inconsistencies and inaccuracies to the attention of the checker. Always include personal information about yourself in the letter itself, namely, your full name, current address, date of birth, and Social Security Number.

Step One:

  The credit bureau will take the information you have given them and verify that it is on your credit report as stated in your letter, provided they do not ask for more information (which, if they do, you can readily supply them). They will then authenticate the entry with the original lender. If they cannot verify the entry, they will remove it. This will only be a "soft delete", however, meaning that the information will be reinstated on your credit report anytime the credit bureau receives verification from the lender. This process will take 45-50 days, and you will receive details of the result from the credit bureau thereafter.

Step Two:

It is not unusual that the first letter does not quickly resolve anything. It is now time to send the second letter. In this letter you again provide all the information you gave in the first letter, and it further states that you wish to request a re-investigation of the matter, and that you would like to have information from the credit bureau as to whom they contacted at the lender's offices.

When the credit bureau receives your second letter, it will reinvestigate the information you provide. If any entries are not resolved to your satisfaction, they will send you the details on the person they contacted at the lenders' offices, in order to verify the information. You can use these details to contact the lenders directly and discuss matters with them further, at a later date.

At this stage, you have done all that you can do with a credit bureau. Now it is time to look at the various responses you will receive.

To all of your disputes, you will receive the following kinds of responses from the credit bureaus. First of all, another word of caution. If you receive a response that you do not like, you should never, never start fuming and shoot out an angry, nasty counter-letter, or worse pick up the telephone and start ranting. Remember, you are dealing with a very large bureaucracy, not a single person. Chances are, your second letter will probably end up on the desk of a person different from the one who looked at your first letter. Anger is never a good strategy at this stage. It is better to cover all the old ground again in your second letter, and submit the dispute again - always in a rational, polite and controlled tone of voice.

Response #1: If you get a letter asking for more information on your dispute, you should write a new dispute, in which you repeat what you said in your first letter, and include all the information that the credit bureau has requested from you. It is good to remind the credit bureau that all of this information was already sent to them in your first letter. Write the following letter:

Response #2: If you send in too many disputes, the credit bureau will likely not take you seriously, and reject your claims completely. You must respond by repeating all of your dispute and demanding that the credit bureau take immediate action on the matter. Use the following letter:

Response #3: If you receive a rejection on the grounds that your dispute is "frivolous and irrelevant", send the following letter:

Response #4: If you get a response that tells you that your dispute has been rejected because the credit bureau believes you are manipulating the system, you should respond in the following manner:

Response #5: If you receive a letter from the credit bureau stating that they have begun investigating your dispute, you must wait and work according to their timetable. If after a period of 60 days, you do not receive a response, write the following letter:

Response #6: Your credit bureau may send you a letter stating that your dispute has been referred to a local ("pass-through") credit bureau, who will conduct the actual verification. This may take an additional 2-3 weeks. Again, be patient. This time you will certainly receive a response, as "pass-thorough" credit bureaus are never "silent" for long, given their usual thoroughness.

Response #7: If all goes well, you will receive a new credit report showing the results of the investigation. When you get such a copy, examine it thoroughly and carefully, making sure to note which items have been deleted and which have been converted into perfect credit. The easiest way to do this is to compare the new report with the old one, and take note of which negative entries are missing. It is usual for Equifax and TranUnion to provide a list of disputed entries, and what action was taken on them - whether they were deleted, verified as accurate, or changed to perfect. Experian provides a list of disputed entries at the back of the report; you should compare this list with the one you provided, and then check how the disputed entries were resolved.

The results you receive from the credit bureau may not lead to a quick deletion or a change to perfect standing. The results that your dispute generates will largely depend on how your claim is handled by the credit bureau. There are several procedures that credit bureaus undertake, and each of them leads to a different result. Below is a list of these, and what you need to do in order to counteract the credit bureau's decision.

Result #1: Your dispute was not investigated at all, because you may not have been 100% clear in your first letter as to what you want the credit bureau to do. As well, the credit bureau may have chosen to ignore your letter, leaving the onus on you to re-submit another dispute letter. This you should do immediately after waiting 60 days.

Result #2: Your dispute was investigated and verified as being true and accurate. You have the right to challenge the same entry again. Again you should wait 60 days after you receive this notice from the credit bureau, and begin afresh. Remember, the credit bureau is obliged to look deeper into a dispute than merely asking the lenders to check their computer records about your account.

Result #3: Your dispute was investigated to determine the correctness of the information contained in the entry, and the investigation found that the entries were indeed inaccurate or unverifiable. The negative listing will now be perfected to a positive listing, and the credit bureau will send you a new credit report showing this change.

Result #4: Your dispute was investigated and the negative entries themselves were found to be inaccurate, or were unverifiable. The credit bureau will delete these entries permanently and send you a new credit report showing this change.

Result #5: Your dispute was erased using "soft delete". Eventually, the disputed entries were verified by the lender as being correct, and they were re-instated on your credit record. If this occurs, you must begin the process again, and vigorously ask for a thorough investigation. But you should wait a period of 60 days before restarting, otherwise the credit bureau will mark you down as a time-waster and choose to ignore you completely.

Keep in mind that the entire process is very time-consuming, so you must not get discouraged at the first onslaught of disappointing news. And you will get lots. Keep at it, however. Be persistent. Be dogged. Be thick-skinned. And always allow a period of 60 days before beginning again. If you do not give up, you will get results. To have any measure of success in our society, you need to have good credit - so a hard fight is well worth it.

Breathing Space I

Let's take some time to review what you have learned and done so far. In this entire process, it is very important to take time to reflect and plan new strategies. Let's summarize:

1. A credit bureau is a body that is working for lenders; it is not responsible to you.
2. Despite this hindrance, it is possible to remove derogatory listings from your credit file, despite the fact that you still owe money.
3. There is no federal law in effect that forces derogatory listings to stay on your file for seven to ten years. The law merely states that a negative listing may remain in your file for up to seven to ten years.
4. You have the right to dispute incomplete or inaccurate information. You are not breaking any law by instigating such a dispute. Do not let anyone tell you otherwise.
5. You do not have to lie when disputing your negative listings. You are merely disputing their accuracy.
6. Credit reports are often full of errors, in that the information is either incomplete or inaccurate.
7. You have a right to dispute such incomplete and inaccurate information, even though that information is partially correct.
8. You may also dispute on the basis that the information is "questionable". Such information may be a small collection account that is several years old.
9. Always dispute one negative entry at a time.
10. Make sure you keep an accurate record of your own activities. Specially, make sure to keep a track of the 30-day time limit that you give always give the credit bureau.
11. Never use the research request form that credit bureaus always enclose with each copy of your credit report. Write a separate letter for your dispute.
12. When the disputed information is changed or modified, it is the first credit bureau's responsibility to notify the other credit bureaus so that the information is uniform.
13. At times, you may have to take up the dispute directly with the lender. In that case, make the lender supply you with the full evidence that supports the derogatory information. Despite computerization, the number of mistakes, inaccuracies and errors are amazingly high - all because of human error and laziness.
14. If you have not seen results up to this point, then you can negotiate your account. Go directly to the collection agency or lender, and simply state tat you will be willing to settle for less than what you owe. Offer 60% of what you owe. Simply tell the collector/lender to take it or leave it, or to leave you alone, otherwise.
15. Never negotiate on the telephone, or come to an oral agreement. Always put everything in a clear, simple letter. Time is on your side. Wait until you are contacted, and then take your time replying.
16. Always keep in mind that all unsecured debt is fully negotiable. Use this to your full benefit.
17. When you do pay the collection or charge-off, never sign anything that the collection agent gives you. Simply pay and move on. Remember, the check you give the collection agent is your receipt. It will bear all the markings of the bank where it was deposited, along with the date. You do not need any more to prove that you paid.
18. If you settle your debt for less that what you owe, you could incur a federal tax liability. You may want to get a 1099 form from the collection agent or lender, stating how much you have to add to your income tax return. If you filed for bankruptcy, however, you are under no tax obligations.
19. Do not take the "File Segregation" route. Stay away from misrepresenting yourself. Many credit repair companies may offer to give you a new identity by using an Employer Identification Number (which are assigned by the IRS for businesses). Do not substitute your Social Security Number with an Employer Identification Number. Simply put, it is illegal. It is best to use legal, proper means to repair your credit. Often it is people who have recently filed bankruptcy that are targeted by this scam. Keep well away. You have more in your arsenal than scamming.
20. If you are still not happy with the results, then it may be time to lodge an official complaint against the credit bureau. Make sure to let the credit bureau know that you are complaining. If you are really unhappy, you may want to sue the credit bureau. That is best done with the advice of an attorney.

