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Credit Report,Credit Repair,

Using the Law For Credit Repair

February 2, 2011 – 10:40 pm

You Need Leverage

Credit repair results are best accomplished with leverage. There is little use in engaging the massive credit reporting system without a clear and precise knowledge of the areas where you will be able to gain a foothold. The system is cumbersome and prone to indolence. Where there is no advantage to the credit bureaus to comply with your credit repair efforts they will certainly find a way to ignore even your most heartfelt pleadings. But use the law properly in your credit repair and you will move mountains.

Expect Resistance

The credit bureaus are governed by the Fair Credit Reporting Act (FCRA). It is both their gospel and a millstone around their neck. Most of the effective credit repair techniques that you will employ will utilize the routines and procedures mandated for the bureaus by the FCRA. And although the bureaus generally will comply they will not enjoy it and they may even resist. Your efforts must be made with an insight into the procedures that the bureaus have put into place in order to cooperate with the FCRA as well as their passive-aggressive techniques of resistance.

Section 611

The most relevant part of the FCRA to your credit repair project is Section 611. This outlines the responsibilities of any national credit bureau, including Experian, Equifax, and TransUnion, to process consumer disputes of the accuracy of information appearing on their credit reports. In brief, the credit bureaus must complete the processing of your dispute within 30 days of receiving the dispute. Within that 30 day period is included 5 days in which the credit bureau must notify the furnisher of the disputed information.

Two Sides to the Law

The FCRA is not specifically a consumer protection act. It is best as you begin your credit repair project to understand that the FCRA is designed to protect the credit bureaus as much as provide a mechanism for consumers to rectify inaccuracies. All of the requirements imposed on the bureaus are accompanied by an overt acceptance that any methods of quality control implemented in response to the FCRA need only be reasonable. Both the FCRA as well subsequent FTC Staff Opinion Letters have supported the concept that the economic viability of the bureaus must not be threatened.

Credit Repair Reality

And so, your credit repair project must quickly grapple with reality. The system put into place by the bureaus to process your disputes is not perfect or flawless. And to add to the ineffectiveness that your credit repair may encounter is the business side of the formula which cannot be ignored. Where the bureau is able to ignore or subvert your efforts and get away with it, they may do so. For example, millions of consumers have experienced the rejection of perfectly constructed dispute letters accompanied by clear and adequate identification. The response received will often state that the identification was either not included, or in some way lacking. You should plan on a degree on resistance and calmly adjust your efforts accordingly.

Your Roadmap to Success

In employing Section 611 in your credit repair effort to remove reporting errors you should keep all of this in mind and proceed with patience and you will succeed. Deal with the system as it is. Frustration is not be productive in dealing with these giant bureaucracies. Here is a roadmap to the land of credit repair success along with some additional insights into the process. It is simple and painless if you do it right.

The Simple Way

Keep your disputes simple. The credit bureaus have managed to comply with the FCRA by defining a very small list of dispute reasons. The bureau dispute centers are mostly located overseas and staffed by personnel who are trained to very quickly translate your letter into a two digit code representing the nature of your dispute. If you want your credit repair effort to bear fruit, consider the process and make your letter as clear and simple as possible. Extraneous words will only increase the possibility of getting derailed.

Destined for Success

Don’t give up! As hinted at, the bureaus may very well manage their work load by indiscriminately ignoring or rejecting your dispute. You cannot afford to let a rejection stop you in your tracks. You will quickly discover that persistence pays off. If you know that you have a valid case stick to your guns and rebut any rejection that you get. One of the great secrets to dealing with these bureaucratic behemoths is patience. Take one step at a time. Your credit repair is bound to succeed.

Copyright © 2009 Ian Webber. All Content. All Rights Reserved.

Ian Webber is an expert in consumer law and credit repair. Ian is a graduate of the London School of Economics and The University of Chicago where he earned his LLM. Ian consults with one of the leading online credit repair services and is currently based in Florida.

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Credit Repair Blueprint - Part 2

February 1, 2011 – 8:20 pm

In the previous article of this series I talked about how important it is to get copies of your credit report from each of the major credit reporting bureaus. I explained the various sections of your credit report and how to read it. The FICO score was discussed and why it’s the only score you need to worry about. If you haven’t already procured copies of your credit reports and FICO scores from each bureau, look at my previous article to find out the best place to get these. It will be hard to start repairing your credit without these things.

There are two rules of thought in fixing your credit. Start building new credit and getting rid of the negative items. I will break these down and I will give some ideas for both.

One of the easiest ways to add new credit is applying for a secured credit card. Everyone is eligible for this card and it’s a great way to start building new credit. If you are like the rest of us (yes me included) who’s credit has gotten hammered in the last couple of years, this may be your only choice. A secured card is different from a normal credit card in that you will have to deposit money into the account and pay a small application fee. The key to making these cards work will be to make sure they report to the major credit bureaus. This way you can start making purchases on the card and begin making monthly on time payments.

This leads me to the next subject which is keeping the proper debt to credit ratio on your revolving credit. To explain further, if you have a credit card with a $3000.00 credit limit and you owe $1500.00 on this card, your debt to credit ratio would be 50%. Believe it or not, maintaining a small balance on your credit cards will improve your credit score, where paying the card off each month can have a negative affect on your score. The reason for that is the way your score is calculated. Lenders want to see that you can make monthly payments and hold a balance on your credit cards. It’s how they make money, and it’s built into the credit score algorithm to look for this. Keeping a 25 to 35% debt to credit ratio will begin driving your score up.

Removing negative items from your credit report is a more complicated subject. Enter the Fair Credit Reporting Act to your rescue. This law was passed to help the consumers. The FCRA says that the consumer can dispute negative items found on their credit card deemed to be inaccurate. Presented in the correct fashion to the credit bureau will prompt an investigation from the credit bureau to look into this inaccuracy. The credit bureau has 30 days to investigate the matter and if it can’t be resolved than the negative item will be removed from your report. This is one of many techniques used to remove items from your report, so use it correctly.

We have briefly covered some of the techniques used to build new credit and remove the items that are having a negative impact on your credit score. Please visit my website for more detailed information, articles and forms to get started towards raising your credit score. Good luck!

William Lingle is the owner/operator of Clever Credit Repair - and author of the free e-book “40 Credit Repair Secrets”. Please visit my site for a unique approach to learning credit repair. We will arm you with the best quality information, articles and resources to repair your own credit as good or better than any professional service can offer. Please check my review of the best secured credit cards for building new credit.

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