The Ultimate Electronic Credit Repair KitTM
1. Important Notice and Disclaimer
This document does not contain legal
advice. You are responsible for understanding the statutes cited, so look them
up. This document is published solely on an "as is" basis. The
entire risk as to its quality, performance, or applicability is with you.
Should the information in this document prove to be false, misleading, or in
contravention to law, statute, or regulation, you, and not the Copyright
Holder, assume all risks. The Copyright Holder will not be liable for direct,
indirect (including, but not limited to any loss of business or anticipatory
profits), incidental, or consequential damages resulting from your
reliance on the information contained herein, even if the information was
false, misleading, or in contravention to law, statute, or regulation, and even
if the copyright holder has been advised of the possibility of such.
2. Shareware Notice
The Ultimate Electronic Credit Repair Kit tm
is published as-is. The Copyright Holder disclaims all warranties, expressed or
implied. The Copyright Holder assumes no liability for the information
presented in this document.
3. What is Credit
Repair? [Contents]
First of all, the term "Credit
Repair" is really a misnomer. All the information in this document is
provided to help clear up those
"questionable" items on your credit reports. At no point will this
document suggest that you challenge correct and accurate items on your credit
report, even if they are derogatory. That would be unethical.
So, everything you need to know to help
you begin repairing your unfairly damaged credit is enclosed. Please read
through the entire kit very carefully before you begin. If you follow the
suggestions, you should be able to restore your credit completely!
4. The Credit Business [Contents]
Just as you would not loan money to just
someone you did not know and trust, financial institutions, such as banks,
mortgage companies, finance and credit card companies, do not just give loans
or issue a line of credit to anyone. But it is impossible for these
organizations to personally know everyone of their customers.
5. Credit Reporting Agencies [Contents]
This is why credit reporting agencies, or
credit bureaus, exist. They collect credit information on individuals, and then
sell this
information to their clients, primarily lending institutions. The information
in these credit reports helps the institution decide whether or not the
individual is able and likely to make the payments on the loan, based on their
past credit experience. Most lending institutions actively cooperate with the
credit bureaus, by giving them the very information that is later resold. If
you are curious, here is the law that dictates the permissible uses of
credit reports. For an excellent article exploring this in more detail, read
Report # 1: How The Credit Reporting System "Works".
Credit reporting agencies do not rate your
credit worthiness. That is up to the individual lending organizations, but they
rely heavily on the information supplied in the credit reports. The leading
credit scoring model is called FICO®, created by a company called Fair, Isaac and Co., Inc. While their model has been kept secret for
decades, public pressure and threats by lawmakers have forced this company to
disclose more and more of its details. Check out their website, for more
information. To get another idea of what information is important, and how it
affects your credit rating, try out the Free
Credit Analyzer.
6. Inaccurate Credit Reports [Contents]
Newspaper stories over the last several decades
have repeatedly highlighted the problem of inaccurate information contained in
credit reports. According to a
1998 study by the Public
Interest Research Group, out of the credit reports surveyed, 29% contained
serious errors that could result in the denial of credit, 70% contained
mistakes or errors of some kind, 41% contained incorrect personal demographic
identifying information, 20% were missing major credit cards, loans, mortgages,
or other accounts that are critical to demonstrating consumer credit
worthiness. In addition, the report found that it was difficult to obtain
credit reports. 15% of total requests were never received by the consumers,
despite repeated calls and/or letters. Of the consumers who did obtain their
credit reports, at least 14% of them were forced to call back 3 or more times.
12% of consumers waited two weeks or longer to receive their report once they
finished requesting it, and it took more than a month for one
Other past studies found that more than 3
in 5 consumers have negative information in their credit report, and nearly
half of the studied reports contained errors. Some of the errors were serious
enough to prevent the individual from qualifying for credit, serious errors
like false delinquencies and judgments that simply don't belong to the
consumer. Unfortunately, there was very little anyone could do to fix these
problems.
7. Fair Credit Reporting Act (FCRA) [Contents]
To address this issue, and provide a
remedy to consumers for poor record keeping on the part of the credit reporting
agencies, the US Congress first passed the Fair Credit Reporting Act (FCRA) in
1971. It has, since then, been revised and refined several times, most recently
in 1997. The laws established by this act require the credit reporting agencies
to remove all obsolete, inaccurate, irrelevant, outdated, misidentifying,
incomplete, incorrect, erroneous, and misleading information from their credit
reports.
Specifically, if the completeness or
accuracy of any item in a consumer's file at a credit reporting agency is
disputed, the agency shall re-investigate free of charge and record the current
status of the disputed information, or delete the item, before the end of the
30-day period beginning on the date on which the agency receives the notice of
dispute.
Further, the credit reporting agency shall
promptly provide notification of any dispute to anyone who provided any item of
information in dispute. If an item is found to be inaccurate or incomplete or
cannot be verified, the credit reporting agency shall promptly delete the item,
or modify the item, as appropriate, and notify the consumer no later than 5
business days after the completion of the re-investigation.
The credit reporting agency must also
provide the consumer with notice that a description of the procedure used to
determine the accuracy, including the business name, address and telephone
number of any furnisher of information, must be made available to the consumer
upon request. This description of the re-investigation procedure must be
provided within 15 days of the request.
The relevant laws are found in United States Code,
Title 15, Chapter 41, entitled Consumer Credit Protection. The laws relating specifically to credit
bureaus are found in Subchapter III of the above cited chapter, entitled Credit Reporting Agencies. The laws which detail requirements
relating to information contained in credit reports is found in 15 USC §
1681c. The laws which require the credit reporting agencies to assure
maximum possible accuracy are found in 15 USC §
1681e. To help clarify many common misconceptions, read this excellent
article, Report # 2: Rampant Myths About Credit Reporting.
8. How Long Items Stay on a Report [Contents]
In most cases, bankruptcies will remain on
a credit report for 10 years following the discharge of the bankruptcy. Other
entries remain for about 7 years from the date of the last activity. This means
that, generally, the 7 year clock is reset whenever you generate any activity
on a non-delinquent account, including making a payment. But once the account
has gone and remained delinquent, the clock cannot be reset. Some unscrupulous
creditors will try to reset the clock by reselling the account, but this is not
correct. The FTC has made their
position clear on this.
Current law generally prohibits consumer
reporting agencies from including in a consumer report accounts placed for
collection or charged to profit and loss which predate the report by more than
7 years. The law now specifies that the seven-year period with respect to
information concerning a delinquent account charged to profit and loss may
begin no more than 180 days after the commencement of the delinquency.
Congress intended to establish a single
date -- the start of the delinquency -- to begin the obsolescence period (7
years plus 180 days). This avoids the "multiple date" problem that
arguably existed prior to the 1996 amendments to the law. Thus, the date of the
"commencement of the delinquency" that led to the creditor's charge
off or collection action would be the earliest date from which the account was
continuously delinquent, plus 180 days.