The more you dispute the entries on your credit file, the more difficult it may become for you to convince the credit bureau that you are serious. At this stage, it is not a bad idea to consider legal threats to the credit bureau. Before you think that this may be an outrageous solution to your problems, remember you are being mistreated by the credit bureau, and you need to show it that you are serious about your claim and your dispute. As a consumer, you have the right to resort to legal settlement when your own, personal efforts do not lead to results. Do not hesitate because you have approached them to look at your disputes countless times. They will notice when you begin talking tough. Below are some examples for you to follow.

Option #1: You may sue the credit bureau every time it fails to comply with the Fair Credit Reporting Act. The most successful suits, however, are those disputing derogatory information that does not belong to the consumer. But do be careful about using the term "sue". Mention it only if you will seriously start a suit against the credit bureau. You letter should look like this:

Every day, credit bureaus find themselves enmeshed in lawsuits from individual consumers. Such suits cost the credit bureaus large sums of money in both legal costs and awards to consumers. This strategy will bring you quick results.

Option #2: You may also wish to file a complaint against the credit bureau with the Federal Trade Commission (FTC), which regulates and monitors the activities of all credit bureaus. It is in the best interest of the credit bureau to limit the number of complaints about itself to the FTC. You should write the FTC in the following manner:

It is not a bad idea to include a copy of this letter of complaint when you write to the credit bureau again, so they will know that you are serious and unrelenting about your dispute.

Option #3: Another way to get the attention of the credit bureau is write to your congressman or senator. In this letter, you should be expressing outrage at the conduct of the credit bureau in question. Use the following example:

Credit bureaus do not like any type of confrontation with federal or state representatives. It is a good idea to include a copy of this letter with your dispute, just to let the credit bureau know you mean business and are tired of waiting around hoping for something to happen. At this stage, you need to show them that you are fully in charge of the situation and that you are ready to do anything, within reason, to achieve your ends.

If your credit rating is negative because of unpaid debts, then you should seriously consider settling all your debts. If you owe lenders money, they will make sure to keep the derogatory listing on your credit file, no matter how many investigations you initiate. Even if you manage to delete an unpaid listing, it may still show up on your credit rating sooner or later, especially if your account is turned over to collections. In other words, do not try to escape your debt. Settling your debts is a better option. This Section will give you details on how you can arrive at a workable agreement with your lenders.

First of all, do not stress out over overdue debts. We have all heard the scary prospects of seizure and wage garnishment. But there really is not much that lenders can do when the money you owe is unsecured, such as credit cards, other than hand over your account to collection. If your loan is secured, then the risk to your property is very real, and repossession can take place.

Here, you must differentiate between unsecured and secured debts. Unsecured debts are all those amounts that were given to you without collateral. Such debts include: Credit cards, department store cards, personal loans from people you know, collection accounts, student loans, medical bills, utility bills. Most of these can be settled for less than what you actually owe. However, it is usually true that utility companies will not settle for less than what they are owed. But most will take and agree to a settlement.

Secured, collateral-based debts are home and property mortgages, and car loans. The usual scenario in these types of loans is repossession. It is often less costly for the lender to simply take the property rather than go through the bother of coming to terms with you. If you are having difficulties with such a debt it is best to negotiate some sort of payment relief; most lenders are willing to do this for you.

If your credit is still good, and you have paid late, but are now beginning to feel the pinch and feel that you are unable to carry on with your payments, it is best that you talk with your lenders. Explain to them your situation; they will usually give you some sort of relief. Do not merely stop paying your bills, because that can make a bad situation a lot worse, very fast.

If you are struggling with unsecured debt, keep in mind that on a small amount (below $10,000), very few lenders will go all the way to garnishment - because these are costly court procedures, and it does not make financial sense for a lender to spend more than what he can and will recover. Even if a lender went all the way to court, he still cannot recover 100% of the loan amount. It is always easier for the lender to turn over your account to collection. However, do keep in mind that legally, the lender is within his rights to use whatever legal means to recover his money. Having said this, you should do one thing: Ignore the incessant hounding of the lender and the collection agency. They can write you threatening letters and make intimidating phone calls - but that's more or less it. You have little risk of reprisals from them. The only thing they can do is to make sure your credit rating stays derogatory. But in the end, you must decide if the risk is worth or not.

It is not uncommon for most people to come to a settlement of their debt at less than what they owe. The usual rate is 60 to 75 cents on the dollar.

With the passage of time, you will find that you are getting less calls from your lenders and collection agents. If this has happened, then your debt has been filed away for future attention. In one sense, this is the best scenario for you, because now you can negotiate with greater ease. The rule of thumb is that the longer your debt remains uncollected, the better your chances of getting a good settlement.

The more time passes, the more likely your bad debt will be seen as a loss, and the lender will then get a corporate tax write-off. Of course, you are not free and clear, because you still owe the lender money: He is merely choosing to ignore it for the moment, and he can at any time reopen your file and give your account to collection again, seek a judgment against you, or garnish your wages.

Often times, when consumers seek to settle their debts, they tend not to have 100% of the debt amount to pay to their lenders. A large part of the debt amount is made up of accrued penalties and interest charges while the account was 60, 90, or 120 days past due. Thus asking for settling for less than what you is owe is rather reasonable, and the lender knows that it is in his best interest to get the most he can get on a losing proposition.

The primary concern for you in this scenario is not to let the lender know that you can afford to pay the debt. If the lender thinks that you have money, he will, in a way, have the upper hand and will insist on payment in full.

The trick here is to make your lender believe that you are on the brink of personal bankruptcy and you have very little money to give him, so he should take what you can give him. Make sure you let the lender know that this is your last chance at some sort of financial recovery - before you choose bankruptcy. The lender knows that once you declare bankruptcy, he is not going to get one penny.

