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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. Credit reports can also be bought on the
internet.
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.
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 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.
To
dispute inaccurate information on your Equifax, Experian, or Trans
Union credit report, write to the bureau that supplied the
information. In your letter be sure to include:
Your full
name, first, middle and last and including any applicable suffixes
(Jr., Sr., II, etc.)
Your complete mailing address
Your date of birth
Your Social Security number (this is necessary to access your
credit report)
The name and account number of the creditor and item in question
The specific reason for your disagreement with the disputed item
Your signature
Mail Dispute to the credit bureau in question.
Mailing
to all three credit bureaus is best.
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