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Mortgage lenders generally check with
three credit bureaus in order to evaluate your past payment history.
Your goal in cleaning up your credit report should be to clean up
each of the three bureaus. If you only work on one, this does not
effect the reporting to the other bureaus.
Get A Copy of Your Credit Report
The
first step is to get a copy of your merged credit report, which shows
all three of the major bureaus, Experian (formerly TRW), Equifax
(formerly CBI), and Trans-Union. Most mortgage lenders will
obtain data from all three of these bureaus in analyzing your credit
history. The exception is that some portfolio lenders (usually
adjustable rate lenders) may only review one.
What to Say When You Call Your Creditors
There are two efforts that must be made. First, call any creditors
reporting a negative and ask them to remove the negative item. Ask
in a nice calm voice and do not get upset when they say no. Simply
repeat your request over and over in your nice pleasant voice. If
you get nowhere, then ask to speak to the supervisor. Make sure you
keep a log of your conversation, noting the date, time, who you spoke
to and what they said. Repeat this procedure over and over. In a
high percentage of cases, it works.
Get Written Confirmation of Agreements
Be
sure to ask for a letter by mail or fax that shows the creditor is
correcting the negative information. You may need this letter for
two reasons. First, they may not actually make the changes. With
the letter, you can appeal directly to the credit bureau and they
will make the correction. Second, if you are applying for a mortgage
before the changes actually hit the credit bureau’s report,
your lender will need this documentation.If you have a charge off
or collection account that shows as unpaid, don’t just send
them a check and pay it off. Call the creditor on the phone, explain
that you have the funds to pay the account in full, and calmly explain
why it should not have been reported on your credit in the first
place. Then ask if they will provide you a letter deleting the account
entirely from all credit bureaus if you pay off the account. Try
to get them to fax it to you. As before, be sure to document all
of your telephone contact and always keep a nice pleasant tone in
your voice. In a large percentage of cases, this also works.
Disputing the Report --
When Your Creditor Will Not Remove an Item
There will be cases when the creditor does not agree to remove
the negative credit item. If it is an item that is definitely not yours,
call the credit bureau immediately (except for Equifax, who only responds
by mail). When on the telephone, do not discuss any negative items
that are accurate. Do not discuss any items that may be accurate in
general but have some small error in detail that you can dispute by
mail. Once you confirm any accuracy at all, you cannot dispute it later
by mail.
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For the remaining items, you need to dispute them
by mail, writing directly to the credit bureaus. Write a letter
to the appropriate bureau including your name, social security
number, address, disputed accounts, and account numbers. You must
sign the letter. Inform the bureau that you are disputing the data
as it appears on your credit report.
Mistakes on Your Credit Report
Almost every item on your credit report will have some mistake,
even if only slight. Do not acknowledge any of the accuracies,
but be sure to note all inaccuracies. Write next to each item
something like, "not mine, not accurate, mistaken item,
complete error," or whatever is most appropriate. Request
a copy of the corrected report within thirty days. If they do
not respond within 30 days, send another letter. In this letter
you will include a copy of your dated original letter and a new
letter firmly requesting they remove the disputed information.
Include a cc: to the Federal Trade Commission.
Do Not Call the Credit Bureaus - Write Letters
The credit bureau may write a letter asking you to call. Do not
call under any circumstances. Your phone call will be recorded
and a log will be made of the conversation. Simply write back
with copies of your original letters, telling them of the original
date you submitted your request. Keep a file of all correspondence
to and from the credit bureau and follow through continually.
Do not get discouraged, as this will be worth your while. What
happens is that the credit bureaus forward your dispute to the
individual creditors. who have forty-five days to respond. If
they do not respond within the allotted time the item must be
removed. However, if they do respond at a later date with information
that documents the credit report is correct, the item will be
placed back on your credit report.
Bankruptcies
For those of you who have filed bankruptcy in the past, the items
that were discharged will normally show up as a charge-off
or uncollected debt. You will want to write to the credit bureaus,
providing a copy of your complete bankruptcy papers and request
that they show the debt as "discharged in bankruptcy." This looks better
and raises your FICO score. FICO sores above 680 make it easier
to obtain mortgage loans.
Conclusion
You may not be able to clean up every item on your credit report
using these methods, but you will certainly be able to improve
the way it looks to potential creditors.
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