Time really is on your side. Do not be too eager to settle. Take your time. There is no rush to settle. Do not accept the first offer that your lender gives you. As a matter of fact do not even accept the second. Let him wait. Let him contact you and let him make the settlement happen. You should merely hold off from agreeing too quickly to anything he puts on the table.

You can afford to drag matters out, because you have something that the lender wants. Hold out until you get what you want. Once you've paid, you have no more advantage. And make sure that the lender puts everything in writing before you pay him.

As we have discussed, after seven years the negative listing will disappear by itself, because each person's credit file is completely purged every seven years. If you choose to ignore the debt, you will probably never hear from your lender again. There's very little he can do. And after seven years, the derogatory listing will disappear.

In the past, if you paid any amount on your account after a long delay, the seven year clock would start all over again. Happily, this is no longer true, and you can now pay off your collection account or charge-off, and your seven year period remains at its original setting: The day it was originally late, however many years back. Once your account goes past due and into collection, your seven-year reporting period begins ticking the very day your payment was late. This is very good for consumers and lenders as well, because you can continue to make payments on your account without having to worry that every time you make that payment, your seven-year clock is reset. And the lenders like this approach because they can see the money owed them, later if not sooner.

It is essential that if you choose to settle, then you must make your lenders agree to delete negative listings from your credit report. More often, collection agencies are quicker to agree to delete the negative listing than banks or credit card companies. As well, some lenders have an agreement with the credit bureaus that they (the lenders) will not allow a derogatory listing to be deleted upon settlement.

In view of this, it is often the case that you have to fight a little harder with large credit card companies and banks to get them to do what you want before you will pay them - delete the negative listings on your credit report. If you push hard enough, and play smart enough, you can get them to cooperate, because no matter what their agreement, a lender can have the credit bureau change the information on your credit report. If a lender reports to the credit bureau, then he can easily change what he reports.

There are two options open to you if you proceed to settle your debt, in regard to getting a negative listing deleted by your lender, namely, "Pre-notification of Negative Credit Deletion", or "Post-notification of Negative Credit Deletion".

In the first instance, you tell your lender that you will need the deletion of the complete negative listing as part of the pay-off. You must get this agreement (to delete the listing and consider the debt fully settled) in writing and properly signed before you actually make the payment. This is always the best option. The lender might come back and ask for the full amount before he agrees to this. Your reply will be that he should take what he can get from you, as you are on the verge of bankruptcy. This is really his last chance to get money out of you.

If you take the "Post-notification" route, you will agree to pay the settled amount, and then wait for the lender to delete the negative listing. For your protection, you might a document drafted by your lawyer that states that if the check is cashed, the lender will immediately delete the derogatory listing in your credit file, now that the debt has been paid in full. The lender may simply send the check back to you, but more than likely, he will not let go of the money so soon, especially if he has been waiting for it for such a long time.

Another point to remember is that you should never take any action simply because you arrived at a verbal agreement with your lender. Get everything in writing, and duly signed. It is always difficult to fight a lender after you have paid him - since he has no more incentive to honor his part of the deal.

For those especially hard-nut lenders, who will never agree to deleting your negative listing, and if you cannot wait seven years, you can follow other alternatives.

Alternative #1: You may tell your lender that you will accept a listing as "Paid" rather than a complete deletion that you originally wanted. Since such a statement is a true state of your account, most lenders will agree to do this. But do be aware that a "Paid" account is still very derogatory, since your credit report will show: "Paid Charge-off" or "Paid repossession". Therefore, it is very important that you only agree to the fact that your account show "Paid" only, and that all derogatory notations such as "charge-off", "repossession", and "collection" be fully deleted. A simple "Paid" notation is a neutral indicator on your credit report, and will not stop you getting fresh credit.

Alternative #2: You may tell your lender that you will agree if he lists your account as "Settled", if he cannot delete it altogether. However, keep in mind that "Settled" is still a negative listing, but is it not as bad as "Paid Charge-off". Do not agree to this alternative, unless you have exhausted all other avenues of settlement. You should agree only if all other derogatory notations such as "charge-off", "repossession", "collection" are deleted, and "Settled" appears alone in your credit report. If not, then you must work very hard to have the remaining derogatory notations removed by disputing directly with the credit bureau itself.

Alternative #3: In some extreme cases, the lender may never agree to change the negative listings; he may insist on showing your account as "Paid Charge-off", or "Paid Collection", or "Paid was 30, 60, 90, or 120 days late". Such a listing is usually a lender's first offer. Make it your last choice. These notations are as damaging as when your debt was still unpaid. However, it is often the case that once you've paid, you can dispute the listings with the credit bureau, who may not be able to verify the listing with the lender, because he has been paid and has little reason to verify that your account retain the negative listing. Thus, if you absolutely cannot get your lenders to budge, you can go for this alternative, with the understanding that you will dispute the listing with the credit bureau at a later date and eventually have it removed.

In the dispute process, there will come a time when you will have to talk directly to your lenders, and dispute the information on your credit report with them, because they are the people ultimately responsible for what is on your credit file. You should talk to them sooner rather than later, especially if you are struggling with the credit bureaus and seeing few results.

Often, you can get negative listings deleted entirely, especially if you do not owe your lenders any money. These listings may be late payments or a few skipped payments. But even if you have serious outstanding debt, you should still talk to your lenders and explain your situation to them. It is always easier to come to an understanding with a lender - you just have to make sure you talk to the right person and that you say the right things.

When you do take up matters directly with the lender, phrase your dispute in such a way that it sounds like your negative listing was the result of an error or some extenuating circumstances. Better still, if you make it sound it was the lender's error in the first place, you will go far. Perhaps, you may have moved when the payment was due, and the lender's bill got lost in the shuffle, or in the mail. Or, during the time the bill was due, you or your wife may have been in hospital. Or, you had to be out of town during the time when the payment was due, and you were unable to look after it. It is often the case that if you give some kind of reason for late payments, lenders will usually give you the benefit of the doubt, and probably change your negative listing. You are still their customer, and without customers they have no business.

But it is up to you to gauge your lenders - you have to know how to handle them. Do you have to be nice and polite? Or do you have to be a snarling, angry consumer, demanding justice? You have to decide. However, politeness should always be your first approach - you can always snarl later.

When you do speak with someone at the lender's office, speak reasonably with that person, and explain your situation (how it was that your payments became delayed), and what you expect the lender to do (remove your negative listing). If your explanation is reasonable, it often happens that the first person you talk to has authority to remove the negative listing. If not, you will be directed to someone who has the authority to carry out this action. It is always good to be polite and professional on the phone. Always make a note of the name of the person you spoke with, and what was said. If this does not work, proceed to the next step.

Write a letter to the lender and ask copies of your credit account. Most lenders will readily give you this information. Following this example:

It is not likely that a lender will go hunting around in his archives, because it costs him time and money to dig around. Therefore, he will agree to your demands rather than poke around in his files.

If, however, your demand for documentation is ignored or denied, then you must ask more emphatically. Phone every day, and ask to speak with a person who has the authority to give you what you want - namely, deletion of your credit record, or full documentation of your file. But always be polite. Don't get someone's back up. Make "friends" with people, because they are the ones who can help you. Stick to being polite and professional, and you will see results.

