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Understanding, Repairing,
and Managing your Credit Scores**
In the modern era, good credit
is as essential to daily survival as water and oxygen. Good
credit is a luxury and a necessity, whether you are trying to
get a credit card, an auto loan, rent an apartment, find
economical insurance, or sometimes even apply for a job; your
credit may dictate the outcome. In no transaction is this more
of an axiom than when you apply for a real estate mortgage.
Credit has a direct effect on your ability to secure affordable
interest rates and also determines the percentage of the
purchase price that will be required for a down payment. Your
credit score can make the difference between a loan approval and
a loan denial. Whether you’ve just received a social security
number 6 months ago or you’re Donald Trump; lenders will review
your credit history in detail. Let’s take a look at some of the
basics:
A Tale of 3 Bureaus
There are 3 major credit bureaus: Experian, Equifax and Trans
Union. They are essentially nothing more than large computer
systems that store the credit histories of hundreds of millions
of people. Every time you apply for some form of credit, your
file is requested from one or more of these credit bureaus.
They’re record keepers, paid by the people that request your
credit file.
As you may have guessed, your credit file is basically a record
of your financial history. Your credit report may also contain
your current and past employment information, phone numbers,
aliases, maiden names, former addresses, any lawsuits, arrests,
bankruptcies, IRS judgments or tax liens filed against you in
the public record.
A few quick facts about credit & credit reporting:
There are over one billion credit reports issued annually:
Outstanding credit totals 1.7 trillion:
Negative information may be reported for up to 7 years:
Bankruptcy information can be reported for 10 years:
Information reported because of a job application with a
salary of $75,000 or more has no time limitation:
Information concerning a lawsuit or judgment against you can
be reported for 7 years or until the statute of limitations runs
out, whichever is longer:
Default information concerning U.S. Government insured or
guaranteed student loans can be reported for 7 years after
certain guarantor actions.
On average every U.S. household owns a car and 1/3 have a
second car:
The average American has 8 credit cards or loans
2/3rds of the U.S. economy is driven by consumer spending:
These agencies are not controlled or run by the Government, not
the FBI or the CIA or even the PTA. They are privately or
publicly owned corporations that maintain credit records. You
have nothing to fear in dealing with them. They’re vast stores
of information, maintained and controlled by thousands of
everyday employees. If you choose to dispute an account with a
Credit Reporting Agency, the Secret Police are not going to take
you away in the middle of the night. Here are a few general
facts about each bureau that might help to dispel some of the
mystique:
Equifax, P.O. Box 740241, Atlanta, GA 30374-0241; (800) 685-1111
www.equifax.com
A publicly traded stock on the NYSE: EFX
In existence for 104 years:
Employs 4800 people:
$1 billion in annual revenue
Experian, P.O. Box 2002, Allen, TX 75013; (888) 397-3742
www.experian.com
Global based business:
Employs 13,000 people:
Maintains a database of 205 million consumers:
$1.9 billion in annual revenue
Trans Union, P.O. Box 1000, Chester, PA 19022; (800) 888-4213
www.transunion.com
Founded in 1968:
Employs 3600 people:
Has originated many industry wide innovations:
Dedicated to protecting consumers from credit fraud
Credit Scoring Basics
When your credit file is requested, along with your credit
history, come your credit scores. Each bureau has its own unique
scoring model based on the information that has been reported to
them by your creditors. A scoring model is essentially a
mathematical engine that adds or subtracts value based upon your
own particular historical credit trends compared to others with
similar type credit histories. The scoring model also factors in
the likelihood of an individual to repay a debt. If you have a
habit of entering into credit agreements and not paying your
monthly obligation in a manner in accordance with the mutually
agreed upon terms, you will score lower than others will in your
statistical grouping.