The start of the 7 year period is now
described with some precision by the statute, and subsequent events, including
sale of the charged off account by the creditor, or a payment, or a dispute
about the account by the consumer, do not change the allowable reporting
period.
There is an exception for charge offs or
collections that were first reported before
9. Improving Your Credit Report
This kit will guide you, step-by-step,
through the process of removing all inaccurate or misleading, negative
information off your credit report. Please study each step very carefully.
10. Repair Your Credit [Contents]
Here are the steps
required to restoring your good credit:
- Obtain Your Credit Reports
- Review Your Credit Reports
- Repeat ...
- Request Correction
- Await Response
- ... Until Satisfied
That's all there is to it. Seems easy
enough, but you must have patience, because the credit bureaus are not always
very cooperative. They make their money by providing credit reports to lenders,
not by fixing bad information in their databases.
While you are following this process, you
should simultaneously pursue another strategy, dealing directly with your
creditors. This article, Report # 3: Negotiating with Creditors to Save Your Credit,
explains the benefits and considerations of that approach.
11. Important Mailing Instructions [Contents]
As you proceed through these steps, keep copies and records
of all correspondence you send and receive, including the envelopes! It is very
important that you keep copies of everything when communicating with a
creditor, debt collector, or credit reporting agency. Should they violate the
law, you will have the necessary documentation to prove it, and perhaps make
them pay. If you should encounter any special difficulty and need more help, you
will also need these records to proceed. Finally, if information that was
removed from your credit report should reappear later, you will have the
documentation to force the credit agency to permanently delete this entry.
It is recommended that you send both a fax
or certified mail copy, as well as standard 1st class mail with
proof of mailing ["certificate of mailing"]. This is because they may
not accept your certified mail, or deny receipt of the fax, but this way, you
have gone the extra mile, and can prove it if necessary.
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Here is the procedure to follow when
corresponding with creditors, debt collectors, or credit reporting agencies:
o
send letter #2 by 1st
class mail with a "certificate of mailing" (proof that it was
mailed) §
request and save
for your file: §
a dated/stamped
cash receipt §
a dated/stamped
"certificate of mailing" (small extra fee) 10.
For each letter set
you send, you will have as proof: o
a copy of their
letter, with its envelope [if any] o
a copy of your
signed letter o
your attachments
[if any] o
fax confirmation
sheet as proof of faxing [if you used fax] o
dated/stamped cash
receipts from post office o
certified mail
receipt o
certificate of
mailing for your 1st class letter o
return-receipt,
after it arrives in the mail 11.
You should staple
all this together, and file it all away in a safe place for at least one year |
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You should print this outline, and use it
as a checklist when preparing your letters. As you can see, the process is a
bit involved, and while everything is already laid out for you, it is still you
that has to do the work. You may find it helpful to read this thought-provoking
article, Report # 4: The Principle of Prioritized Outcome, which may
help you accomplish this goal by better understanding your own motivations.
12. Free Credit Reports [Contents]
Under the Federal
Fair Credit Reporting Act (FCRA), you are entitled to obtain a copy of your
consumer credit report from any consumer credit reporting agency for a
reasonable charge. The FCRA also states that you are entitled to receive a
disclosure directly from the consumer credit reporting agency free of charge,
if:
- you certify in writing that you are unemployed and
intend to apply for employment within 60 days, or
- you are receiving public welfare assistance, or
- you have reason to believe your consumer file contains
inaccurate information due to fraud, or
- you have been denied credit, insurance, or employment
within the past 60 days
If you are a resident of Colorado,
Maryland, Massachusetts, New Jersey, or Vermont, you may receive a free copy of
your consumer credit report once each year, and if you are a resident of
Georgia, twice each year.
As you will receive an updated copy in
response to your dispute, this is yet another way to obtain your credit report.
Dispute a specific erroneous item with each of the three credit bureaus (as
detailed later in this report), and after their investigation is complete, you
will receive updated credit reports. To be effective, you must have specific
knowledge of an erroneous item on your credit report, and it will take two
months before you are likely to see the update.
You might consider taking advantage of
this offer, to get your Credit Report. Outside of these circumstances,
you may obtain a copy of your credit report for a nominal fee (maximum by
federal law is around $9). In some locations, you may even find local credit
bureaus (almost always "affiliated" with one of the big national
firms), who may sell you that same credit report over the counter, in person.
Check your local yellow pages, under "Credit Reports" (no kidding!).
For
reference, here are Experian's
instructions, Equifax's instructions and Trans Union's instructions on obtaining your credit
report. You may even be able to order your
credit profile online, but check their site.
This is your first step.
13. Obtain Your Credit Report [Contents]
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Either order online (recommended for
speed and ease), or follow the format in Sample
Letter 1, and write to each of the three major credit reporting agencies,
at the addresses posted on their web sites, or available from the 800 numbers
below:
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Note: The credit bureaus change their
addresses from time to time. Check their web sites or their 800 numbers for the
most current addresses.
In your request letter, you should
provide:
- full name
- birth-date
- Social Security number
- current address
- former addresses in last 5 years
- photocopy of driving license, showing current address
- photocopy of Social Security card
If you fail to include any of these, you
will receive a letter back from the credit reporting agency request that it be
included. The credit bureau may request additional information anyway, and you
should provide it as quickly as possible.
Within 10 to 30 days you should receive a
copy of your credit report from each of the agencies.
14. Review Your Credit Report [Contents]
Now that you have the credit reports in hand,
review them very carefully. Each agency follows their own unique format, but
they provide the information which will help you decode your credit report. You
can find additional decoding information here.
Specifically, for more information on decoding credit reports, see these links:
- Equifax Credit Reports [from
TenantScreening.com]
- Experian Credit Reports [from
TenantScreening.com]
- Trans Union Credit Reports [from
TenantScreening.com]
15. Dispute Incorrect Personal Information [Contents]
It is critical to first review all the
personally identifying information in the credit reports, including:
- Names and Aliases
- Addresses
- Social Security Number(s)
- Date(s) of Birth
- State ID Number(s)
- Spouse Information
- Employers
Note whether this
information is in any way inaccurate, incorrect, erroneous, misleading, or
outdated. You must dispute these mistakes first, because this data is used to
help verify the credit items on your credit report. Frequently, when an item
not yours appears on your report, it gets there and stays there because it
somehow matches up with some incorrect personally identifying information. By
disputing these first, other erroneous items will no longer match your file.
So, for each credit report, carefully note
any records which you believe to be inaccurate, incorrect, erroneous,
misleading, or outdated. It does not matter whether you think the information
is negative, neutral, or even positive, if it is in anyway erroneous it should
be removed.
16. Rank Questionable Items [Contents]
Once you have noted each questionable
item, you should rank them. After erroneous personal data, rank the most
damaging information first, followed by the next most damaging, etc., until
those items which are neutral. Do this for each credit report, as they may not
all have the same questionable information on them.