If you succeed in getting full documentation, go over it with a fine-toothed comb. Compare what the lender has sent you with what the credit bureau has. You will always find some discrepancies between the two sets of records.

Now, you must latch onto some sort of "mistake" that the lender's office has made. Perhaps there is a contradiction between the credit bureau's records and the lender's, perhaps a document is missing, perhaps you were misinformed about a certain procedural matter by a representative at the lender's office. Whatever it is, latch on to it, and use it as a launching pad for your dispute. It is because of this "mistake" that the ensuing mishandling of your file occurred.

If you're still being stonewalled, and are having problems, you may want to file official complaints against the lender. But before you actually carry out this threat, tell the lender what it is that you're planning. Tell him, you will be filing complaints with various government bodies, if your dispute is not treated more seriously. Follow this example:

In your letter of complaint, you state the following:

During this entire time, keep calling, and keep talking to people at the lender's office. It will not be long before you start to see results with this kind of strategy.

If a lender finally agrees to delete a negative listing, ask him to please fax you a copy of the deletion letter. Keep it, because you may need it if the negative listing does not disappear from your credit report. Also, in case you are applying for a mortgage, such a deletion letter will be really helpful, because a lender will ignore a negative listing once he sees this letter, despite the fact that the negative listing is still showing on your credit report.

Most credit repair kits suggest that you submit a 100-word explanation statement to the credit bureau, explaining why it was that you went into debt and consequently ruined your credit. This statement is added to your credit file and sent to everyone who orders your credit report.

Honestly speaking, this strategy never really works. Just ask yourself: If you were a lender and you ordered a credit report on a prospective client, and the report was thoroughly negative, but had a 100-word explanation as to why that person has bad credit - would you be willing to give this person unsecured credit? Not very likely. In the same way, if you submit a 100-word explanation, it will do you more harm than good, because it will ultimately verify that your bad credit is not the result of bureaucratic mistakes or misunderstandings, but the result of your own mismanagement. This is not the message you want to give to your lenders. So stay away from this option. Rather spend your time and energy removing the negative listings entirely from your credit report.

Because we are dealing with a difficult and complex process, there will be times when you will face some formidable and challenging dilemmas. To deal with these problems, you must develop special techniques that allow you to overcome and win. Here are a few such situations for which you need to develop an effective strategy. Of course, the best way to handle these situations is dogged persistence. Do not give up. Keep at it, and you will see results.

Situation #1: If you have declared bankruptcy, then you must make sure that you first delete all the "Included In Bankruptcy" accounts from your credit report. This means contacting the various lenders and talking with them about deletion. You will have a tough time of it, but if you show persistence, you will succeed. Once you have cleared matters with each of the lenders that were included in the bankruptcy, then you must approach the credit bureau and request deletion. The reason you must first contact the lenders is that in the case of bankruptcies, the credit bureaus often check with one of the lenders included in the bankruptcy. This is why it is crucial that you clear everything with the lenders. Once they have agreed to your demands, they will not verify your bankruptcy once the credit bureau approaches them.

Situation #2: It not unusual to see duplicate entries of the same account on a credit report, where one entry is negative and the other positive. To get around this problem, you should challenge and dispute both the negative and positive entries. This will give your case more credibility, and make the credit bureau notice.

Situation #3: Try not to deal with the smaller, "pass-through" credit bureaus. They tend to be more interested in thorough investigations than the three main credit bureaus. If possible, try to get a street address in the jurisdiction of the three main credit bureaus. Perhaps you can use the address of a friend or relative. Once you have secured such an address, you need to send a verification of your "new" address to the credit bureau, usually a letter addressed to you at your "new" address. Send this proof of your new address to the credit bureau, and at the same time, file a forwarding order with the Post Office, requesting that all mail addressed to your "new" address be forwarded to your actual address.

Once the investigation is complete, you can cancel the forwarding order with the Post Office.

Situation #4: If your file is being investigated by a pass-through credit bureau, you may find that you'll get a letter asking for an investigation fee. This will likely happen if you live in the state of Florida. Do not reply to this letter of demand. Wait for about 3 months and try your dispute again. Or better still move your address (as described in Situation #3 above) to the jurisdiction of a main credit bureau, since the three main credit bureaus do not charge for investigating disputes.

Situation #5: According to the Fair Credit Reporting Act, a negative credit listing can stay on your credit report for seven years. In case of bankruptcy, unpaid judgments and liens, the derogatory information may stay for up to ten years. If your listing is seven years old, you need to watch your credit report carefully. Often credit bureaus will retain a bad credit listing for longer than seven years, because consumers fail to act and dispute the listing. You must take definite steps to dispute your credit report if it is still showing a seven year old listing.

We have covered a lot of ground in the previous pages, and it is now time to take stock of what it is that you have learned, in order to initiate positive credit repair action.

You have learned that it is possible for you to repair your credit, without the aid of credit repair companies. There may be rare occasions when you need professional help. That is the time to be careful. Research. Ask questions. Get references, and check them up. Only then will you find a reputable credit repair company. There are a lot of con-artists out there. Do not get burned. It is always best to use an attorney who specializes in credit repair; often bankruptcy lawyers also do credit repair. When dealing with any credit repair company always insist on giving a very minimum retainer fee. Just say that you will pay the balance after the company has done its job, namely, repair your credit.

There are several factors that will permit you to remove your negative credit listing. These include: Timing, account balances, creditors, accuracy, and employees with whom you deal.

A majority of the time, most negative listings are easily removed because they are near the seven-year mark.

Aside from the seven-year clock, you as a consumer also have access to the statute of limitations in your state for open-ended or open accounts.

An open account is a credit card loan for the majority of consumers. This statute has established the maximum number of years a lender has to sue you if you do not pay him the outstanding amount. It is not unusual to read of consumers busily paying off their collection and charge-off debts, because they appeared on their credit reports, or because a collection agency was keeping tabs on their credit report, and the minute it showed any activity, the collection agent shot out another letter asking for payment. In a majority of cases, there was no need to pay these debts because the statue of limitations had already expired.

The time-limit on the statue of limitation differs in each state. However, in most states the statute of limitations is restricted to 3 to 6 years for open accounts. Statutes on written contracts also expire in the same period.

Do bear in mind, however, that this statute does not make your debts vanish into thin air. Your lenders may still sue you. But you now have a defense. Whenever a lender sues you, you must prove to the court that the statute of limitations has already expired. This is your sure-fire defense.

In order to find when your statute of limitation took effect, simply examine your credit report for the last activity on your account. The date mentioned there is your original clock. This is your reference.

If you know for certain that the statute has expired, then you should immediately get in touch with your lender or collection agency and inform them of the fact. Write the following letter, and send it by certified mail:

If you send this letter, you will be prepared for all eventualities. Whenever a lender chooses to sue you, you can produce this letter as evidence, along with your credit report, which will very clearly state the date of last activity. Both these documents are your hard defense. This is why it is important that you send a certified letter, so the court can know that you did indeed send such a letter.

Another thing to keep in mind is that if you decide to pay the collector, you might still hear from the lender, who might inform you that the statute of limitation has been postponed because you made a deal with a collector. To counter this argument, make sure you fully understand where you stand if you pay the collection agency. Ask them to supply you with a letter from the lender which states that upon payment from you, the statute of limitation is still in effect.

