Jun 4, 2008

Legal Credit Repair vs. Illegal Credit Repair

When it comes to credit repair, the law is on your side. The laws created by the FTC on credit repair are to protect you from the credit reporting agencies, collection agencies and credit repair companies. Legal credit repair methods are not only smarter (because you won’t end up in jail), but they are also less expensive.

Most unlawful credit repair companies have been taken down by the FTC; however there are still some in operation. If you are would like to repair your credit, it’s important that you don’t get lured in by illegal tactics and fraudulent companies. If you follow illegal advice and commit fraud, you may be subject to prosecution. Below is a list of illegal credit repair techniques to look out for:

Illegal Credit Repair Tactics

  • Changing your social security number or starting a “new” credit file. Some companies will offer to teach you how to start a new credit file by applying for an Employer Identification Number to use instead of your Social Security number. Avoid and report such companies.

  • Companies that ask you to pay for credit repair services before they provide any services.

  • Companies that don’t tell you your legal rights and what you can do by yourself for free.

  • Remember, it is also illegal to try to obtain credit by lying or making false statements on an application.

Now that you know what to avoid, let’s look at some of the things you can do to repair your credit.

Legal Credit Repair Tactics

  • Dispute erroneous information on your credit report. Not only is it legal, it’s your federal right. The Fair Credit Reporting Act gives you the right to dispute items on your credit reports directly with the credit bureaus. The burden of proof is on the credit bureaus. If they can’t verify that information is correct, then it must be deleted.

  • Debt validation is a tactic that’s used when dealing with collection accounts. The FDCPA gives you the right to demand that collection agencies validate any debts that they are trying to collect on.

  • Negotiating directly with creditors is a tactic that is sometimes used to ask the creditors politely to remove the negative items from your credit report.

If you would like to have professionals repair your credit, check out the top legal credit repair services. If you prefer to do-it-yourself, the credit repair forums are a great place to start!

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Apr 21, 2008

Do-It-Yourself Credit Repair

Having bad credit in the US is a nightmare. There are do-it-yourself credit repair tips that can help to restore your credit rating to a level that you can be proud of. Our journeys through life sometimes lead us into difficult times. It is not very hard to get behind. Once that happens and your credit rating drops, it will take some time and effort to get it back up. Don’t let it get to you though, you can do it. Here are some do-it-yourself credit repair tips to help you along:

Tip #1: Know what you’re dealing with. If you want to restore your credit to a given level, you have to know where to start from. You are entitled to a free copy of your credit report once every year from each of the 3 major credit reporting agencies, but if you’re looking to do some credit repair, you should purchase them from each credit bureau separately.

Tip #2: Once you know what you are dealing with, you can begin your credit repair efforts. Do-it-yourself credit repair is all about having negative items removed or updated to a positive account. Even if the accounts are “really yours”, they must be removed if they are not verified within a reasonable amount of time – normally 30 to 45 days.

It’s important to go through your report and dispute negative items in the correct order. Your first letter should be disputing any contact information that is not current. In your second letter, you can start disputing the negative accounts. It’s not wise to dispute more than 5 accounts at the same time.

It’s up to the credit reporting agency to investigate the information at this point. They do so by contacting the originator of the negative complaint. If that individual or organization does not respond and verify the item in time, the law states that it is to be immediately stricken from your report. Additionally, there is a statute of limitations on almost all credit report items. They are automatically to fall off after a given time period. Check for them and inform the CRAs of any discrepancies.

Tip #3: You need to keep good records. You want to always be a thorn in the side of these reporting agencies. Clerical errors, human laziness, company mergers and bad record keeping are but a few of the reasons why your negative items may not be verified in a timely fashion. This is what you want to happen! Also, send in your dispute forms at the busiest times of the year like major holidays and the peak of tax season.

Tip #4: After you send in the dispute letters, go about your business and make sure that you are not creating any more negative issues concerning your credit. Make your payments on time – every time. After 30 days, the credit bureaus should have sent you another copy of your credit report. They don’t always do this. If not, you may need to call them or write them and request it. Go over it again and check to see if every dispute that you filed has either been removed or verified. The statistics say that around 40% will have disappeared. That’s great! Sometimes, it’s a lot higher.

Do-it-yourself credit repair is a simplistic endeavor. It only requires organization and a plan. With some attention to detail and patience, your do-it-yourself credit repair efforts will save you thousands of dollars as compared to hiring the services to be done for you. Your credit rating will be enhanced and your life will begin to flow smoother. When it comes to repairing your credit, do it yourself!