You may already be familiar with the term “FICO” score, a common
trade reference that stands for Fair-Isaacs Company, the company
who developed the scoring model that is utilized today. It is
believed that the Fair-Isaacs Company provides some of the
scoring information and the bureaus in turn tailor it, arriving
at a numerical score that can range anywhere from 400 to 800 or
higher. Any score in the 400’s being the worst and anything over
720 being the best. It is also possible that if your credit is
really bad, or there is a lack of credit information on you,
there won’t be a score. Furthermore, your credit score can
change on a daily basis, as your creditors constantly update the
information. Credit scores are also given to fluctuations.
A few things that can hurt your score:
Any payment that is 30 days or more late. A mortgage late is
the most serious. If you must be late, it’s better to be late on
a credit card than a mortgage. A mortgage late can severely hurt
your chances of getting good rates on refinancing in the near
future:
A late payment on any credit card that is over 50% of its
available balance, especially if you have more than one card
that is over 50% of its available balance. Nothing can lower
your scores faster than late payments on your credit cards when
they are nearly at their limit:
Collection accounts. If you owe the gas company $250 bucks,
it’s sometimes better to pay it off than let that collection
account fester in your credit file. Even if you otherwise have
perfect credit:
Multiple inquiries: Don’t apply for a car, mortgage, and a
credit card all in the same week. If you are constantly hungry
for additional credit lines, this may viewed as a liability.
Shopping for a good interest rate on a car loan is fine as long
as you confine all the inquiries to within a thirty-day period;
the credit bureau will view them as one inquiry. They cannot
penalize you for shopping around. But try not to shop for
additional credit lines at the same time:
Length of credit history: An insufficient credit history may
effect your scores adversely, but may be offset by other
compensating factors such as making your payments on time and
maintaining low balances.
It is imperative that you know what is on your credit report and
there are several ways you can go about doing so. You may obtain
a copy of your credit report for free thanks to a recent
amendment to the Fair Credit Reporting Act requiring each of the
nationwide consumer reporting bureaus to provide you with a free
copy of your credit file, at your request, once every twelve
months. The three bureaus have set up one central website, toll
free number and mailing address through which you can order your
free report. The web address is
www.annualcreditreport.com or call 877-322-8228. You may
also print the annual credit request form at
www.ftc.gov/credit and
mail it to:
Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281
You will be required to provide your name, address, Social
Security number and date of birth. If you have moved in the last
two years you may have to provide your previous address. You may
also be required to provide information that only you would
know, such as your monthly mortgage payment. This is for your
protection and not meant to be a hassle.
If you get an email or see a pop-up ad claiming it’s from
www.annualcreditreport.com or any of the three national
credit bureaus, do not click on the link or respond to the
message – it is probably a scam. You must also be wary of using
any one of the so-called “FREE” credit report companies you see
cropping up on the net these days, because under no
circumstances do you want any “inquiries” to show up on your
report, or give the appearance that you’re seeking a loan.
Secondly, under no circumstances should you trust one of these
services with your valuable credit information! They may use the
guise of offering a free report to try and sell you their
“repair services” and a host of other products. They may even
turn around and sell the information they obtain to another
“credit” company that will spam you to death or keep
telemarketing you until you change your phone number.
You may obtain a free report if you've been denied credit,
insurance, or employment because of information supplied by any
Credit Reporting Agency, under law; the company you applied to
must give you the bureau’s name, address, and telephone number.
If you contact the bureau within 60 days of a denial notice and
ask for a copy of your report, the report is free. In addition,
you're entitled to one free copy of your report a year if you
certify in writing that (1) you're unemployed and plan to look
for a job within 60 days, (2) you're on welfare, or (3) your
report is inaccurate because of fraud.
It is recommended that you review your credit report file for
accuracy and completeness. Especially if you have had any past
credit problems or for example; you are divorced and uncertain
what accounts are exactly on your credit report. Though the
credit information provided for free by
www.annualcreditreport.com will not have any score, it’s a
good place to begin.
If you feel you need a report containing your “FICO” score, you
may purchase one directly from each of the three bureaus. Make
sure and specify that you wish to obtain your “FICO” score, as
there are many types of scoring models and you may receive a
score from a model that does not score you on criteria that many
mortgage lenders and credit lenders use. Each bureau may charge
around $9.50 for this type of report but it may be very well
worth it. Be sure to ask for an information key that will help
you to understand how to read your credit report.
