Did you know that you pay a higher interest rate on you car and mortgage with questionable credit? Were you aware that insurance companies can turn you down or put you in a higher risk category with higher premiums if they consider you a bad credit risk. More employers now run credit checks for potential job selection and promotions than ever before. The need to know your credit report and make sure that there are no errors in it is thus more important than ever before. Check Your Credit Report
Before you begin the battle, you must know the battlefield. Your struggle to restore your credit will be fought between the lines of your three credit reports. You are entitled to a free copy of your credit report within 60 days of a credit turn down if the report causing the decline was from Equifax or Trans-Union. Experian currently offers a free report within 30 days of turn down but also offers a free report annually. Of course, you are entitled to a copy at anytime from any of the three for a small fee ($2-$8). You should order all three as they are all used frequently by credit companies. When you first receive your Trans Union and Equifax credit reports, you will find them difficult to read. The information is coded in a way that is not immediately readable by the average consumer. Each credit report should arrive with a key which interprets the codes and indicators on the credit report. Sit down with the credit report and study it until you understand what each code means. You must monitor your credit report religiously to prevent the appearance of bad credit. Why can't you assume your report is correct? That answer and exactly what you should be looking for is what this article is all about. It's one thing to have bad credit, but it is another to have errors on your credit report through no fault of your own. The result, however, is the same-- unless you correct it. Who can access your credit report?
Basically anyone who can offer just cause and/or has access as a member of a credit reporting agency. That means landlords, utility companies, phone companies, hospitals, doctors, dentists, insurance companies, credit unions, finance companies, banks, retailers, department stores, credit card companies, car dealers, mortgagers, investigators, lawyers, courts, and more. Two strategies to eliminate debt:
1. Develop an Accelerator Margin
An "Accelerator Margin" is that portion of your income which you will temporarily set aside to pay extra on your bills in a very specific sequence. The amount can be more to make the payoff occur faster or less, but the payoff of course will be slower. Review your last six to eight months of expenses and list each entry which offers any hope of reduction (not bills, taxes, etc.). 2. Create a Debt Elimination Schedule
Divide the total payoff amount by the monthly payment for each of your bills. Assign a numeric sequence starting with 1 for the lowest division answer, 2 for the next lowest, etc. Each month make the normal monthly payment to each debt except debt one to which you also apply the Accelerator Margin from above. Repeat until debt one is paid. Pay the minimum monthly on all bills except debt two. With debt two, apply the minimum monthly + Accelerator Margin + former debt one payment. Continue until debt two is paid. | Disputing inaccurate credit reports
The dispute letter is the single most powerful weapon in your arsenal. The new FCRA requires the credit bureaus to handle your dispute with precision and reliability. However, the credit bureaus still have some loopholes to escape their responsibilities if you don't compose your dispute properly, including the determination that your dispute is technically "frivolous or irrelevant." After you've analyzed your reports and marked every negative listing, you may begin to draft your dispute letter. Do not use "form-type" dispute letters as they will be quickly spotted and rejected by the credit bureaus as "frivolous or irrelevant." Instead, follow these general strategies: Always indicate whether the disputed listing is being challenged as "not mine" or "not late." While you must never say that an account isn't yours or that you weren't late unless you believe that it is true, the credit bureau must know if you are disputing the existence of the listing or just the information within the listing. If you are unclear about the nature of your dispute, the credit bureau will promptly return your letter. Remember, the credit bureaus see all disputes as either "not mine" or "not late." Tell the credit bureau the desired outcome of the investigation. You must always state what you would like done with the listing. There are two options: delete the entire listing or erase the late pay notations within the listing. Provide a reason for your dispute. If you don't give some kind of explanation as to why you think the credit report is wrong, then the credit bureau may ignore your dispute. Never sound like an expert. The credit bureaus receive over 10,000 disputes per day. Your dispute should look like an average dispute. If you quote legal statute or if you remind the credit bureaus of your rights under law, they will probably determine that you read a book about credit repair or you are using a credit repair company. If the credit bureau believes that you are attempting to systematically restore your credit, your dispute will be tossed into the "frivolous or irrelevant" bin.
Patience and follow-through are the keys to this process. Sending one dispute right after another is wasteful and counterproductive. You should send no more than one dispute every ninety days. If you dispute more often, the credit bureau will simply return the dispute as "frivolous or irrelevant." Disputing reports with creditors
Under the new FCRA, the creditor is now responsible to adhere to proper procedure in verifying consumer disputes. You should take your challenge to the creditor by writing letters directly to that creditor. If you still owe money on the credit item in question, you may use a powerful negotiation tactic known as "debt settlement" to reduce your payoff AND to accomplish the removal of the negative listing. Debt Settlement requires negotiation and is usually best performed by an attorney. |
