The ABC’s of Repairing Your Credit Score…
by Dr. Tony Bellenger
We all have heard credit score terms from credit repair companies and other institutions that can be very deceptive and confusing. Such phrases include New Empirca score, Fico score, Beacon score, credit score, Experian score, Equifax score, and Trans Union score. Don’t be alarmed. Many wonder how you can get three different credit scores at one business location, then when you travel to another business location in the same day and have three totally different credit scores that can differ by as much as fifty points.
Listen to this, I bet you didn’t know that there are approximately eight different scoring variations because the credit bureaus don’t actually score you. Here’s a little know secret all your credit scores come out of San Rafael, California, not the credit bureaus themselves.
Now do you need or just want a higher credit score? You may have some of the following:
1. Negative trade lines that appear in your credit report.
2. Late payments.
3. Charge offs.
4. Collections.
5. Foreclosures.
6. Repossessions.
7. You may also have too many inquires.
8. A.K.A.’s,
9. Addresses, or places of employment that may be injuring your credit score.
If you have any of the above, there is light at the end of the tunnel. The good news is it is absolutely legal to remove derogatory or negative items off your credit report and have credit score repair. The following guidelines come into play, the account must be obsolete, outdated, misleading, erroneous, the dates opened on the account are incorrect, the dates closed on the account are incorrect, or if you can not recall the account as well as many other reasons.
With that being said, here’s a few improvements that I feel should be in the credit model. For example; many of us pay on accounts every month that never appear on our credit report, such as phone bills, car insurance, medical insurance, gym membership, rent, and home utilities. Do those accounts show up on your credit report? Nope ! Then your real concern should be improving the key components of your credit score.
Now here’s where the rubber meets the road, you have the legal right to dispute and remove negative items off your credit report to help increase your score. This should only be initiated once you learn the appropriate methods in disputing and removing of any negative items off the credit report.
You should have in place the following before you start any credit repair on your own:
1. You will need a calendar to time your letters, disputes, and continual correspondence.
2. You will need the addresses of the credit bureaus, subsidiary bureaus, creditors, collectors, your State Attorney General, Federal Trade Commission, and possibly a local attorney that you can cc (carbon copy) all your correspondence that you have documented.
3. You will need certified mail as well as a notary.
4. You need a system that will allow you to track what items have been taken off the credit report so that you don’t continually dispute items that are removed. Please be aware that if you fail to do this the credit bureaus may consider and declare all your letters to be frivolous in nature and they will legally reserve the right to not investigate or not to change your credit.
5. You should be familiar with both the federal and your state’s credit laws.
Once you have these in place be sure to get familiar with the credit laws as noted in step five. Here are a few things to look out for:
a. When viewing credit restoration laws it is important to decipher whether the law is pertaining to a credit report or the legality of a debt. It is a myth that all consumer debt is owed for seven years. Almost all debt is governed by state statutes and not by federal law. Check the laws within your own state that govern the legalities of debt before you start any credit improvement.
b. Fair Credit Reporting Act (FCRA) - The Fair Credit Reporting Act was enacted
approximately 30 years ago and has had numerous revisions over that time period. FCRA benefits the consumer by putting time restrictions on creditors and credit bureaus to respond to any disputes made by a consumer. If the creditor’s or the credit bureaus fail to respond within the allotted time frame then the credit bureaus must change the credit information in accordance with the consumer’s disputes. This is the basic principal that simple credit repair companies use to fix your credit – “Not very effective in today’s world!” The FCRA also grants creditors and credit bureaus certain conditions to request additional investigative time periods into a consumers dispute.
Furthermore, the FCRA also gives the credit bureaus the option to permanently verify a dispute and never remove it if certain methods weren’t procedurally done by the party disputing the credit item. The FCRA also covers fraud alerts, the statutes of items in dispute for consumer reports, in addition to civil liability of damages for both parties.
c. Fair and Accurate Credit Transaction Act (FACT Act) came into law several years ago. The FACT Act allows the consumer to receive a credit report annually free of charge.
These will not contain credit scores and maybe a little more difficult to decipher. The FACT Act covers rules of “prevention of reinsertion, blocking information due to identity theft, statute of limitations, and credit wholesaler requirements, etc…
d. Uniform Commercial Code Laws (UCC Laws) - These are the laws that govern
transactions that are paid by personal or corporate check. The UCC laws also govern the differences and superseding definitions between contracts and legal agreements.
There are many state adaptations and variations to the federal law which cover addendums and legal stipulations when satisfying a debt.
e. Fair Debt Collection Practices Act (FDCPA) - Is a law that contains procedural rules for third party collectors, consumers and the penalties that may be levied against either party. The FDCPA governs how many times a collector can call a consumer, a consumer’s place of employment, family members, friends and neighbors. The FDCPA also covers the rules of the assigning of a debt. The FDCPA also notes when state law can override federal law when it comes to collection or credit disputes. The FDCPA covers the rules that a collection company cannot use abusive language, make false threats, and much more.
f. Equal Credit Protection Act (ECPA) - Contains rules governing when a creditor or collector can report your trade line to the credit bureaus. It also covers if a creditor is obligated or not obligated to report borrowers, co-borrowers, and authorized users on an individual account to the credit bureaus. The ECPA also protects against discrimination for age, race, gender, and religion.
There are so many credit laws that affect positively and negatively both the consumer and creditor. Therefore, when viewing credit laws it is important for you to determine whether the law is pertaining to a credit report or the legality of a debt. In addition, it is a myth that all consumer debt is owed for seven years. Almost all debt is governed by state statutes and not by federal law. Check the laws within your own state that govern the legalities of debt.
One final tip for the do it yourself credit repair person it’s recommended that your balances should be kept preferably under 20 percent, but at a maximum of no more than 50 percent your available credit. It is understandable if you can’t do this right away. Here’s another helpful tip, start with one of your lower balance cards and get this to under the 20 percent then work on the next card.
P.S. Sign up to receive your free "How to Improve Your Credit in 90 Days Without Spending a Dime" report and to get the free updates go to my blog http://save-your-home-from-foreclosure.blogspot.com
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