As well, if you file bankruptcy, and at the same time the statute of limitations expires, then the lender automatically loses the right to make a claim in bankruptcy court. Again, the law will protect you fully.

One last point, if the lender made you sign a "promise to pay" note, you do have the right not to fulfill the "promise", even though the statute of limitation is still valid and in force.

Below is a state-by-state listing of the Statue of Limitations. Consult it to plan your approach.

If all your efforts have proven to be fruitless, and your derogatory entry is still on file, then it might be time to consider legal action against the collection agency or lender. It is best to get an attorney who has experience in this type of litigation.

As pointed out earlier, there is no real limit to the amount of punitive damages that you may seek. The array of punitive damages can range from psychological damage caused by a bad credit rating to job loss and denial of credit. If you can determine that the non-compliance was the result of negligence on the part of the credit bureau, then you may also wish to sue for actual damages, such as: Penalty fees, late payment fees, and any interest that may have accumulated.

The body that oversees that credit bureaus comply with the Fair Credit Reporting Act (FCRA) is the Federal Trade Commission (FTC). You should contact them immediately if you feel that your rights are being abused by a credit bureau. The FTC will then monitor your situation and determine the verity of the abuse. To file a case of abuse, you have to fill out a complaint form and file it with the FTC.

You may also want to consult the Code of Civil Procedures (available in most local libraries), and get in touch with the Attorney General of your State.

The basis of getting credit depend on various factors, which can be broken down into three types:

1. Collateral: The value of things you possess, and whether that value is comparable to the amount you are seeking to borrow.
2. Capacity: Determines if your budget can handle an extra loan, and if you are able to make an extra payment after you pay off all your monthly bills.
3. Responsibility: This is your track record as to how you have handled your previous financial commitments and debts.

These are the three things that lenders like to examine before they lend you any amount of funds. Usually, all of these three factors can be determined from your credit report - which is why it is important to have good credit. All lenders like to see that you are a good risk, because you are responsible with paying back what you owe, and that you are true to your signature.

Before you can begin to improve your credit, it is important that you understand what the sources of a good credit rating are. Here are the key essentials that you need to work on.

1. JOB: The longer you have worked, the better for you. And if you have been at your present for many, long years, lenders will see this as an indication that your earning potential is very stable, and that you can face long-term commitments.
2. CAR OWNERSHIP: Being a car owner will certainly be helpful, whether you own it outright or whether you have financed it. If you fully own your vehicle, then the lender will see this as one less debt in your favor. If you have financed it, then again it is a positive thing, because you have been deemed responsible enough to have been given the opportunity to get a car on a loan.
3. BANK ACCOUNTS: If you have a checking and savings account in your own name, it is a good sign of stability. Make sure that your checks never bounce, however. This will reflect badly on you. Control the money you have tightly.
4. TELEPHONE: A telephone number in your name is very essential, because it reflects your state of responsibility, and the fact that a lender can reach you at anytime.
5. FINANCIAL OBLIGATIONS: Limit the number of lenders you owe money to. The less the better.
6. HOME: If you have a home, make sure that you keep up the mortgage payments on a regular basis. If you own your home already, it will be good for your credit standing.
7. ADDRESS: If you have lived at one place for a very long time, the lender sees this as a sign of stability. If you have been changing places of residence, lenders will see you as a poor risk.

These are the essential items that you need to work on in order to get your credit back in good standing.

However, if despite your hard efforts, you still have a few blemishes remaining on your credit report, you can offset these negative items by piling on positive credit. You can have a good credit rating again with this method within one or two years, even though you declared bankruptcy.

It is estimated that 60% of Americans have negative or derogatory listings on their credit reports, and 10% have a bankruptcy on their credit files. But the world goes on, and there are strategies that you can deploy in order to get back into the game. You can still win in the long-run if you immediately take the bull by the horns and begin building positive credit. Follow the steps given below, and with time and persistence, you will again have a top credit rating.

STEP #1: If you have good credit with some lenders, and who are not shown on your credit report, you can easily have them added on to your file for a charge of about $2-$3 each. But do make sure to get clearance from these lenders themselves, to avoid future misunderstandings.

STEP #2: Get Gas station cards such as, Sunoco, Mobil, or Exxon. They are easy to obtain.

STEP #3: Get a savings and checking account. This is a big plus in your favor.

STEP #4: Have a relative co-sign a bank loan in the smallest amount you can get. To make things easier, give your relative the first few months of payments right away to show your good intentions. You do not have to repay this loan fast; rather what matters is that you are making consistent monthly payments.

STEP #5: You can borrow someone else's good credit for your benefit. Ask a relative or friend if they would be willing to sign you on their card as an authorized user. Make sure that your relative has good credit first of all. To make matters easier, when your credit card arrives, simply hand over the card to your relative, so he or she won't think that you're going to go on a wild spending spree and leave him or her in the lurch. This way you can piggy-back on someone else's good credit.

STEP #6: Make sure you hold down a steady job, so you can be seen as financially stable.

Step #7: Speed up the credit improvement process by following this simple, sure-fire method of credit rebuilding:

1. Go to the bank where you have your checking and savings account, and deposit $500.00 in your account. Then, after a week or so, go back to your bank and ask for a short-term loan (around 12 months) in the amount of $500.00 (the exact amount you deposited), which you will the bank as security.
2. The bank will gladly lend you money, anywhere from 70% to 100% of your security deposit. If they ask why you want to do this, be honest and tell them that you want to rebuild your credit. Lending money is regular business for the bank. They not doing this because they want to help you.
3. Your original deposit of $500.00 will continue to earn interest while it is being held as security.
4. Make sure to let the bank know that you want your payment history reported to the three credit bureau each month. Check up on this to make sure the bank is doing this.
5. Now take the loan amount given you and open a savings account in a second bank.
6. Follow steps A-E, and go to a third bank, and repeat the entire process. You should get 3-4 loans in this method.
7. Do not be in a hurry to pay off the loans. Just keep up the regular monthly payments. You will be surprised how quickly you fix your credit.

This really is the best way to manufacture excellent credit. However, you will be paying interest on the money you borrow, but it will be offset by the interest that your deposits will themselves earn.

STEP #8: Get VISA and MasterCard since these two cards are the best way to significantly improve your credit. The full details are given in the next Section, which completely familiarizes you with credit cards and how to use them for your benefit.

One of the best way to regain credit credibility is to get a VISA or MasterCard. You might think this is easier said than done, especially with bad credit. But there are countless many people with bad credit who still have the ease and convenience of credit cards. How is that possible, you ask? Before launching into the specific details as to how you can get a credit card, despite bad credit, it is important that you clearly understand the nature of the credit card industry, since a large part of our world now so readily runs on plastic.

Even if you have many negative listings on your credit report (and removing them all will take time, since it is a one-at-a-time process), you can still obtain a credit card, which will help you build good credit that can eventually outbalance your bad credit.

It was back in the 1950s that the first form of the credit card made its appearance. This was the Diners Club card, which allowed regular patrons of chic restaurants to dine and then pay for their dinners at a later date when their monthly bill arrived. From this "eat now, pay later" formula, the entire credit card industry began. In the beginning, credit cards were really "charge cards", which meant that you had to pay your entire, accumulated, monthly due amount at once - you could not carry a balance. Both American Express and Diners Club cards were such charge cards, until recently; now they too have joined the much larger credit market.