The following ordered list should give you
an idea of the significance of erroneous or derogatory information:
- personal
data
- bankruptcy
- consumer credit counseling
- foreclosure
- consumer credit counseling
- loan default
- repossession
- court judgments
- collections
- past due payments
- late payments
- credit rejections
- credit inquiries [Report # 5: Do Credit Inquiries Hurt You?]
You will find that some of the
questionable information is duplicated on one or both the other credit reports,
but not all will be. Pay particular attention to the addresses listed, and
dispute all but your current address first, it will ease having other
erroneous, misleading, or outdated information removed. In any case, you
should send a dispute letter to each of the three major credit reporting
agencies, for each questionable item, whether it appears on their report or not.
This is to assure that the same questionable item will not be removed from one
report only to reappear later on another.
Next follows the most critical step.
Guaranteed
Access To Financing Capital 
17. Requesting Corrections [Contents]
It is very important that each questionable
item, except for erroneous personal data, is dealt with individually. If you
attempt to have the credit reporting agency correct several items at once, it
will be easier for the agency to claim that your request is frivolous or
irrelevant.
They may attempt to bully you into
believing that your request is frivolous, or even unlawful. But the credit
reporting agencies are required to assume that all disputes are bona fide,
unless there is clear and convincing evidence that it is not. A blanket dispute
(i.e. all information is challenged) may be considered evidence that the
dispute is frivolous, if you fail to provide any allegations concerning
specific items in your file. At this point, you may want to review the Report # 2: Rampant Myths About Credit Reporting report.
You should challenge each item
individually, and not give in to them if they send ominous letters warning of
dire consequences if your claims are frivolous. If the information they are
reporting is inaccurate, incorrect, erroneous, misleading or outdated, they
will have to remove it upon investigation. The specific law on disputes is
found in United States Code, Title 15, Chapter 41, Subchapter III,
Section 1681i, entitled Procedure in case of disputed accuracy.
You will now write a letter to each credit
reporting agency, requesting an investigation to verify the status of the most
damaging item reported by any of the agencies, and asking that they correct the
information. In general, it is important that the letter not look like a form
letter, so consider handwriting it.
Also, keep in mind that absent a clear
statement that the accuracy or completeness of specific information is
"disputed" or "challenged", your letter might not be
construed as an exercise of rights under the Fair Credit Reporting Act (FCRA).
Specific words to use include: erroneous, outdated, misleading, or
unverifiable. Mere explanation of the reason a debt was not paid might not
constitute a dispute and does not require the credit reporting agency to
re-investigate or accept your written dispute statements. Explanations are not
useful, but disputes get results.
Once the credit reporting agency has
received your dispute letter, they are obligated to investigate. This
obligation is not contingent upon you having been denied credit.
Note the addresses to which the credit
reports direct you for disputes. They will not be the same as the addresses you
used to obtain the credit report. Again, write to each of these three:
- Equifax Credit Information Services
- +1.800.448.2321
- +1.800.882.0648
- +1.800.290.8749 (Fraud Department)
- +1.770.612.2603 (Fax)
- Trans Union Corporation
- +1.800.888.4213
- +1.800.916.8800 option 2
- +1.800.680.7289 (Fraud Department)
- Experian (formerly TRW) Consumer Relations
- +1.888.397.3742 (+1.888.EXPERIAN)
- +1.800.583.4080 (Fraud Department)
Note: The credit bureaus change their
addresses and phone numbers from time to time. Check their web sites or their
800 numbers for the most current information.
Follow the format in
Sample
Letter 2, and send it in. If you are dealing with excessive, unauthorized
credit inquiries, follow the format in Sample
Letter 2.5. Follow the important
mailing and record keeping instructions.
Within 10 to 30 days you will receive a
letter from each credit reporting agency telling you that they are
investigating your dispute. Within another 10 to 30 days, you should receive an
updated credit report, indicating that the disputed item has been removed.
As soon as a credit reporting agency
provides you with an updated credit report showing that the item has been
deleted, you should send another dispute letter, in regards to the next most
damaging item.
Repeat this process, until each and every
questionable item has been deleted.
In some cases, the credit reporting
agencies are slow to respond to your dispute. If this should occur, you may
choose to write another letter, strongly reminding the credit bureau of their
obligations under the law. You may follow the format in
Sample
Letter 3, and be sure to again send it registered, without return-receipt
or insurance. Again, carefully follow the
important
mailing and record keeping instructions.
Should the credit reporting agencies just
flat out ignore even that letter, you may follow the format in Sample
Letter 4, but tailor it specifically to the circumstances in which you now
find yourself. Be prepared to contact the FTC to file your formal complaint,
should even this letter not elicit a response. At this point, you should
seriously consider retaining
an attorney, as willful failure to comply may subject the credit reporting
agencies to liability.
18. The Consumer Statement [Contents]
You have a right to add a consumer
statement, up to 100 words, to any item on your credit report. This can be
helpful in circumstances which were truly exceptional, where a simple and
honest explanation will take the "sting" off the item, and when there
are just a few negative items among a long list of neutral and positive items.
Example of helpful consumer statements
include:
- I was in an accident, and unable to work
- My employer went bankrupt, and I did not recover
several weeks of wages
- I was called up to active duty, and was unable to tend
to these matters
- Due to a natural disaster, my life suffered a major
disruption
- The product/service ordered was not provided as
promised, and the creditor refused to resolve the matter
It is important that in each case you also
add that the problem is now resolved, and will not continue to affect your
finances. The key is, this was an exceptional occurrence, and you have done
your best to take care of things, and at the time, these creditors could not be
taken care of properly, but everything is back to normal now. Recite the simple
facts, and make sure you can prove them, and these negative items are unlikely
to be of much significance. Your statement should be "just the
facts", leave out any emotional or derogatory comments, and you will often
be viewed as reasonable and the item given less weight.
19. The "New Credit File" Alternative / Scam [Contents]
By know, you have
undoubtedly seen many ads and some Spam e-mail regarding a
"fool-proof" way to create a "new credit
file", otherwise legally know as "File Segregation".
What is "File Segregation"?
File Segregation, is the
process of obtaining a separate identification number, usually but erroneously,
a federally issued EIN (Employer Identification Number) or TIN (Taxpayer
Identification Number), and using it, or some variation of your normal social
security number, in place of your registered, real Social Security number when
applying for credit. This is intended to shield an applicant's true credit
history from an inquiring agency. So far, this may sound like a reasonable
idea. There are many things to consider when “creating” a “new credit file”,
which CAN be accomplished legally and correctly but only if done by a lawyer or
credit experts.
So, what's the scam?
The are many, many sites
and scammers offering “New Credit File” or File Segregation Services, and each
in turn is shut down by government investigators, but not before many people
fall prey to the site operators first. What these operations are trying to do
is to give you a "new identity". You pay their fee and sign up for
their services. Then you are directed to apply for an Employer Identification
Number. Sometimes, they even provide you the forms and some instructions on how
to fill them out.
When you get the EIN, you
will be told to use that instead of your Social Security number when you apply
for credit. They'll probably also tell you to use a new mailing address.