Equifax, P.O. Box 740241, Atlanta, GA 30374-0241; (800)
685-1111
Experian, P.O. Box 2002, Allen, TX 75013; (888) 397-3742
Trans Union, P.O. Box 1000, Chester, PA 19022; (800) 888-4213
Reading and reviewing the contents of your credit report:
Carefully and thoroughly review the contents of your credit
file. Make special note of any account that you don’t recognize,
or any creditor whose name you’re not familiar with. Never
assume that these accounts are accurate, ever more so if you are
Joe Sr. or a Joe Jr., or Joe the III, or even a John Smith.
You’d be surprised at how often erroneous information winds up
on your report, especially if you share a name with a parent or
a cousin who lives in the same town.
Also of importance are any accounts, such as paid collection
accounts, that are still showing an outstanding balance due. If
you have paid off a collection account or made amends on an
overdue bill or credit card, this “paid” status must be
reflected accurately on your credit report. Under the Fair and
Accurate Credit Reporting Act, or FACT Act, your creditors are
required to update your credit information fairly and
accurately. The FACT Act was enabled as a result of far too many
creditors who would receive payment in full on a “charged off”
or seriously delinquent account and never bother to update the
consumer’s credit report. Essentially, you are looking for
anything that is not correct. Do not assume the credit bureau is
policing these accounts for accuracy. They don’t. Remember: the
credit reporting agencies are simply vast databanks of
information.
What to do if you do find an error on you report:
It is sometimes useless to attempt to dispute an item with a
creditor who is responsible for reporting a damaging item to one
or more of the credit bureaus. The slow moving wheels of your
creditor’s bureaucracy could reduce the most level headed person
to heated, frustrated phone calls and bitter complaints. After
multiple attempts, only will you soon discover, no matter what
the customer service rep says on the other end of the phone
line, and no matter how many times you call; nothing will get
done to correct the error.
Fortunately, there are laws in place to protect consumers
against erroneous or error laden reporting. You can dispute
anything in your credit report, at any time, directly with the
credit bureau that is responsible for filing the disputed
account. Best of all: it will cost you not one red cent.
Under the Fair Credit Reporting Act, the credit bureaus are
required to investigate any disputed account within a 30-day
period. The creditor must substantiate to the credit bureau any
claims that they make in your credit file.
If your creditor cannot substantiate the information it has
reported, than the credit bureau must delete the account from
your credit report. If an account is disputed and the reporting
agency investigates the account and the creditor does not bother
to respond within 30 days with proof of their admonition, the
account must be deleted.
Under the Fair Credit Reporting Act:
You can challenge the accuracy of anything in your report at
anytime:
The credit bureau must investigate within 30 days:
If they find that the disputed item is in error they must
correct or delete the item:
If they cannot verify the disputed item within 30 days, they
must delete the item:
If the creditor verifies the item as correct, you still have
the right to submit a consumer statement that will
be included in your credit file.
Important To Remember:
Some of the information in your credit report could be way
out of whack. Don’t assume the credit bureau is policing these
accounts for accuracy. They don’t. They are record keepers and
nothing else.
Especially make note of which of the 3 credit bureaus that the
“bad” accounts are reporting to, for those are the bureaus that
you will be appealing to for an investigation.
Keep in mind that virtually everything and anything in your
credit file is disputable. Any questionable late payments, any
collection accounts, any charge-offs, even a past bankruptcy.
You may file a dispute with the reporting bureau, and there is
still a good chance it may be removed from your account!
Whatever you do, do not call the creditor or collection agency
directly! They will do nothing for you no matter what they
promise you. No matter what the customer service rep says on the
other end of the phone line, nothing will be corrected in your
credit account. The customer service Rep does not have the power
to fix any erroneous data that is being reported to the credit
bureau.
