The Keys To Fixing Your Credit History
Did you know that it is estimated that 1 in every 4 credit reports contains an error? This error could be costing you real dollars and cents in higher interest rates, and potentially even rejection for a new loan. However you do have ways to remove these errors and any inaccurate item from your file.
The Fair Credit Reporting Act gives you the right to dispute any item on your report that you feel is inaccurate or questionable. Furthermore this law states that an item can only remain on your credit history for a maximum of 7 years, it makes no mention of the minimum amount of time an item must remain.
The first thing you need to do is get a copy of your report from each bureau, you will have a total of three. Now you’re going to need to identify which items on your reports that you feel are questionable. Next, you will need to write a dispute letter to each bureau that contains the questionable item.
In your letter you need to include: name, reason for dispute, dates, and any other relevant information. You can file a dispute for a variety of reasons such as; not my account, incorrect balance, wrong dates, account is paid… Additionally you can also hire a professional service to do this for you.
Upon receipt of this letter the bureaus are required to investigate the item by the Fair Credit Reporting Act. When an investigation occurs the bureau contacts the lender or the collection agency that created the negative item and asks them to verify the account, the dates, and the balance. Often these businesses are unwilling to verify this information and thus the bureaus are required by law to remove this item from your credit history.
It is estimated that 80% of all bureau investigations result in the removal of an item from your report. The reason businesses are unwilling to verify old debts is because often they have already been sold to a collection agency. Therefore the business has written your debt off as a tax loss and no longer has any legal right to collect on it because the debt has been sold. Thus the businesses will be even more hesitant to spend more money on your account to verify the information the bureau requests.
Unfortunately your elected officials have done you a disservice when it comes to repairing or correcting inaccurate information on your credit file. Congress has given the right to the bureaus to decide whether or not a dispute is valid before they investigate. We strongly believe this is a result of lobbyists and big business influence.
Contrary to popular thought the credit bureaus are private businesses and earn profits just like any business. In fact to the bureaus are a huge industry generating billions of dollars in revenue every single year! The revenue credit bureaus generate is created regardless of the accuracy of the information they have collected about you.
The disturbing truth is that bureaus only spend money to investigate and correct inaccurate information that they have collected. Just like any private business the bureaus are in business for profit and thus want to avoid conducting investigations because it is only a black hole for money that would otherwise be profits.
Did you know the credit bureaus have been fined on a very regular basis by the FTC for not complying with the Fair Credit Reporting Act? The most egregious of these instances of noncompliance was in the late 90s when the bureaus were required to set up an 800 numbers for consumer disputes. These bureaus set up the 800 numbers however they neglected to staff employees to answer and handle these phone calls.
There were reports of consumers waiting unreasonable hold times, over 40 hours in some cases! The FTC responded and find all three credit bureaus over $ 1 million which was the biggest fine to date, however many experts claim this is nothing more than a slap on the wrist as the bureaus annually have revenues in the hundreds of billions of dollars.
This is why many individuals have turned to a professional credit service with attorneys to ensure their dispute is filed properly, and investigated. The bureaus have come up with a complex and sophisticated method of delaying, discouraging, and ignoring consumer disputes. Their hope is that you will just give up on correcting your credit report.