OK, so what's wrong with
"File Segregation"?
Basically, some of the acts
required to accomplish opening up a “new credit file” this way are ILLEGAL!
First, you are applying for an EIN, when
in fact you have no intentions of using the number provided by the IRS for the
intended purposes. Since the form requires you to sign it under penalties of
perjury, well, you can see the problem there. You can view the application form
at http://ftp.fedworld.gov/pub/irs-fill/fss4.pdf.
Second, it’s illegal for, “Whomever -
(1) Knowingly and with intent to defraud produces, uses, or
traffics in one or more counterfeit access devices as per US Code TITLE 18, PART I, CHAPTER 47, Sec. 1029, Fraud and related
activity in connection with access devices
Also, under the Federal Trade Commission's
Credit Repair Act, Sec. 404, in some cases it may be a felony to use a false
identification number
Third, if you use any means of interstate
commerce, such as the mails, telephone, or fax, to submit an application for
credit, you can also be prosecuted for mail or telecommunications fraud.
And
finally, if a
creditor is damaged (they lose money) because you defaulted on a loan obtained
by an application with false statements, they can sue you for fraud as well.
Though having a carelessly
made “new credit file” may be tempting and a quick fix for your present credit
problems, it could cost you thousands of dollars and maybe even jail or prison
time. And while you will have a second file for a while, it will not take very
long for the credit bureaus to catch on. This scam has been around long enough
that the credit bureaus are quite familiar with it, as soon as they detect it,
they will merge the real and the "new" files, with an additional
notation that you are using a false SSN. If you’re set on having a “new credit
file” consult your attorney or reliable credit experts and do it right or not
at all.
20. Pre-Approved Credit Offer Opt-Out [Contents]
You have a right to notify the credit
reporting agencies not to use your credit file in connection with any
transaction that you do not initiate, specifically those
"pre-approved" credit offers. To exercise this right, notify the
three agencies by calling +1.888.567.8688 (+1.888.5.OPTOUT). If you prefer, you
may notify them in writing:
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Trans Union |
Experian |
Equifax Credit
Information Services |
21. Preventing Identity Theft [Contents]
Don't make it easy on
"identity-thieves". With the use of a little bit of common sense,
months, even years of trouble can be averted.
Never pre-print your Social Security
Number (SSN) on checks or any other pre-printed forms. It is too easy for
"identity-thieves" to get that information, fraudulently obtain
credit in your name, and severely damage your credit.
Also, if your driving license uses the SSN
as the driving license number, in most states, you may request that the DMV use
another number instead. Most states mandate this option.
And finally, if you find yourself being
asked to provide your SSN by a private business, just refuse, or write
"REFUSED" in the requesting form. If they persist, demand to see
their written policy requiring an SSN. Most business will have none, and cannot
legitimately require you provide it. They generally will back down if you
persist. In the case of an employment application, just write "provided
upon hire". Stand up for your rights, and protect your privacy.
Guaranteed
Access To Financing Capital
22. Stop Abusive Debt Collectors [Contents]
Here is some information you might find
helpful in dealing with collection situations, by using the Fair Debt
Collection Practices Act (FDCPA).
Collection agents and some collection
attorneys must comply with the Fair Debt
Collection Practices Act, 15 USC §§ 1692 et seq. (FDCPA). The FDCPA regulates
the language that collection agents can use in collection letters. If you
receive a collection letter, it is a good idea to check out the letter with an
attorney who practices in this area of law.
Some of the letters sent by collection
agents contain false or misleading information. Others attempt to confuse you
as to your rights. If any collection letter you have received violates
the law, you may be entitled to sue the collection agency for damages of up to
$1,000, plus get back all of your attorneys fees.
- Because this law allows attorneys to collect their
legal fees from the violating collection agency, many attorneys will not
charge you to take on a case. Look for law firms
that practice in this area of law as well as Truth in Lending cases, Consumer
Leasing Act cases, and other consumer law matters.
The FDCPA regulates collection actions in acquisition
of location information, communication
in connection with debt collection, harassment
or abuse, false or misleading representations, unfair
practices, validation of debts, multiple
debts, legal actions by debt collectors, and furnishing
certain deceptive forms.
For a good summary of these FDCPA
violations, read this short report, Report # 6: Illegal Creditor Actions.
If you find yourself the target of a debt
collection action, make sure that the debt collector is staying within the law,
or they may face civil liability. Recently, for example, collection agency
Perimeter Credit settled charges of violating the Fair Debt Collection Practices
Act (FDCPA) for a $300,000 civil penalty.
It requires only minor effort to stop a
debt collector from harassing. Included in this kit, you will find a letter, Sample
Letter 5, to use whenever you are contacted by a collection agency. Use the
letter to dispute the debt, or any part of the debt, you are
not sure you owe. It is the collection agency's job to make sure they are
collecting only the right amount. You should also send copies of this letter to
the company for whom the collector is trying to collect. It is very important
that you follow the mailing
and record keeping instructions provided. If the collection agency violates
the law, you will need the necessary documentation to prove it and make them
pay. Even if you owe the money, you can still send a letter to tell the collector
to stop calling or writing you.
Once the collector has your letter, they
should suspend collections and not contact you for 30 days, during which time
they should investigate the validity of the debt. Most collectors will not
bother to investigate at all. If that collector contacts you after you have
disputed a debt without having validated the debt, they most likely have
violated the law. Contact your lawyer immediately, the collector could owe you
$1,000.
Remember that nothing is foolproof, and you
should be prepared to deal with the situations as they come up. Be creative, be
flexible, and be persistent. You will be successful.
Sample Letter 1 - Request for Credit Report [Contents]
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Sample Letter 2 - Dispute Letter [Contents]
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Sample Letter 2.5 - Dispute Letter, Unauthorized Inquiries [Contents]
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Sample Letter 3 - Follow-up to Dispute Letter [Contents]
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Sample Letter 4 - Notice of Intent to File Complaint [Contents]
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Sample Letter 5 - Dispute Letter to Credit Collector [Contents]
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Sample Letter 6 - Request for Procedure Description [Contents]
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24. More Information & Resources [Contents]
We endorse none of the products or
services offered in the following listings, in fact, some of them you should
avoid. Especially note the FTC charges against services offering "New
Credit Files", compare that to the services offering the very same
"New Credit Files" and eCredit
Magic's service. I list them here so you can read the information,
and make the determination for yourself. Caveat Emptor (let the buyer beware)!
Consumer Credit
Equifax: Consumer Credit Frequently Asked Questions
Experian Credit Advice: Ask Max
Experian: Consumer Credit Information
About.com:
Credit/Debt Management
About.com: Credit/Debt Management, Dealing With Creditors &
Collectors
American Express Glossary of Credit Terms
American
Loan Search: Guerilla Credit Repair
California
Public Interest Research Group
Creditinfocenter: Get the Statute of Limitations in your State
Fair,
Isaac and Co., Inc.: Credit scoring model information
FTC: Credit Consumer Protection
FTC:
Credit Repair, Self-Help May Be Best
FTC:
Credit Repair, Help Yourself First
FTC: Fort Lauderdale Attorney Agrees to Settle Deceptive Credit
Repair Charges
FTC: Credit Repair Organizations Act, 15 U.S.C. § 1679, et seq.