Nowadays, a credit card has come to function as a type of currency, and operates on the same principles as a line of credit that you can use to buy those things for which you normally would not have enough liquid cash. In an ordinary line of credit from a bank, you would physically need to get the cash out of the bank by way of a direct withdrawal or a written check. With a credit card, we are dealing with a more abstract concept, where the money you are spending is not physically your own, but rather the credit card is a symbol that your purchasing power is backed by the issuer of the credit card. In other words, you are able to make purchases on a credit card because of the worthiness of the issuer: A merchant knows that when he or she goes to deposit the VISA or MasterCard receipt into his or her business account, that receipt (which now functions as check) is never going to bounce. There is great confidence and assurance at work.

As a special line of credit, credit cards can be "spent" like real money, and once you pay off what you have spent, you can again spend the same amount, or more (depending on how high your card limit is). Therefore, a credit card is not only a one time line of credit, but it is a "revolving" line of credit that you can use over and over again, without restrictions, as long as you keep paying the monthly installments.

So, how do credit card companies make money by giving out revolving credit to people? Basically, in four ways.

1. They charge an interest on each individual revolving line of credit, which ranges from 2.9% to over 25%. If you cannot pay off the entire amount of purchases on your credit card with one lump sum payment, then the credit card company will start charging you interest on your remaining balance. Usually, your monthly payments cover both principle and interest payments. Because the risk to credit card companies (because they gave you a revolving line of credit merely on your credit-worthiness), they are justified in charging a higher rate of interest than you would normally get with a bank loan. But consumers understand that you have to pay for the convenience of a credit card. The interest rate is charged each day that you use the card, although the rate is shown as an annual one of, say, 12%. This means that if you make a $100.00 purchase, you will pay $12.00 on top, in a year, as interest. But normally the rate will be greater than the stated 12% because a small amount of interest is added to your balance each month. Therefore, your expenditure of $100.00 actually shows up as $101.00 on your bill after a month's time, and you pay interest on this amount. This is compounding interest, where the total amount payable reflects the accruing monthly interest. Some credit card companies accrue interest on a daily or weekly basis.
2. Credit card companies also make money by charging the individual merchant who uses their service (making purchases convenient for the consumer) a set fee per transaction. This fee ranges from 1% to 4% of the total receipt amount.
3. Advertising is another way credit card companies make money. All the many leaflets you get with your monthly bill are sure money-makers for them.
4. Lastly, credit card companies sell addresses to other merchandising firms that need to get new clients at large.

There are two types of credit cards currently on the market: Unsecured and secured.

Most credit cards are "unsecured" which means that the credit line granted to you is not connected to anything valuable (collateral). The credit company must reply on your worthiness to repay the debt you incur each month. If you decide to stop paying, there is very little that a credit card company do. It can either sue you, or try to garnish your wages, but it cannot seize your property. The only thing that they can do is ruin your credit by reporting you as a bad credit risk. And if you decide to declare bankruptcy, the credit card can never recover its money. This is one reason why credit cards can get away with charging a higher interest rate, because legitimately they are in a high risk situation.

The "secured" credit card is the direct opposite of the unsecured version in that it is guaranteed against a tangible collateral base (usually a secured deposit, from which you cannot withdraw funds). Typically, the credit card company holds an amount of money as security. In case you decide not to pay them, they can still recover the amount of the credit line granted to you. Often for secured credit cards the limit equals the amount of the deposit. Thus, if you deposit $500.00, you will get a credit card with $500.00 limit. This allows you to do things you normally could not without a credit card such as, rent a car, order from a catalog, do on-line shopping, or get a hotel room.

These types of credit cards function just like unsecured ones, and no merchant will ever know that you are using a secured VISA or MasterCard. There is no stigma attached to using such a card. So relax.

Sometimes, secured credit cards are given out at 2 or 3 times the amount of your deposit. It is worthwhile shopping around.

If you decide to get a secured credit card, you should be aware of the following facts:

1. Secured credit cards are an excellent way to rebuild your credit, or to add positive listings to your credit report.
2. Many secured cards charge annual fees. When you look for the right card for you, make sure you ask if they charge an annual fee and what that fee is.
3. Make sure you get the lowest interest available. Again, shop around.
4. Some secured credit cards can be changed into unsecured cards after a period in which you show responsible management of your debt.
5. There are some secured (and unsecured) cards that are very restrictive: They may be good only for shopping at a specific store or catalog, or they may ask for the first few months' payment up front. Stay away from these types of arrangements and cards. They will not benefit you in any way.

Each credit card company has a particular standard of acceptable risk, and it will do its own checks in order to determine how feasible it would be to give you a revolving line of credit.

Each credit card company uses its own particular formula in order to calculate this degree of risk. Even though these formulas tend to be guarded secrets, they all depend upon similar factors. These include the following:

• Credit history
• Income
• Current debt load
• The length of time at one job
• Ownership of property (especially a house)
• The number of years at the same address
• How many times credit has been applied for

Most of this information comes from credit reports, which is entered into a computer, in order to calculate your score and determine whether you meet the standard of acceptance. The score decides whether you are approved or rejected.

You might ask who determines your score? It is done by the Fair, Isaac Company, and their score is called FICO. This is a numerical score that uses some 45 different criteria from your credit profile in order to arrive at a score between 350 to 900. The higher the score, the better your credit-worthiness. The score was created in the 1980s, in conjunction with the three main credit bureaus; and the purpose of this score was to rank borrowers in accordance with their responsibility to repay their debts.

Since Fair, Isaac Company works closely with credit bureaus and lending institutes, it is important to know that the FICO score is and can be known by different names. Despite the difference in name, the procedure is always the same. Thus, Equifax calls it the Beacon Score, Experian calls it by its proper name (FICO), and TransUnion, for some reason, refers to it as the Experian Score

Remember also that a FICO score is not constant. You cannot have one score forever. It changes in order to reflect your current credit standing. Each time you apply for credit, your credit file is pulled out and the FICO model is used to evaluate your credit worthiness on that particular day. What you scored last year will not be relevant. Also, two different lenders will come up with a different score for you, depending on their own accepted standard of risk. Below is a list of items that will lower your FICO score. You should work on these items and try to improve them.

• Delinquency on accounts
• Amount owed too high on accounts
• Too many inquiries in the last 12 months
• Too few accounts paid as agreed
• Derogatory public record or collection
• Past due on accounts
• Serious delinquency
• Too few bank revolving accounts
• Too many bank revolving accounts
• Too many accounts with outstanding balances
• Account payment history too new to rate
• Too many accounts opened in the last 12 months
• Ratio of balances to credit limits is too high
• Amount owed on revolving credits is too high
• Length of revolving credit history is too short
• Lack of recent bank revolving account information
• No recent revolving balances
• Date of last inquiry too recent
• Ratio of loan balances to loan amounts is too high
• Lack of recent installment loan information
• No recent bank card balances
• Too few accounts with recent payment information

This general list will show that it is possible to increase your FICO score. Most credit agencies are happy if you score 650, which gives you an "A" credit rating. But if you get anything above 620 that still will rate you as "A". Anything below 620 involves higher risk for the lender, and will mean high-cost financing.