How to dispute an item in your credit report:
The best way to dispute an item in your credit report is to
write to each of the credit bureaus to which the disputed item
is being reported. In your letter you must state clearly the
item(s) you are disputing. It is not necessarily better to use
dispute forms or file numbers provided by the credit bureau, as
these forms are notoriously vague and have been known to
occasionally create delays.
Once you have a copy of your credit report, you’ll want to
include a copy of the first page of the report that contains
your identifying information as well as a copy of the page from
your credit report with the item circled, so there may be no
mistaking it. You must also include your current address (if
you’ve been at your current address for less than two years
please include your previous address), your social security
number, and a copy of your driver’s license. Here’s a sample
letter:
Important: You must write separate dispute letters for
each of the 3 credit bureaus. You do not want to write a blanket
dispute letter. The investigators who handle such disputes might
find this suspicious, not to mention the fact that you
definitely do not want to supply them with any more information
than is necessary. Carefully review your credit report for each
of the 3 bureaus, treating them as 3 completely separate
entities. When writing your letters only refer to the items
being reported to that specific individual credit bureau.
Note: Don’t be afraid to get “creative” and definitely
include any supporting documentation that may better confirm
your argument.
Date
Your Name
Social Security Number
Your Current Address
Your City, State, Zip Code
Previous address (if applicable)
Complaint Department
Name of Credit Reporting Agency
Address
City, State, Zip Code
Dear Sir or Madame:
I am writing to dispute the following information in my file.
The items I dispute are also encircled on the attached copy of
the report I received. (Identify item(s) disputed by name of
source, such as creditors or tax court, and identify type of
item, such as credit account, judgment, etc.)
This item is (Inaccurate or incomplete) because (describe what
is inaccurate or incomplete and why). I am requesting that the
item be deleted (or request another specific change) to correct
the information.
Enclosed are copies of (use this sentence if applicable and
describe any enclosed documentation, payment records, court
documents) supporting my position. Please reinvestigate this
(these) matter(s) and (delete or correct) the disputed item as
soon as possible.
Sincerely,
Your name
Enclosures: (List what you are enclosing.)
Do not use letterhead. Keep it simple. Low key. Send your
dispute letter during busy times of the year, such as Christmas.
The debtor and Credit Reporting Agencies are usually short
staffed around vacation time and they may not be able to respond
to you complaint in time. This is a great advantage.
Remember: If they don’t respond within 30 days of the receipt of
your letter then THEY MUST DELETE THE DISPUTED ITEM.
Important: It is not necessary to send your dispute
letter certified mail. Ordinary U.S. Postal is acceptable. Also,
you may want to keep an accurate log of when you sent the
dispute letters, as this may be very helpful. If you don’t
receive a response after 37 days then send a certified letter
with return receipt demanding an updated credit report with the
disputed items deleted. If a credit bureau that does not respond
in a timely manner (i.e. 30 days), it may indicate that the item
was inaccurate or could not be verified. In any regard, under
the Fair Credit Reporting Act, the disputed items must be
deleted.
More often than not, the bureau will respond saying that it has
verified the account as being accurate, when all they have done
is verify the account in their own computers: this is not
acceptable. It is important that they provide verification from
the actual creditor. Many large creditors and credit card
companies will use a third party to update and maintain their
large database of credit information. In our technological era,
your information may be reduced to digital blips and bits of
software driven, automated programming.
You must insist that the creditor verify the item. If your
creditors don’t respond to the credit bureau’s requests to
verify the disputed items, then the items must be deleted. Your
creditors simply do not have the staffing or the time to verify
every disputed account; this may work to your advantage. Many
times once an investigator begins to update your credit account,
you may notice older, outdated items are removed from your
report, even if it is a charge off, or collection account. If
the account is not being maintained to the standards of the FACT
Act, it must be deleted.
Sometimes even when you successfully dispute an item on your
credit report, and the credit bureau agrees to delete the item,
the item may reappear on your credit report a month or two down
the road. This is not supposed to happen.