FTC: Fair Credit Reporting Act (FCRA), 15 U.S.C. §§
1681-1681(u), as amended
FTC: Telemarketing Sales Rule, 16 C.F.R. Part 310
How to read your credit report
"HAWK"
message meaning on a TransUnion report
National Institute for Consumer Education: Resources on Fraud
National Institute for Consumer Education: Resources on Credit
Problems
PIRG: Consumer Credit & Privacy: NIGHTMARE ON CREDIT STREET
PIRG:
Mistakes Do Happen: Credit Report Errors Mean Consumers Lose
Student
Credit: student credit cards and how to use them wisely
US GSA Consumer Information Catalog,
Pueblo, Colorado
Victims of Credit Reporting (VCR)
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Reports for the Ultimate Electronic Credit Repair Kit |
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1. How The Credit Reporting System "Works" The
credit reporting system is a business relationship between two parties: 1) independent
agencies that collect credit information called credit bureaus; and 2)
merchants who pay for a copy of this credit information on an as-needed
basis. Credit bureaus refer to these merchants who pay a fee for their
service as subscribers. As with any business, the main focus of the bureaus
is to meet the needs of their customers, the merchant subscribers (not you). When you
apply for credit with a local merchant, the merchant turns to a credit bureau
to obtain a copy of your "credit reputation" to help him evaluate
the risks in extending credit to you. The bureau doesn't actually approve or
deny your credit, but rather supplies the merchant with your payment history
as reported by other subscribers with whom you have received credit. However,
the bureau will use a closely guarded secret formula to assign a credit score
to each individual based on the information in the file. This information is
the most significant factor in the merchant's decision regarding your
"ability and willingness" to meet your future financial
obligations. The merchant is counting on the credit bureau's information to
serve as a filter to help separate good credit risks from poor risks. The
shortfall of this system is that the product, you, has little clout in this
relationship. The merchant's primary motivation is to avoid bad credit risks,
and the bureau makes a profit by charging the merchant for helping him do
that. The consumer has no positive financial impact on the bureau. Thus,
while you are out of the loop, you are surrounded by it. If that
weren't enough, you also have to compete against human nature. Without
documentation of errors, the bureaus are inclined to report information as
reported by subscribers--assuming the negative. After all, the
merchant/subscriber is not going to complain because he didn't like what he
saw on your file and thus didn't extend credit and didn't lose any money. Any
losses for not taking a risk are speculative and argumentative, certainly not
tangible. The only decisions that might draw criticism from the merchant are
the losses as a result of the bureau omitting some negative information that
would have caused the merchant to have declined extending credit. This is
not intended to make the credit bureaus appear the great "evil
empire" that some have made them out to be. They are huge bureaucratic
companies whose policies have evolved from simple business economics and
human nature. Every credit bureau desires to maintain as accurate information
as financially feasible, but at the same time they realize the quality
control limitations dictated by competition and operating costs. And they
realize that if they do err, it is better to err on the negative side rather
than the positive--if they are going to serve their subscribers' best
interest. Although they want to develop as truthful a portrait of your credit
history as possible, human nature compels them to give highest priority to
recording any remarks that might be true and might keep their customer-base
from entering into a risky credit arrangement. After all, that is their
service, and nothing directly impacts their bottom line any greater. It's
much like having a mechanic check out an automobile before you make a
decision to purchase it. The mechanic is put on the spot. If he tells you
it's a good car, and it breaks down on you, then he looks bad. He'll never be
burdened with your complaints about the three he blackballed, only the one he
okayed--if it should break down on you. Human
nature compels him to go into the situation looking for what's wrong, not
what's right. You are about to make a major financial decision based mainly
on the information your mechanic gives you. Similarly, the merchant may be
making a comparable investment based on the information provided by the
bureau. |
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2. Rampant Myths About Credit
Reporting Whether
you realize it or not, there is a tremendous battle going on aimed at shaping
your opinion. On one side you have the credit bureaus with a massive public relations
campaign to discourage consumers from attempting to restore their credit by
telling them it is impossible. They do this by limiting their acknowledgment
to those methods strictly outlined in the Fair Credit Reporting Act, such as
the dispute method and the consumer statement. On the
other side you have consumer rights groups pushing for more reform. And
sometimes in the middle, but most often leaning toward the side of the
bureaus, you have the Federal Trade Commission. If that weren't enough, you
still have outside voices (attorneys and credit repair services) whose
motives are purely financial and at time such motives and ignorance add more
fog to an already cloudy landscape. The
result is a lot of conflicting and confusing information. It is very
easy to get bogged down in this information glut. But you don't have to
muddle in the mire. This resource strives to shine a bright beam of truth to
dissipate this fog of misinformation--so that you can begin pursuing a clear
path, able to discern the good and the bad offered you from both sides. As
evidence of this ongoing credit war, consider these great myths about the
credit reporting industry. Each of these statements below is false.