A good strategy is to work on improving your FICO score along with repairing your credit rating - the two really go hand-in-hand.

Here are some helpful techniques that will pull up your FICO score.

1. Work on getting negative listings removed from your credit report. The procedures for this you are already familiar with.
2. Make sure that you always pay your bills on time. Never pay a bill later than 28 days. If at all possible, pay your bills as soon as they arrive in the mail. Don't leave them lying around on the kitchen table, where they are soon misplaced and forgotten.
3. Pay off and close credit accounts that you do not need. Try to pay your higher interest accounts, and afterwards close them down. If, for example, you maxed out a card, then paid it off, and then closed the account - it would be a good FICO booster.
4. Keep all your credit card balances low as possible. Ideally they should be half the credit limit. High credit balances really gouge away at your FICO score.
5. Try to minimize the number of inquiries on your account. Too often we get unsolicited loan and credit offers. Each time you say "Yes", an Inquiry is added to your credit file, and you go down a notch on FICO. Do not apply for more than 2-3 credit cards; nail down the financing before you go car-shopping so you can avoid filling in many applications that may be turned down; even for a mortgage, choose the right institute first and then submit an application. Don't be in a rush.
6. Try to get as much positive credit as you can, as described above.

Below are some of the many credit card companies available to you. If you keep searching you will find more. The Internet is a good place to hunt around in. Start with the ones given below, and build from there. The list is divided between Secured and Unsecured credit card issuers.

From this list try to find the right bank for you, which means the one offering you the lowest financing charges. Never get a secured credit card from a third party. Always deal directly with the bank that is issuing the card. You do not need a middleman to help you. The other point to remember is that the more lenient a card, the higher will be the charges. Call the following banks and ask for a Secured Credit Card application.

UNSECURED CREDIT CARD ISSUERS:

These companies will issue you a credit card based solely on your credit rating. Call them and ask for a Credit Card application.

You have come a long way in repairing and restoring your credit. The way is hard and fraught with many difficulties, but you have overcome, and you are now on the road to financial well-being.

Along the way, you learned that the health of your credit is important to you so you can enjoy what other people take for granted: Renting a car, getting a hotel room, doing some shopping on the Internet. You can also begin to make some plans about your future: Getting that home, buying a car, maybe even setting up a business of your own. The success of all these plans depend upon your credit well-being. If your credit is sick, then so is your financial life, because our entire society revolves around the fact that we like to acquire those things for which we pay in small increments.

The key attitudes you honed during the entire process were patience and persistence. The process of rebuilding is long and arduous - but it is not impossible. And you never once thought of giving up. Financial troubles assail all of us. You are one of the fortunate ones who actually plan to correct and rectify these problems, and take a giant step forward to a brighter, happier, and healthier financial life.

This is a collection of important letters that you will need to write in order to initiate and follow through with the credit repair process. Although these were given in the body of the book, it seems like a good idea to give them a section all their own, so you can have a quick reference and guide readily available.

With each of these letters, you are free to personalize them as much, or as little, as possible. They are meant as examples or outlines for you to follow. If you do not wish to follow them down to the last detail, no harm done. Take what you need to get on with the job.

One last thing, make sure to sign each letter before you send it on. You will be surprised how many times people send a letter and never sign it. An unsigned letter is an unofficial document that no one takes seriously, and often times is instantly tossed in the garbage.

SAMPLE LETTER #1:

REQUESTING A COPY OF YOUR CREDIT REPORT

SAMPLE LETTER #2:
 
 

SAMPLE LETTER #3:
 
 

SAMPLE LETTER #4:
 
 

SECOND CHALLENGE OF A NEGATIVE ENTRY ON YOUR CREDIT REPORT

SAMPLE LETTER #5:
  

SAMPLE LETTER #6:
 
 

REQUEST TO LENDER TO UPDATE YOU CREDIT FILE AFTER PAYMENTS

SAMPLE LETTER #7:

DISPUTING A LISTING THAT BELONGS TO YOUR FORMER SPOUSE.

Sometimes, you may find that, in case of divorce, your former spouse still has access to your credit cards, or has obtained credit through misrepresentation as still being your current spouse. Take action to have this negative entry removed immediately from your credit file.
 
 

SAMPLE LETTER #8:

REMOVAL OF ENTRY BECAUSE OF FRAUDULENT USE OF YOUR SIGNATURE.

If you find that someone has got hold of your Social Security Number and is assuming your identity in order to obtain credit, you should inform the credit bureau immediately.
 

SAMPLE LETTER #9:

REQUEST TO DELETE OUT-DATED CREDIT ENTRIES.

At times, you may find negative listings on your credit report that should have been removed a long time ago (over 7 to 10 years old), but were retained by the credit bureau.
 

SAMPLE LETTER #10:

REQUEST LENDER TO REMOVE NEGATIVE LISTING AFTER PAYMENT OF DEBT.
 
 

SAMPLE LETTER #11:

REQUEST TO LENDER TO NEGOTIATE AND REMOVE YOUR BANKRUPTCY FROM YOUR CREDIT FILE.
 

SAMPLE LETTER #12:

ADDING ACCOUNTS NOT APPEARING ON YOUR CREDIT REPORT.

This letter will inform the credit bureau that you have other loans which are in good standing, and which you would like added to your file.
 
 

GLOSSARY OF TERMS AND DISPUTES

This list of alphabetically arranged terms that you will confront is given here for your reference, along with appropriate disputes that you can implement.

DISPUTE: "This was renegotiated and fully satisfied with the lender as agreed. Please reinvestigate and remove from my credit report, or you may change it to a positive rating."

DISPUTE: "This should be listed as a positive rating. Please reinvestigate this matter and change to a positive rating."

DISPUTE: "This account is in good standing as per agreement with lender. The account was never late as listed. Please investigate and change to a positive listing."

DISPUTE: "This account is in good standing as per agreement with lender. This account was never late as listed. Please investigate this matter and change to a positive listing."

DISPUTE: "This account is in good standing as per agreement with lender. The account was never late as listed. Please investigate and change to a positive listing."

DISPUTE: This account is in good standing as per agreement with lender. The account was never late as listed. Please investigate and change to a positive status."

DISPUTE: "This account is in good standing as per agreement with lender. This account was never late as listed. Please investigate and change to a positive notation."

DISPUTE: "This account is in good standing as per agreement with lender. This account was never late as listed. Please investigate and change to a positive notation."

DISPUTE: "This account was refinanced as a positive account and it should show a current positive notation. Please investigate this matter and remove this notation from my credit file."

DISPUTE: This account was paid and satisfied as per agreement with lender. This account never went into collections as listed here. Please investigate and remove from my credit report."

DISPUTE: This account is current and in good standing. Please investigate and change to a positive rating as soon as possible."

DISPUTE: "This was a change of location only. The account is now and has always been in good standing with the company. Please investigate this matter, and remove this negative notation from my credit report, or change it to a positive listing."

DISPUTE: "The company had no right to repossess. The property was returned after the error was found. The account was paid as per agreement with lender. Please investigate and remove the negative listing, or change it to a positive notation."

