#4 – Fix Your Credit Report to Boost Your Credit Score

If you want to improve your credit score, you need to go right to the source – your credit report. Your credit report contains the data on which your credit score is based. If you can change the data in your credit report by deleting negative information or adding positive information, your credit score will change to reflect the alterations. For this reason, getting and checking your credit report is the first thing you must do when you attempt to repair your credit score.
Dispute Every Error on Your Credit Report – In a Professional Manner

Let’s say you’ve requested a copy of your credit report from the three credit bureaus, and you find that there is a negative entry or two from your past lenders. Mistakes and errors are not uncommon. 79% of credit reports are believed to contain errors. It could be that the negative information is just plain wrong. The lender may have mixed you up with another person, or the lender reported you still had an outstanding balance, when in fact, you have proof you have paid off the loan.

The address you use when applying for credit makes a difference. If you didn’t use your actual street address, but instead provided a mail box number, UPS store, or similar outfit on a credit application it probably came up in the credit bureau systems as not being a real address.

These are relatively easy problems to fix. Well-written letters to the credit bureaus, with proof of your claim, should correct a simple problem. This is called a dispute letter and once it is received, credit bureaus have to investigate your dispute within thirty days of receiving your letter.

The key to a successful credit dispute letter is a custom written document that concisely and clearly states your case. It has to appeal to the person who will be reading it. Tell your story in human terms and cite specific facts, and you will be much more likely to win. Be sure to include your complete contact information in your letter. Provide your mailing address, email address, home phone number, and even your cell phone number if you want. And if your identity is in question, include copies of two forms of identification with your letter, such as a driver’s license or page from a passport.

Do not quote chapter and verse of the law telling the credit bureau their obligations. The credit bureau investigator knows the clock is running. Also, it never hurts to include the consequences that have resulted from the credit bureau including the inaccurate information.

We have more to say about how easily the dispute investigation process can go off the tracks in Day 5. It turns out that creditors and credit bureaus have a very different definition of errors than do consumers or even the FTC.
Should You Use Automated Dispute Letters

There are companies who offer automated credit dispute letters on their website, for a “small fee” of course. These “boilerplate” letters have a low rate of success. Can you imagine being at the receiving end of this endless stream of almost identical dispute letters? It almost verges on being a spam attack. How would you respond to thousands of machine-written letters? Not well, I suspect.

For these straightforward type disputes documentation that backs up your claim is critical. Do you have cancelled checks or a bank statement that clearly shows payment of a disputed bill? Just how can you send documentation if you use one of those web-based dispute letter mills? You can’t!

It’s still fashionable in some corners of the credit repair business to believe that a consumer can overwhelm the credit bureaus with multiple submissions of the same dispute. That’s a rather preposterous idea when you consider that the credit bureaus regularly process billions of transactions every year. Also, neither the credit bureaus nor creditors are required by law to investigate frivolous disputes. If you continuously dispute the same claim without ever changing the basis of the inaccuracy then your automated dispute is almost certainly frivolous. Although some of these automated forms are better than others they all run the risk of having your dispute tossed into the frivolous trashcan.
Avoid the Credit Bureaus Web Based Dispute Forms

The major credit bureaus now make it possible for you to dispute errors on your credit report online. It sounds good, but those web forms are for the convenience of the credit bureau – not you. For example, if you send a postal dispute letter to a credit bureau they must investigate and respond within 30 days. If you use the web form at annualcreditreport.com the credit bureaus get an extra 15 days and do not have to respond for 45 days. Who benefits from that?

Your entire explanation, no matter how completely you think it conforms to their form, will immediately upon receipt be converted into a two digit code by the credit bureau investigator. He or she must pick the right code for you to have any chance at all of a successful resolution so why limit the information you can provide? Another reason, if you need one, is that the web form does not create a time verified written record. If you were successful deleting a negative item and it showed up again on your credit report a few months later your original written record would save you months of additional aggravation.
NEVER Add a Note to Your Credit Report if There is a Problem You Can’t Resolve – This is the Same as Surrender

Sometimes, there are legitimate reasons why you didn’t pay a bill. If a contractor refused to finish a job or did a poor job, then you may have refused payment, but the non-payment may still count against you on your credit report. If there are any unusual circumstances surrounding your credit report that may affect your credit rating – such as a case of identity theft – you can ask that a note be attached to your credit report to explain the problem.

Sounds good, no? Realistically, when you see something on a credit application that says you will “have an answer in 10 seconds” you know that the decision is being made by a computer based entirely on your credit score. Your 100 word note is not going to be read by anybody.

Actually, it’s worse than that. Your note is an admission of the accuracy of a negative item. It’s difficult enough to remove negative items, why make it worse by verifying that negative item yourself? Save your explanations for when you are face-to-face with a lender.

Most of the Day 4 material is the official line promoted by the credit bureaus, the creditors, and even the FTC. Most consumers will quit the credit repair process at the first sign of resistance – an easy way out – a surrender. Day 5 addresses why you should not surrender. The quick preview is that the credit bureaus can report only what they can prove or verify. Industry experts estimate that 40% of all negative information on credit reports is prime facie not verifiable. As with all things legal, procedure is as significant as substance. Negative information that has not been properly verified cannot legally remain on your credit report – if properly disputed.