The FACT Act was created to hold creditors and the credit
bureaus more responsible for updating and accurately reporting
the information in your credit report. Contact the credit bureau
immediately if an updated or deleted account does reappear.
If the problem persists, you may also contact the Federal Trade
Commission at 1-877-FTC-HELP (1-877-382-4357) TTY:
1-866-653-4261 or visit their web site at
www.ftc.gov. The FTC works for
the consumer to prevent fraudulent, unfair and deceptive
business practices in the marketplace and to provide information
to help consumers identify, stop and avoid them.
Remember: If at first you don’t succeed try, try again.
There is no limit on how often you may dispute an item if at
first you don’t succeed. You must insist and you must be
persistent. Chances are you’re first round of dispute letters
will not succeed. This must serve only as an indicator you must
be ever more vigilant. Be cordial, yet insistent that they
remove the disputed item and keep doubling your efforts until
you see results. They must investigate each and every disputed
item and they must delete the account if the creditor cannot
provide verifiable proof.
Credit Repair Services:
You may see their advertisements on TV, in newspapers and on
the Internet. You hear them on the Radio, or get a flier in the
mail. They all make similar claims:
“Credit problems? No problem!”
“We can erase your bad credit 100% guaranteed!”
“Create a new credit identity – legally!”
“We can remove bankruptcies, judgments, liens and bad loans
from your credit file forever!”
Many of these “fly by night” agencies promise to help consumers
with poor credit histories. They promise, for a substantial fee,
to clean up your credit report so that you can once again apply
for a mortgage, or a car loan, or get that new spangled cell
phone. These companies cannot deliver. Many of them simply do
nothing to improve your credit, after weeks of promises, and one
day they simply fold up and vanish with all of your money. Or
worse, many of these schemes are doing nothing more than
offering you Bankruptcy.
Beware of:
Companies who want you to pay before any service has been
provided.
Do not explain to you your legal rights and what you can do
yourself for FREE!
Recommend that you not contact a credit bureau directly.
Suggest that you try inventing a “new” credit identity by
applying for an Employee Identification Number to use instead of
your Social Security number.
Advise you in any manner of conduct that may be fraudulent, as
you may be subject to prosecution.
It is a federal crime to provide false information or make false
statements on a loan for credit application, to misrepresent
your Social Security Number, and to obtain an Employee
Identification Number from the IRS under false pretenses.
Furthermore, under the Credit Repair and Organizations Act,
credit repair companies cannot require you to pay for anything
until they have provided the agreed upon services.
The Credit Repair Organizations Act:
If you still feel as though you need to consult with one of
these Credit Repair Services, know your rights! By law, credit
repair organizations are required to give you a copy of the
“Consumer Credit File Rights Under State and Federal Law” before
any contractual agreement is signed. They must also give you a
written contract that spells out your rights and obligations.
For example, a credit repair company cannot:
Make false claims about their services.
Charge you until they have completed the promised services.
Perform any services until you have signed the contract and
have completed the three-day waiting period, during which time
you may cancel the contract without paying any fees.
The contract must specify:
The payment terms for services, including their total cost.
A detailed description of the services to be performed.
How long it will take to achieve results.
Any guarantees they offer.
The Company’s name and business address.
Most states have very strict laws governing credit repair
companies. If you have had a problem with any credit repair
company, report it immediately! Laws are in place to protect
you. Contact your local consumer affairs office or call your
state Attorney General’s office: many AG’s offices have toll
free consumer hotlines. Check your local listings.
Non-Profit Consumer Credit Counseling:
Many non-profit counseling services are reputable, licensed and
may be monitored by state and federal agencies. The best place
to find one of these services if you feel as though you’re
unable to re-negotiate with your creditors or you feel
uncomfortable budgeting your own money is by calling your local
consumer affairs office or by calling the Federal Trade
Commission (1-877-FTC-HELP) for a referral. But before you take
this measure here are some facts you should know:
Once you are in Credit Counseling, many lenders will not
extend credit or refinance your existing loans.
You may be turned down by a potential lender or unable to open
any new accounts while in Credit Counseling.