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Mar 6, 2008

How to Repair Your Credit

No matter how bad your credit situation is there are always steps you can take to make it better. Everyone’s situation is unique, so what might be the best thing for you right now, may not be the best thing for someone else.

To repair your bad credit, you must find a starting point. The best way to do that is to obtain a copy of your credit reports from the 3 major credit reporting agencies, also known as credit bureaus. You will also need to know what your credit scores are.

Once you have your reports, you’ll want to make sure all the information is accurate. There are mistakes in about 80% of all credit reports. If you find any accounts that you are unfamiliar with or are reporting incorrectly you should dispute them with the credit bureaus. Creditors are notorious for reporting erroneous information on your credit reports. So, even if it’s just a small error; that gives you the right to dispute it. It’s important to note that whether the account is actually yours or not makes no difference on their responsibility to verify it. If the account can’t be verified, it must be deleted.

The credit bureaus get thousands of disputes each day and many times they don’t do a very careful job of investigating items you’ve disputed. So, it may take a few rounds of letters until the credit bureaus remove the negative information. Be patient and wait at least 30-35 days before sending another round. Do not give up. It may seem like just one or two small errors that they are falsely reporting about you – no big deal, right? Wrong! Just one error can cause your credit scores to suffer immensely and could end up costing you thousands of dollars. This is very serious business. It’s extremely important to make sure everything on your credit reports is being reported correctly.

Another thing you should do is pay off the most recent past due accounts. Be careful making payments on older charged off accounts as paying them could possibly bring your scores down even further which means they can report the negative account for 7 more years. You will also want to try to get an agreement with the creditor to update it to “paid as agreed” or remove the account BEFORE you pay it. It’s much harder to get it updated or removed after you pay it because you don’t have much leverage.

Another important part of raising your credit scores is to keep your existing balances below 30-40% of your credit limit. You’ll also want to minimize the number of inquiries you make by not applying for credit unless you absolutely must. Use your inquiries wisely and sparingly, as applying for too much credit in a short amount of time can be very damaging to your credit scores.

Don’t have time to repair your credit? Let the professionals at Lexington Law Firm take care of it for you. They delete all kinds of negative credit including bankruptcies, foreclosures, repossessions, charge offs, judgments, tax liens, collections, and more.

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Dec 15, 2007

How to Raise Your Credit Scores

You can raise your credit scores by taking a close look at your credit reports and creating a plan of action to improve them. Most increases to your credit scores take place over time and require a continuing effort from you. The only quick-fixes of raising your credit scores are to pay down debt and to successfully dispute negative information on a credit report.

At the same time, you want to always pay your bills on time – that should be obvious. Late payments play a major role in driving down your credit scores. You will also want to keep your debt-to-credit-limit (or available credit) ratio as low as possible. Never let it get above 40%. If you don’t have many positive accounts reporting, you may want to open some new accounts to raise your debt to available. Try to get an unsecured credit card from your local credit union or a secured card from a legitimate site online.

Don’t close unused accounts, especially if they are old and reporting positive, because zero balances can help your score. Also, don’t open several new accounts in a short period, especially if your credit history is less than three years old. Too many inquiries in a short period of time can really be hurtful to your credit scores. Apply for credit wisely.

It should be mentioned though, that pulling your own credit does not harm your scores. In fact, many people think it’s wise to use a monthly credit monitoring service online to monitor your progress and make sure there are no unauthorized inquiries or new accounts showing up on your reports.

As mentioned, disputing negative accounts on your credit reports is an excellent way to raise your credit scores. All negative accounts on your credit report should be disputed to make sure they are accurate. If they are not, they must be removed. You don’t have to be dishonest when disputing accounts; the burden of proof is on the credit bureaus and the lenders. If you know that an account is yours, do not dispute it as “not mine”.

It’s their obligation by law to verify the account and show proof that every little thing they are reporting is 100% accurate. If it’s an old account and the lender no longer has the records to verify an account, guess what? It must be removed. Just remember to always be careful and honest when disputing. Unintended consequences happen quite frequently with credit bureaus. They know how to play the game and they are NOT happy about having to verify your accounts, so be smart about it or you will find yourself with even worse credit.

If you don’t have time to repair your credit, why not let the professionals at Lexington Law Firm take care of it for you? Lexington deletes all kinds of negative credit including bankruptcies, foreclosures, repossessions, charge offs, judgments, tax liens, collections, and more.

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