Nonetheless, almost every consumer still believes that one or more may be
true. Myth:
The information on a credit report cannot be changed. Fact: Exactly the opposite is true. The Fair
Credit Reporting Act requires that items be removed if they are not fully
100% accurate OR can not be verified within 30 days. Also, anything a
creditor is responsible for reporting and confirming, a creditor can change. Myth:
Requests (inquiries) for credit reports can't hurt them. Fact: At the end of each report will be a log
of inquiries. An inquiry notation is made each time someone requests a copy
of your credit file from that credit bureau. Any company that receives a copy
of your credit profile will be listed under this inquiry section of your
report. Lenders
don't like to see a lot of inquiries on a credit report. Excessive inquiries
can result in a credit denial as easily as bad credit. But, not all inquires
are viewed negatively. (Full details at The Subject of Inquiries) Myth:
When I pay off a delinquent account such as a charge-off or collection
account, it will stop hurting my credit, because it will then be shown as
"paid." Fact: As hard as it might be to believe,
sometimes paying off a debt can actually hurt you. This is one of those
occasions. These type of collection accounts are allowed to stay on your
credit for a "maximum" of seven years. See Old Delinquent Accounts
for warning and explanation of how you can unwittingly restart this clock. However,
this does not mean that you never pay these debts. While discussing
negotiating with creditors covered in Chapter 4, you will read how to include
in your negotiated settlement a provision for how it is to be reported. To
not do so can severely hurt your chances of restoring your good credit. Myth:
Credit reporting agencies are empowered with governmental authority. Fact: Absolutely Not! Rather, they must adhere
to the government authorities and laws overseeing their operations. Credit
bureaus are like any other business. They buy and sell products and services
to turn a profit. No special authority exists. Myth:
Bankruptcy is a "Fresh Start." Fact: Unfortunately, many attorneys don't
clearly explain the devastating effects to one's credit when filing
bankruptcy. This goes for all types of bankruptcy including Chapter 13, wage
earner. Bankruptcy
is not a clean slate. Every account included in the bankruptcy will be so
noted in your credit file. Additionally, there will be a court record
generated that will also be added. Avoid bankruptcy if at all possible. The
time table and the odds of completing credit restoration are greatly extended
due to the number of negative entries that are associated with such filings. Myth:
Some types of credit information (such as bankruptcies, judgments and
foreclosures) are impossible to remove. Fact:
Although it is true that some types of information can be more difficult than
others to remove, each of these negative entries have been removed thousands
of times, using a multitude of creative methods. Myth:
Credit repair is too complicated to do myself. I would have to hire an
attorney. Fact: In some cases involving a stubborn
situation, an attorney can be of great assistance. An attorney can also help
with clarifying the finer points of your state's laws. However, you can
accomplish most if not all of the legal and negotiation-based methods in this
report yourself by becoming familiar with your federally given rights and how
to enforce them, as well as other creative methods employed by consumers. Myth: It
is illegal to have truthful information removed from your credit report. Fact: Congress has already set the precedent
by making special provisions for the removal of correct information from
individuals' credit files by fulfilling certain criteria. Congress realizes
that dangling that carrot in front of college students encourages repayment
of defaulted student loans. It should come as no surprise that creditors in
other financial markets are hip to this. Let's face it; congress had to get
the idea from somewhere. Right? If
you need more proof, read section 609(c)(2)(E) of the NEW Fair Credit
Reporting Act that President Clinton signed in September of '96. "...a
consumer reporting agency is not required to remove accurate derogatory
information from a consumer's file, unless the information is outdated under
section 605 or cannot be verified." Notice
the wording above, "is not required to remove." It is very
interesting that the law does not say that accurate information "can
not" be removed, but only that the credit bureau is not required to.
Now, there is law that says a creditor can not knowingly add wrong
information to someone's file, but the subject of removing accurate
information is mysteriously avoided. The truth is the FTC and the bureaus
themselves spend a lot of money trying to convince consumers otherwise. Why?
Lobbyists and money of course! It makes more work for the credit bureaus,
thus increasing their labor costs. Bureaus save millions of dollars a year by
convincing consumers that the consumer is virtually powerless. But congress
worded things to leave the door open, and in at least one case drafted law
allowing for it, specifically. Fortunately,
creditors make their profits by collecting from their customers, not
reporting negative credit information. Many creditors, though, have an
agreement with the credit bureaus that they will not allow a negative listing
to be deleted upon settlement. Larger creditors, such as huge credit card
companies or banks will require more pressure before they will agree to
delete a negative listing, but virtually every creditor will give in with the
right amount of convincing. Every creditor who reports to the credit bureaus
can also change the information they report. In most credit organizations,
there are several managers with the authority to make changes on the credit report. Bottom Line: Anything a creditor is responsible for
reporting and confirming, a creditor can change. |
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3. Negotiating with Creditors to Save Your Credit As
effective as [Tier One Methods] may be, they do have their limitations [text omitted]...In cases where your story
conflicts with a reporting creditor, the credit bureau is going to side with
the creditor--unless you have strong documentation of the error. The
bureau will inform you that their reinvestigation is complete and if you disagree
with the outcome, you can record a 100 word statement telling your side. You
are a long way from done, however. Such a statement is to concede defeat. You
still have a few more punches to throw. Tier Two
of your defense system is to aim directly at the source, the reporting
creditor. These
methods are disclosed with two assumptions: a) the reader is a person of
integrity and would not use these methods to commit fraud, and b) the reader
is working with very limited financial resources, and must get the maximum
return in exchange for dispersing those resources to numerous creditors. VITAL ASSESSMENT OF YOUR SITUATION If you have a
little cash to throw at your credit problems, you should be able to make good
progress with negotiations. Negotiating with the original creditor
creates a win-win situation where the creditor gets a good chunk of the
principle back, and you get an improved reporting of the debt in your file,
plus a reduced settlement in many cases. NOTE:
You must negotiate with the firm that reported the item on your credit file,
be it a collection agency or the original creditor. Only they can change the
reported status of the account. To negotiate with the collection agency is a
waste of time unless they are the name on your file. [text omitted]...Negotiations will take some cash to accomplish,
but the good thing is it's a permanent fix. And it is the most ethical if
there is money still owed. When
evaluating your options and the firmness of your negotiations, there are
several factors that you need to consider. 1)
Accuracy and Proof First,
look at the accuracy of the information. If you can prove the information is
incorrect with your documentation, then you can afford to be very firm in
what you demand. On
the other hand, even if the information is incorrect, but you can not
document that fact, then you must take basically the same negotiating
position as you would if you were attempting to remove accurate, yet
negative, information. That would be to posture yourself as an amicable, good
person trying to overcome the aftermath of negative circumstances through
negotiations. In other words, you are trying to go back and, to the
best of your ability, historically undo a very difficult time in your life. 2) Type Is
the debt secured or unsecured? If
secured, that means that the creditor has possession of an asset, or title to
an asset belonging to you. In matters such as this, you have less
leverage--with the exception of disputing inaccurate information. But in
situations where you are attempting to link the size and haste of your payoff
to "how the creditor will report it on your file," you have
virtually no leverage. The creditor can just seize and sell your asset in
most cases. If
the debt is unsecured, then it's a whole different ball game. Most consumers
overestimate the risk involved with overdue debts. They worry about possible
repercussions such as wage garnishment and property seizure by their
creditors. The fact is very few creditors will push all the way to a
garnishment on a small unsecured debt. Garnishments
and seizures are most often used as mental leverage to gain an emotional edge
over the debtor using fear to help collect past due debt. The reality
for creditors is they are expensive and time-consuming. Even if the creditor
went all the way to recover the debt, they probably wouldn't be able to
recover enough to offset their collection costs. At
the same time, you need to be aware that the creditor does have the right to
pursue these remedies there are some risk of financial reprisals when a debt
goes unpaid. It just doesn't happen very often. These
consumers are so intimidated by their creditors that they flee to bankruptcy,
even though bankruptcy can bring total financial devastation for at least the
next ten years... 3) Size Consider
the size of the debt. The smaller the outstanding balance, the greater your
odds for success because it becomes less cost effective for a creditor to
pursue. Most creditors will not devote a lot of effort to collecting just a
few hundred dollars. However,
if the amount is less than two hundred dollars, a creditor may not even
devote the effort to negotiate. 4) Age You
also must consider the age of the debt and its status. Eventually, a
creditor will give up an attempt to collect on a debt, and in order to gain
some financial benefit will write it off as a loss and take a tax deduction.