DISPUTE: "Payment arrangements were made with the lender. This account was never delinquent as noted. Please investigate and change to a positive rating."

DISPUTE: "Payment arrangements were made with the lender. This account was never delinquent as noted. Please investigate and change to a positive rating."

DISPUTE: "This account is in good standing as per agreement with lender. This account was never late as listed. Please investigate and change to a positive notation."

DISPUTE: "Payment arrangements were made with the lender. This account was never delinquent as noted. Please investigate and change to a positive rating."

DISPUTE: "Payment arrangements were made with the lender. This account was never delinquent as noted. Please investigate and change to a positive rating."

DISPUTE: "Payment arrangements were made with the lender. This account was never delinquent as noted. Please investigate and change to a positive rating."

DISPUTE: "Payment arrangements were made with the lender. This account was never delinquent as noted. Please investigate and change to a positive rating."

DISPUTE: "Payment arrangements were made with the lender. This account was never delinquent as noted. Please investigate and change to a positive rating."

DISPUTE: "This account was kept positive and should reflect a positive paid account with the lender. Please investigate this matter and change to a positive listing."

DISPUTE: "This account was in good standing prior to being closed by me. Please investigate this matter and change to a positive rating."

DISPUTE: "This statement is obviously inaccurate, as I am very much alive. Please investigate and remove this notation from my credit file."

DISPUTE: "This account is open and in good standing. Please change the status to a positive rating."

DISPUTE: "The lender made no effort to contact me. I have always forwarded updated information to the lender and the account has been kept in good standing. Please investigate and remove this notation from my credit file."

DISPUTE: "The lender never lost contact with me as noted. The account continues to be in good standing. I have always forwarded updated information to the company and I have never been late with my payments. Please investigate this matter, and remove this notation from my credit file."

DISPUTE: "This account was re-negotiated with the merchant, but the balance was paid by me. Please investigate this matter and remove this notation from my credit file."

DISPUTE: "This account was closed by me and should not be shown as a derogatory item. The credit line was closed because of poor service. The balance was always maintained current and is paid in full. Please investigate and remove this derogatory remark from my credit file."

DISPUTE: "This account is in good standing with the lender and was never in foreclosure proceedings as listed. Please investigate and remove this notation from my credit file."

DISPUTE: "This account is in good standing with the lender. This account never went into collections as listed. Please investigate, and remove this listing from my credit file, or change it to a positive status."

DISPUTE: "This account is in good standing with the lender. This account was never delinquent as noted. Please investigate, and remove this listing from my credit file, or change to a positive listing."

DISPUTE: "This account was never late as listed. Please investigate, and change to a positive notation."

DISPUTE: "This account was never late as listed. Please investigate, and change to a positive notation."

DISPUTE: "This account was never late as listed. Please investigate, and change to a positive notation."

DISPUTE: "This account was never late as listed. Please investigate, and change to a positive notation."

DISPUTE: "This account was never late as listed. Please investigate, and change to a positive notation."

DISPUTE: "This account was never late as listed. Please investigate, and change to a positive notation."

DISPUTE: "This account was never late as listed. Please investigate, and change to a positive notation."

DISPUTE: "This account was never late as listed. Please investigate, and change to a positive notation."

DISPUTE: "This account was never late as listed. Please investigate, and change to a positive notation."

DISPUTE: "This account was never late as listed. Please investigate, and change to a positive notation."

DISPUTE: "This account was never late as listed. Please investigate, and change to a positive notation."

DISPUTE: "This account was re-negotiated with the company and satisfied. Please investigate, and change to a positive notation."

DISPUTE: "This account was satisfied with the company and discharged. Please investigate, and change to a positive status."

DISPUTE: "This account was never a repossession. This account was fully satisfied as per the terms of the credit grantor. Please investigate and remove from my credit file."

DISPUTE: "This account was not a charge off. It has been, and is still, in good standing with the lender. Please investigate and delete this notation from my credit file, or change it to a positive status."

DISPUTE: "This listing is inaccurate and should be changed to a positive status. Please investigate this matter and change to a positive notation."

STATUS: "This account was paid and fully satisfied as per agreement with the lender. This account was never charged off as noted. Please investigate and delete from my credit file."

DISPUTE: "This account was paid and fully satisfied as per agreement with the lender. This account was never a collection account (insurance claim, government claim) as noted. Please investigate, and remove this notation from my credit file."

DISPUTE: "This account was negotiated and fully satisfied as per agreement with the lender. This account never went into foreclosure as noted. Please investigate, and remove from my credit record, or change to a positive notation."

DISPUTE: "This account was re-negotiated with the lender and fully satisfied. Please investigate, and change to a positive status."

DISPUTE: "This account was never a repossession. The account was fully satisfied with the lender. Please investigate, and change to a positive notation."

DISPUTE: "This account was never a voluntary surrender. The account was fully satisfied with the lender. Please investigate, and delete from my credit record."

DISPUTE: "This account was paid and fully satisfied as per agreement with the lender. Please investigate, and change to a positive listing."

DISPUTE: "This account was paid and fully satisfied as per agreement with the lender. Please investigate, and change to a positive listing."

DISPUTE: "This account was paid and fully satisfied as per agreement with the lender. Please investigate, and change to a positive listing."

DISPUTE: "This account was paid and fully satisfied as per agreement with the lender. Please investigate, and change to a positive listing."

DISPUTE: "This account was paid and fully satisfied as per agreement with the lender. Please investigate, and change to a positive listing."

DISPUTE: "This account was paid and fully satisfied as per agreement with the lender. Please investigate, and change to a positive listing."

DISPUTE: "This account was paid and fully satisfied as per agreement with the lender. Please investigate, and change to a positive listing."

DISPUTE: "This account was paid and fully satisfied as per agreement with the lender. Please investigate, and change to a positive listing."

DISPUTE: "This account was paid and fully satisfied as per agreement with the lender. Please investigate, and change to a positive listing."

DISPUTE: "This account was paid and fully satisfied as per agreement with the lender. Please investigate, and change to a positive listing."

DISPUTE: "This account was paid and fully satisfied as per agreement with the lender. Please investigate, and change to a positive listing."

DISPUTE: "This account was paid and fully satisfied as per agreement with the lender. This account was never charged off as noted here. Please investigate and change to a positive listing."

DISPUTE: "This account was fully satisfied as per agreement with the lender. This account should not be shown as a voluntary repossession. Please investigate and remove from my credit file."

This credit repair kit is designed to give you knowledge so you can take charge of your debt problems. The aim is to give you enough information that will allow you to take action and follow procedures in a meaningful and fruitful method. The approaches you are now familiar with shall definitely help you improve your credit rating, and teach you to deploy strategies that shall assist you in bolstering your credit record.

As you know already, personal credit repair is a work of extreme patience and persistence. Never give up, and you shall force results to happen. You have to take charge of your financial life, and a bad credit record does not have to mean financial ruin, or perpetual life on the peripheries of society. You can get back into the action. You can rebuild your credit. The strategies needed are relatively simple - but they do demand determination, diligence, tenacity and constancy.

You have all these qualities, and you have manifested them by taking positive steps to get out of the hole that life has thrown you into. This kit will have armed you fully, so you can charge ahead, and be once again a credit-worthy, financially stable individual.

USEFUL LINKS

BankRate.com