RAISE YOUR CREDIT SCORE 200 POINTS IN 30 DAYS: Part 3 – Clean Your Credit Report

March 1st, 2008 • Related • Filed Under • by erica

Over the last ten years, I have helped many people fix their own credit, and each time I do, I am amazed at the credit myths and the false beliefs that are out there. There is just so much incorrect information circulating, that many people begin to believe that repairing their credit is a long drawn out process. That is not true at all, and credit can be fixed quickly (in as little as 30 days) as long as you know the procedures. It is not about loopholes and trickery; it’s about your rights as a Credit Consumer and how you can utilize those rights to maintain the best score. In Part 1 of this series, I discussed how to manipulate open accounts to get your score up fast and in Part 2, I went over how to get out of debt quickly. In this article, I go over the basics of what goes into a credit report, and then I provide step-by-step instructions on how to clean your credit report in 30 days. It’s very simple, and it’s completely legal.

THE BASICS

1) Your credit report is just that…a report of your credit or the money you owe(d). It does not list utilities or cell phones since you pay those on a month-to-month basis. It does not merge with your spouses’ credit, but if you have joint accounts with your spouse (or any other co-signer), those accounts will show up on both of your reports…and only in that instance will negatives and positives affect both reports.

2) If you have a debt that is sold (a.k.a. sent) to a collection agency, that collection agency is going to post a claim of debt on your credit report, which negatively dings your credit score. If you do not pay off that claim, the collection agency will sell it to a second collection agency and your credit score will be dinged again. This can happen again and again, each time bringing your score down drastically.

3) When the first creditor sells the debt, they do not remove their claim from your report. It is not their responsibility to do so; it is yours. You do this by creating a “dispute” with each of the credit agencies asking for a correction. When you’ve made your dispute, the credit agency contacts the creditor and the creditor has 30 days to deny or verify your claim. If they do not respond at all, the credit agency will decide in your favor and the item you dispute will be changed or removed from your credit report forever. If it gets put back on later, you can show the reporting agencies that they removed it, and they will remove it again.

STEP-BY-STEP CLEANING INSTRUCTIONS

Step 1: Pull a 3-in-1 Credit Report with FICO Scores. Although it is true that you can get your credit report for free every 12 months at websites like FreeCreditReport.com, FICO scores are usually not included and you need to know your scores to know if your score has really improved. Therefore, it is an excellent idea to pay the extra charge and purchase the FICO scores for all three reports. It is also a good idea to pay to have the 3-in-1 Credit Report pulled directly from one of the credit reporting agencies’ websites, as you will be able to make disputes online directly for two of the companies. (Transunion is especially easy to make disputes with.)

Step 2: Read Your Report Carefully. Your credit report is divided into four sections. The first section includes your personal information like name, address, and place of employment. The second section is a list of all items hurting your score (such as late payments, accounts sent to collections and collection agencies). The third section is a list of all credit accounts in good standing. The fourth section is a list of all inquiries made in the last 24 months.

Step 3: Print Out Your Report. Once you have your credit report on the screen, print it out. You are going to want to highlight things and make notes, and it’s easier to do this on a paper copy that you can reference later.

Step 4: Highlight EVERY Late Payment. With a Yellow Highlighter, highlight all of the accounts that claim you paid 30, 60, 90 or 120+ days late.

Step 5: Highlight EVERY Collection Agency.

Step 6: Highlight EVERY Charged-Off Account.

Step 7: Begin Your Dispute: Now that you have highlighted all the negative items on your credit report, you are ready to begin your dispute. (Disputing online is easiest at Transunion’s or Equifax’s website. You can also do this by phone…all of the information will be listed on their websites).

Step 8: Say, “This Account was Never Late.” Dispute all items that are 30 days late (or more) by simply stating, “This account was never late.” By doing so, you will be able to turn negatives into positives without deleting your credit history. Many times, a creditor will not bother disputing such a simple claim, and it will changed automatically if they don’t respond. (Remember to reference the account number listed and the creditors name when doing this by mail or phone.)

Step 9: Say, “This account is not mine.” You want to do this for EVERY collection agency you highlighted AND every account that says it was “charged off.” This way, you can have many of these companies removed and bring your score up quickly. For companies that still do have your account, they will dispute your dispute and you can then deal with them as outlined in Part 2 of this Series. (Again, reference the credit account number and the creditor from your report.)

Step 10: Submit Your Claim and Wait. Once you have disputed the negative items on your credit report, the reporting agencies will begin an “investigation.” Creditors have 30 days to respond to any disputes you made, and if they do not respond, the negative items will be changed or removed from your report. Often, if you have paid off your balance and are in good standing with a creditor, a disputed creditor will not bother to contest the dispute you are making, thus automatically deciding the dispute in your favor. The ones that do respond are the ones you may have to deal with over the phone or in writing.

Step 11: Review and Retry. Once the 30-day investigation period is over, the credit reporting agencies will send the investigation results to you by snail mail or email. A new temporary section will appear on your report that lists each individual decision and it will only be visible to you (not to anyone you try to get credit with later). If some of the items you disputed were not removed, consider disputing them again in a few months. In the meantime, do a little extra legwork to ensure success on your next dispute.

BETWEEN DISPUTES – THE LEGWORK

Step 12: Make contact with creditors and collection agencies. Let them know what you are trying to do and see if they will cooperate. Ask them to make a note in your account verifying whatever your claim will be on your next dispute. (You can dispute these items without making contact, but you have a better chance of improving your report if you can get them on your side ahead of time.)

Step 13: Change Your Dispute Reasoning. If you do not believe the same dispute you made in the first go-round will work in the second attempt, change the reason you are making your new disputes. For example, creditors that were not removed can be re-disputed with “paid as agreed upon.” If it is not disputed the second time, the item will be changed from a negative to a positive, thereby increasing your score.

Although this may seem like a lot of work, it actually takes less then one hour to do for most people. Also, it is a good idea to do this at least once a year to make sure that your credit report only lists the items you want it to have. If you do not do this regularly, you are going into the credit game blind and you will deserve the bad score you get.

Also, check out the first two articles of this series (Manipulate Your Credit and Get Out of Debt Fast) to really increase your score fast in 30 days.