This is referred to as a charge-off or a profit & loss. If
this is an old debt that was charged off by the creditor, it doesn't mean
that you no longer owe the debt; it simply shows that they have given up hope
of collecting it. The creditor may then collect on the debt themselves, sell
or assign the debt to a collection agency, press for a judgment and
garnishment, or temporarily ignore the debt. Most often this is the end of
it. However,
a recent delinquency will be treated with urgency and pressure by the
creditor. It is helpful for you to understand the motivation of the original
creditor to settle. If
they turn the account over to their collection agency, there are certainly no
guarantees that the amount will be collected; and even if it is, they will
have to share it with the agency. They
may get considerably less than what you're offering now if you file
bankruptcy. If they don't work with you, and you're in a critical situation,
let them know that they are going to force you into bankruptcy. If
they take legal action and get a judgment, they risk getting nothing, or it
may take years before they get a penny. Most
creditors would much rather have something guaranteed than pursue the expense
of legal action with a risk of getting nothing. A few states won't even allow
anyone to garnish wages which means they would have to wait until you sold a
major asset and had to clear the title before they could enforce their
judgment. This is referred to as a debtor's state, meaning the debtor is at
an advantage. For this reason, and the daunting cost, the majority of
creditors just charge off a bad account as a business loss after a few months
in the hands of a third-party collection agency. They then report it on your
credit as such and leave it at that. Occasionally,
a beginner in the collection agency industry may offer to purchase their
charge-offs. So it is possible that an agency may call you after a year or
even two years of silence. Realize then that they are not collecting on
behalf of your original creditor; they simply took a gamble by purchasing a
batch of old bad accounts dirt cheap to try to make some money. 5)
Recent Payment History It
may sound strange at first, but if you have been paying your bills on time
recently, the creditor will be less inclined to settle for less. The logic
being that they are getting their money now anyway. If you have been
chronically late and it looks like you could go belly-up any day now, then
they will sense a real potential for loss and be much quicker to accept a
reasonable offer. This
is by no means meant to imply that you should stop paying your bills so that
your creditors will be more likely to settle with you. This is merely to help
you access your negotiating position as affected by your most recent payment
record. 6) Also,
major considerations are things such as the laws of your state, as well as
your prognosis of your ability to repay the debt at some point in the future.
Will you have more money to put toward the problem in the near future, or is
this as good a shot as you're likely to get? [Text omitted] ...The point for you to remember is that you don't
have to (and you won't) win them all. Just a portion agreeing to a settlement
will allow you to turn things around. And the truth is that most types
of unsecured accounts will change the way a debt is reported and treat a
partial payment as a full settlement. This includes: department store cards,
credit cards, medical bills, personal loans, collection accounts, student
loans and amounts remaining after a foreclosure or repossession, and bounced
checks. |
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4. The Principle Of Prioritized Outcome The following discovery is
one of the most fascinating and enlightening truths that a person can
uncover. Time after time, I have watched individuals swell with an immediate
sense of empowerment after grasping this simple, yet profound truism. It is
not enough just to understand this principle. If you do not absolutely own
this nugget of wisdom and cooperate with it, you will never experience
sustained financial success. Unfortunately, 90 percent of
the people in this country today do not have the foggiest understanding of
the principle of prioritized outcome, or they refuse to learn the lesson it
is endeavoring to teach us. They mumble about their money shortages, cite
many causes of their affliction, but the outside observer, who has gained
this understanding, can quickly spot the true source of their financial
failure. Observation of such an individual's associates, spending habits,
frequented establishments, and even normal conversation, soon reveal a person
who's priorities are turned upside down. We absolutely must find out
what makes us "tick." There are undeniable, though often subtle,
driving forces that influence each and every daily decision that we make. As
a matter of fact, our lives could be simply defined as a continuous string of
choices, one right after the other. Granted, that's not a very
glamorous-sounding definition of life, but it is a very accurate one. What
time will I get up? What will I wear? Will I eat breakfast? What will I eat?
And that's just to get the day started. If you were to ask, very few
could spontaneously answer the most important question of all,
"Why?" Most people can not explain the rationale that they use to
make the simplest of daily decisions. It takes place habitually at a
subconscious level of the mind and is rarely exposed, much less understood,
unless it is seriously challenged. When a person is forced to seriously
ponder the driving motivation deep within that is influencing the majority of
his decisions, he comes to the realization that his external circumstances
are not the result of "pot luck" or "karma." At the same
moment of this startling discovery, it becomes painfully obvious just where
his priorities have truly been focused as the acceleration down that path
looms evident. Sure, ever changing
circumstances are determining the parade of choices with which we are faced.
But before this current parade of choices, there passed a prior. It was the
choices that we made on the day of that earlier parade that largely dictated
the choices from which we will be able to choose today. In examining today's entrees
you may notice there are one, possibly two, choices that seem unexplainable
or untraceable--totally unexpected. But such choices are seldom, and it may
be that we just lack the wisdom to accurately look back and see what brought
them. However, the vast majority of today's decisions were determined by the
results of yesterday's, and the day before. That means there are some
dreaded decisions that we will not have to make today, because we selected a
previous choice that postponed it, deleted it, or satisfactorily solved it. On today's menu there are
other choices that we would like to be there, but they are not. That's right.
They're not there now, because we didn't make the right choices over the last
month, the last year, or the last ten years, to line up circumstances that
breed such coveted choices. These choices are relative
to each individual, but perhaps one may be a decision such as where to spend
the summer. In your beach house in "What about those who
inherited it?", you may ask. Then someone in their
family, perhaps their parents, made those good decisions which not only
benefited themselves with such a parade of choices, but brought many of the
same blessings to their children. And just as sure as the parents' good
choices are now benefiting their children, the now-grown children will
eventually lose those inherited choices if they do not continue the same,
good decision-making process that their parents wisely embraced. This helps explain why a
majority of lottery winners end up broke, again—many just within months of
winning thousands of dollars. They are suddenly faced with a great mélange of
completely foreign choices. They never have learned how to make decisions
that make money. That's why they didn't have any before. Most likely, their
parents didn't either. When such fortune is suddenly thrust upon them,
without ever learning the fundamental principles to acquiring and managing
wealth, it slips right through their fingers via poor judgment. The wiser
winners realize that they are suddenly out of their element and hire a
competent CPA or financial planner. How would most people answer
the following question? If you could become a millionaire, would you prefer
to have achieved your wealth by winning a lottery or by working hard for it? Your life will never be the
same once you fully grasp the understanding that you, and you alone,
overwhelmingly determine your external circumstances through your daily
internal choices. So many people dream, pray and wish for things to get
better financially, not realizing (or even outright denying) that they have
control and are at that very moment making decisions that are guaranteeing
there will be no changes for them except for the worse. Many others have been taught
that they really don't have control. It's not their fault; they're victims of
circumstance. How sad to teach a child that they are permanently destined to
any predisposed condition because of circumstance. Such a child will grow up
blaming people, places and events for his own shortcomings, just as he was
taught. He is doomed to a life of bondage. A prison built not of bars, but of
illusive "dream stealers." "I could be somebody, if my father
would have stuck around to help me," he might say. Or, "I could
catch a break and get out of this neighborhood, if I had been born another
color." Perhaps, "I could make a lot of money if my parents hadn't
been too poor to afford me a good education." Or, "I too could
become successful in my own business if I didn't have this disability."
