Tips to Repair your Credit Score

Here are Some Tips to Repair Your Credit Score

If your credit score is low, it is most likely costing you money. The lower your score, the higher interest rate you will pay on everything if you can get credit at all. The following list is comprised of things that people have done to successfully raise their credit scores by hundreds of points in just a few months. It does take work but it is possible to do it yourself without spending hundreds of dollars.

 

Things to do with the Credit Reporting Agencies

1. Pull your credit report. I usually go to www.annualcreditreport.com and pull a free credit report from the 3 major credit bureaus: Transunion, Experian and Equifax. Federal law requires these bureaus to provide you with a free credit report once in every 12 months. If you have previously retrieved a credit reports from the this website, then I ask Clients to go to www.myfico.com or any one of the membership based websites, pull a credit report with the score, and then cancel the membership. If you forget to cancel the membership they will charge you a monthly fee..month after month on your credit or debit card.
2. Look for mistakes. If you see errors and there are always errors on the credit report, immediately write a letter of dispute to each of the Credit Bureaus. 
3. Old Accounts. Most accounts must automatically fall off your credit report 7 years from the date of last payment. Collection agencies buy old accounts from the original creditor and will usually start the clock all over again. Write to the Bureaus to remove this re-aged account. Write directly to the creditor or collection agency. If they cannot verify the debt they have to remove it from your credit report.
4. Collection Accounts. If a debt has passed the Statute of Limitation [in Florida it is 5 years from date of last payment,] do not pay any money towards this account. It re-starts the clock all over again.
5. Accurate Negative Information. Accurately reported negative information such as bankruptcies, foreclosures, late payments, etc. cannot be legally removed. But this should not stop you from disputing them. You should keep on disputing methodically and persistently until you get them removed. The usual time for them to fall off is 7 years, and 10 years for Bankruptcies. If you are persistent, you can get these off your credit report earlier than that. You win no matter what.
6. Verification of Debt. If credit agencies cannot verify the debt within 30 days of the dispute, they have to delete that item from your credit report.
7. Online Disputes: Don't do it. Credit Bureaus actively discourage you for doing so. After a few disputes, they will not allow you to dispute anymore. Always do it in writing. Yes, there are costs for envelopes and postage.
8. If the account is paid off but is showing past due amounts, do not dispute that it is your account but dispute that it was ever past due. It is better for your credit history to have a clean closed account than to have it removed.
9. Look for unauthorized inquiries. Having inquiries on your credit report lowers your score. If you have not authorized the company to make an inquiry, you can request that they remove it.
10. Look at the dates of last activity. A favorite among collection agencies is to restart the date of last activity when they purchase the debt. This is illegal. The date of last activity starts from the time you were late or the late payment went into collection, not from the last time you made a payment on the account. Challenge these with the credit reporting agency and they will change the date.

Next Steps

1. Look for any small recent outstanding debts and call the creditor. Negotiate payment in full if you can in exchange for them changing the credit report to paid as agreed. Get it in writing first. If you can’t pay them the full amount, negotiate a settlement for what you can afford. Insist that the credit report be changed.
2. If you have a credit card that is close to the limit, transfer some of the balance to another card to even up the available credit.
3. Don’t ever close old paid off accounts. These can actually help your credit score.
4. Write letters to collection accounts asking that they prove that the accounts are yours. If they can’t prove it, they have to remove the entry on your credit report. Give them 7 days to respond and then dispute it with the CRA again.
5. Ask for judgments to be vacated. You can have judgments reversed if you weren’t properly served or notified or if the debt isn’t yours as well as countless other legal reasons. This requires that you petition the court to have it vacated but it is possible to do this yourself.
6. If you have tried to dispute the account with the credit agency to no avail, the next step is to dispute the account with the collection company and creditors. Write them a letter stating that you do not believe the account is yours and asking them to provide written proof that it is. Most companies keep their records on the computer and after a few years, the written documentation is either destroyed or put into cold storage. This is similar to debt validation and if they cannot provide you with proof, they must remove the item from your credit report.
7. If the creditor does not remove the item from your report, you have two options:
8. Contact the attorney generals office in the city of the creditor. Tell them that there is a creditor that is damaging your credit by reporting a debt that is not yours. Let them know that you have requested proof and they could not provide it. This is free and the AG will contact the creditor and have the item removed.
9. If you want to get nasty about it file a suit in small claims court. All localities are a bit different so call your clerks office and ask how to go about it. You can sue for the damage to your credit report, expenses involved in getting it removed and emotional stress. Remember, they are in violation of the law. In most cases, the creditor or collection agency will not show up and you will win by default.
10. Pay your Bills on Time – This is a no brainer. If you are always late..how can you expect to ever improve your credit score.
11. Pay down your credit cards.You should not use more than 40-50% of your credit limit. The lower the better. It is better to have 20 credit cards which are used under the 40-50% limit than to have 1 credit card that you have used 100% of the limit.

Avoid Credit Repair Scams

1. If you are considering a credit repair or debt counseling, don't do it. They will take your money and do nothing for you. Some credit repair companies charge as much as $2000 to allegedly repair your credit.
2. If you choose to pay someone else to repair your credit, they have to give you an explanation of your legal rights, a detailed written contract and three days to cancel.
3. Avoid Emailed Credit Repair Offers – these are often fraudulent and you will be giving them way too much personal information such as SSNs, addresses, phone numbers, etc.
4. It is illegal to create a second credit file. This involves creating a new identity. Don’t do it. Some credit repair companies will offer to do this. Again, it’s illegal.
5. If you are going to use a credit repair company, check them out thoroughly before signing or paying anything. Is it guaranteed? References? Better Business Bureau complaints?
6. Be VERY CAUTIOUS about giving any information out over the internet. Remember that in order to even pull your credit report, the company will need your personal information. Remember it could a "scan artist" sitting in Ukraine asking for your most personal information such as social security number, date of birth, address, etc.

Attorney Elias Leonard Dsouza concentrates his practice on Bankruptcy [Chapter 7, 13 & 11,] Foreclosure Defense, Defense of Credit Card Lawsuits, Credit Restoration, and Debt Settlement & Credit Counseling. Our office also handles complex Civil Litigation, Business & Corporate Transactions & Litigation, Employment Law, Collections, Creditor representation, Real estate transactions, Personal Injury, Family Law, Immigration, Landlord-Tenant law, Franchise Law, Tax Law and We Sue Debt Collectors under the Fair Debt Collection Practices.

Attorney Elias Leonard Dsouza is also a member of the Broward County Small Law Firm Networking Group. If I cannot assist you in any legal matter, I will refer you to a member of the Small Law Firm Networking Group who may be able to help you.