A notation is made on your credit report and many mortgage,
auto and credit card lenders at some future point might penalize
you for having formerly been in Credit Counseling.
While Credit Counseling may be able to re-negotiate with your
creditors to reduce your payments, many lenders will still
report you as being late for not making a full payment, there-by
wrecking your credit scores. Even if you’ve had a perfect
payment history up until that point.
Many consumers who enter Credit Counseling are not informed of
all the facts. Credit Counseling can limit your ability to get
credit and hurt your credit scores. Not every lender is willing
to accept a partial payment without reporting you late. If you
decide that you can’t go it alone and need the help of one of
these Non-profit agencies, make sure you question them
thoroughly to insure you are aware of which lenders shall be
reporting you as having late payments.
Ultimately, you might find it easier to re-negotiate with your
creditors without the help of one of these services. It might
take a little discipline and some serious phone time but in the
end you might be able to work it out so that you can make
partial payments for a couple of months and they won’t report
you late. And the words “Credit Counseling” won’t appear on your
credit report.
The best solution is to consolidate these debts. If you own a
home, you might consider taking out a home equity line or a
second mortgage. In most cases this would drastically reduce
your payments and have a rejuvenating effect on your credit
scores. Some companies may also offer you an unsecured debt
consolidation loan, but be careful. It is better to have your
debts spread over 5 credit cards using up 40% of their high
credit limit than it is to have one credit card that’s 100%
maxed out. Unfortunately, lines of credit and credit cards
having reached their upper limits are viewed as negatives that
hurt your credit scores.
Managing your credit:
Be responsible about paying your credit debts. Sounds easy
doesn’t it? But it’s all too easy to rack up thousands in credit
lines. We live in a consumer driven environment. Try not to
charge more on your credit cards than you are able to pay off in
a 30-day period and think very carefully before you go out and
sign that lease $1200 a month Mercedes payment. Yes, you’ll be
irresistible in the Benz, but you’ll look like an ass when they
come to repossess it.
If you need a quick credit fix, pay down as much debt as
possible and then ask for a credit limit increase. This will do
wonders for your credit scores. Think low debt liabilities and
timely payments.
Check your credit periodically and dispute any items that are
erroneous or inaccurate items immediately. The last thing you
want is an erroneous collection account or a faulty late
mortgage payment to drag your scores down. The longer these
items fester, the worse it gets and the harder they are to
correct or remove.
Try to keep the ration of debt to available credit limit to
around 50%. As soon as you go over 50% of your available credit
limit it may be viewed as a liability and could lower your
credit scores. A good idea may be to make credit payments before
they are due and before that balance increase hits your credit
file next month, that way you’ll always show a lower balance.
Limit the number of inquiries into your credit report. Saving
20% on that ‘back to school’ purchase by applying for a Gap card
might seem like a great idea but another inquiry this month into
your credit file might cost you in the long run. Don’t credit
line piggy. Think it through.
If you have no debt and have had no real credit history in the
last 2 years, you’d better go out and get some! If you plan on
purchasing a home, you’ll need to have a few open trade lines
with an established history.
If you have a spouse or partner with good credit, ask them if
they would be willing to add you to their credit line. There is
nothing more effective than establishing some positive credit to
counter balance the bad and rejuvenate your credit scores.
If you’ve had a bankruptcy and have resigned to complacency
regarding your credit, you’re making a big mistake. You need to
start updating and disputing your credit report as soon as
possible. This will make it a lot easier for you to re-establish
your credit, which you will also need to do if you have any
hopes of having any sort of credit ever again. Positive credit
counterbalances the bad credit.
If you’re in over your head:
It’s nothing to be ashamed of. Many people suffer from bad
credit and multiple collection accounts for a variety of
reasons, some of which may be beyond their control. Divorce,
sudden unemployment, lack of medical coverage, and mismanagement
of finances can happen to the best of us. But know that you have
rights and you have options and its far better to take a
pro-active approach than it is to wait until your creditors
start serving you with civil lawsuits and obtaining judgments
against you. Try your best to be responsive and cooperative in
your negotiations, but firm. Many of them will accept any
reasonable offer to establish a payment plan. Try and bargain
from a position of strength by reminding them that they’ll get
nothing if you decide to file for Chapter 7 Bankruptcy.