All of these circumstances are difficult, and this life is not totally fair. Everyone does not get to
start on an equal keel, but everyone does have the raw ingredients to better
themselves in proportion to the amount of focused energy they expend toward
that end. Those with more challenges to overcome will have to exert more
effort and more resolve, but they are fully capable of achieving equally
satisfying results. But they will never even try if they have been convinced
that their life's outcome is not, and has never been, their responsibility.
They have no control in such a case. They are powerless to change anything.
How can they change anything? In their mind, it's not their fault. They have
surrendered! One thing is certain. When
you understand that any final outcome is "your fault," you've
recognized and properly assumed your power to alter or change that outcome.
You didn't have control of your starting position, but you have a great deal
of control over your finishing position. Some educators are attempting to
remove individual responsibility by removing the concept of "wrong"
and "failure." In so doing they are removing individual freedom. What is more humanly
desirable than individual freedom? Freedom is not free. Freedom has a price
tag. And that price tag is individual responsibility. Accepting and embracing
the one gives you clear title to the other! An individual who has bought
into the losing "out of my hands" philosophy must find a way to
breakout of the prison created by his old, molded thinking and begin making
new choices. The starting point is to first become aware. From there, it could be
launched by something as simple as making the decision to pick up a financial
self-help book instead of a shopping catalog. The information in the new
book begins to create a new pattern of thinking that begins influencing other
decisions. Further down the road, instead of applying for a vacation loan,
he's now applying for an education or business loan. If this benevolent
"mental virus" continues to grow in this person, over time he will
find himself surrounded by a whole new set of choices--many, more pleasant
choices. His life is now becoming
more like the one he used to dream about. It's a new life and it all started
when he realized for the first time that the overwhelming majority of
unwanted circumstances affecting his life were the result of a flawed
decision-making process, either his own, his parents, his teachers, friends,
or all of them combined. Although the initial
reaction may be a gasp followed by a gnawing pit in the stomach area,
afterward, there is a grand reward for discovering and courageously accepting
that we are ultimately responsible for our surrounding circumstances rather
than vice versa. That reward is the sense of control that we gain from
understanding that "cause and effect" must work both ways. If wrong priorities
yesterday led to a flawed decision-making process which then materialized as
unwanted circumstances today, then by reorganizing our priorities now, we can
change the result and ultimately the circumstances for all of our tomorrows. But before we can correctly
evaluate our current set of priorities, we first must understand what the
possibilities are. How many different reasons can there possibly be that
motivate an individual in the millions of choices that individual will make
in an average lifetime? Two hundred? Five hundred? One thousand? Yes, you may
be able to come up with hundreds if you begin defining them as specific to
each type of situation, but that type of specific breakdown isn't necessary.
Every motivation that drives you, and everyone else on earth, could be
categorized under one of only four general motivating desires or needs shared
by all men and women. The Four Motivating Ps Fortunately, there aren't two
hundred possible answers to the question "Why?" No, there are only four. And
they are easy to remember because they can each be labeled with words that
start with "P." Every single thing, big or small, that you do from
the time you get up until the time you go to bed is due to one, or a
combination of, the following motivating factors:
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5. Do Credit Inquiries Hurt You? At the
end of each credit report will be a log of inquiries. An inquiry notation is
made each time someone requests a copy of your credit file from that credit
bureau. Any company that receives a copy of your credit profile will be
listed under this inquiry Section of your report. Lenders
don't like to see a lot of inquiries on a credit report. Excessive inquiries
can result in a credit denial as easily as bad credit. Thus, you will need to
verify the type of inquires made and take steps to remove any unauthorized
inquiries. Not all inquires are viewed negatively. In fact several types of
inquires will not appear on any copy of your file except for the copy you
receive. *There
are six origins of inquiries: Your Existing Creditors (okay) Yourself (okay) The Bureau (okay) Potential Lenders (negative) IRS (negative) Anyone who has a judgment against you (negative) Although
inquiries will remain on your file for up to 2 years, those in the last 6
months will count most heavily against you. Therefore, you should review the
log to make certain that each inquiry was done with "permissible
purpose" as explained in Section 604 of the Fair Credit Reporting Act
(FCRA). (See Appendix R) The FCRA
defines the "permissible purposes" for which consumer credit
profiles can be provided to others. A credit report may be supplied if it's
to be used for: Credit
granting considerations *The new
FCRA, enacted in 1996, allows the FBI to access consumer credit reports in
connection with an investigation of issues such as counterintelligence. So
unless someone fits these categories, they should not be viewing your credit
file. Anyone who knowingly and willfully obtains a credit report under false
pretenses may be fined under title 18, United States Code, and imprisoned up
to two year. Use the
sample letters in Appendix D and Appendix E as a guide to dispute any
unauthorized inquiries into your credit file so that they can be deleted form
your report. If you don't have a lot of items to dispute, go ahead and send
your letter to the credit bureau. However, if you know you are going to be
sending the bureau several letters on other items over the next few months,
you should try to take care of this with the creditor who requested your
file. If you can take care of it by having them contact the bureau directly
and deleting the request, then it is just one less letter you will have to
send to the bureau yourself. Your
letter of course will argue for the removal of the inquiry based on the
assertion that... |
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Layperson's
Summary:
False Or Misleading Representation A
creditor may not use deceptive or misleading means in an effort to collect a
debt. 1)
Falsely implying that he is an attorney or government representative. 2)
Falsely implying that you have committed a crime. 3)
Representing correspondence as being from an attorney when it is not. 4)
Implying that nonpayment of any debt will result in loss of personal
property, wages, or arrest unless (a) it is lawful and (b) the creditor
intends to follow through with such action. 5)
Threatening to take action that is not legal or that the creditor does not
intend to take. 6)
Implying that the transfer of interest in the debt to someone else will
result in any of the actions in number four. 7)
The false representation that you committed a crime in an effort to disgrace
you. 8)
Misrepresenting your credit or failing to communicate that you are disputing
a debt. 9)
The use of written communication which simulates or is falsely represented to
be a document authorized, issued or approved by any court, official or agency
of the U.S. or any state, or which creates a false impression as to its
source, authorization, or approval. 10)
The use of any false or deceptive means to attempt to collect a debt or
obtain information about a consumer. 11)
Failure to disclose clearly in all communication that the debtor is
attempting to collect a debt and that any information obtained will be used
for that purpose. 12)
The false representation or implication that accounts have been turned over
to innocent purchasers. 13)
The false representation or implication that documents are part of the legal
process. 14)
The use of any business, company, or organization name other than the actual
name of the debt collector's business. 15)
The false representation that papers being sent to you are not legal process
forms when they are. 16)
The false representation that a debt collector is employed by a consumer
reporting agency. |