Know your rights:
Debt collectors must stop contacting you if you ask them to in
writing.
Debt collectors may contact you only between 8am and 9pm.
Debt collectors may not contact you at work if they know your
employer disapproves.
Debt collectors may not harass, oppress, or abuse you.
Debt collectors may not lie when collecting debts, such as
falsely implying that you have committed a crime.
Debt collectors must identify themselves to you on the phone.
The Fair Debt Collection Practices Act (FDCPA) applies to
personal, family and household debts. This includes money owed
for the purchase of a car, for medical care or for charge
accounts. The FDCPA prohibits debt collectors from engaging in
unfair, deceptive or abusive practices while collecting these
debts. You have the right to be treated fairly by these debt
collectors.
Here’s a couple of additional techniques you might want to try:
Auditing: Even if the
credit bureau was able to verify the disputed account as
correct, you may still be able to have it removed. You’ll need
to contact the creditor who is reporting the information; their
phone number and address is usually listed at the back of your
credit file. Call the creditor and ask them for to mail you
proof and documentation the account is actually your account, as
you do not believe the account is actually yours.
Almost all creditors and collection agencies use computers to
store information about debtors and they throw away the original
documents and contract signed by you. This makes it easier for
the creditor to store information, but makes it impossible for
them to prove the account is yours and not a mistake.
Federal Law states that upon request, your creditor must provide
you with written proof that the account in question is actually
yours. Written proof is a copy of the contract you signed with
the original creditor.
If they cannot provide you with written proof that the account
is yours, Federal Law states that they must remove the account
from your credit file and cease and desist all collection
activity.
Contact the Attorney Generals Office in the city where the
creditor who is damaging your credit is located. Tell the
Attorney General’s office that there is a creditor who is
damaging your credit by reporting an account that is not yours.
The AG’s Office will contact the creditor and have the account
removed from your file. For free!
Small Claims Court: Another option is to take the
creditor to Small Claims Court. Call your local small claims
court and ask the clerk how you would go about doing this. It
varies from state to state, and is generally very easy to do and
you can do it all yourself. You’ll have to fill out the
appropriate paperwork and file it with the court but it’s a very
simple procedure. You may to state that you wish to have the
item removed from your credit file since it is not yours and the
creditor can not provide you with and prove that it is. Be sure
to attend at the proscribed time and place bringing all
receipts, phone bills and expenses. You may even want to make a
claim for emotional stress.
If they cannot prove that the account is yours you will win your
case and the account will be removed from your credit file.
Also if the creditor is out of state and does not show up in
court, you win by default! It is highly unlikely that your
creditor will show up. They’re far to busy to waste time and
money on you when they have thousands of others to pursue.
Don’t be afraid to contact a local attorney in your area for a
free consultation regarding your rights in this particular
situation.
Filing for Bankruptcy
Bankruptcy is a subject that is beyond the scope of this
discussion, but if you feel as though you’ve exhausted every
avenue and have little choice, you’ll want to seek the help and
guidance of an attorney who is experienced in this arena. You
might try contacting your local Bar Association or try the
American Bar Association on the web at:
www.abanet.org. You may also
want to call your local Attorney General’s office, legal aid, or
consumer affairs hotline, they may be able to give you a good
referral or know of a Legal Aid service where attorneys
volunteer their expertise to consumers in need.
Good Luck!
**This material
is copyright protected and a portion of a much larger and more
comprehensive work. All rights are reserved by the author and no
part may be reprinted or reproduced in any way without the
express written consent of the author. Copyright©
Thomas DiSanto2005. You may right to the author:
tom@greenhillcredit.com
or write in care of Green Hill Credit Services P.O. Box 404 East
Greenwich, RI 02818. Thank You.
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