Roger Passman asked:




In my work I speak to many people that have unrealistic, almost grandiose, ideas about repairing their credit. My response to the person whose expectations exceed the limits of the possible is to send them to someone else. One of the factors contributing to damaged credit in the first instance is that attention is not paid to the possible allowing grandiose ideas to stand in the way of sound financial planning.

When working to repair one’s credit there are three factors that must be considered. First, is the item you would like removed from your credit report legitimate? If it is it will generally stay a part of your report until time takes care of the item. Secondly, how old is the item you would like removed? The further away from the present the item is the less it impacts your FICO score. Finally, what has your credit history been in the past 12 to 18 months? If potential creditors see a pattern of on time payments and sound financial practices, it is more likely that they will offer additional or new credit even if your score remains somewhat damaged.

Credit repair consists of two important stages, both of which mirror the concerns mentioned above. The first stage is to work to remove inaccurate or mistaken information from one’s credit report that have an adverse impact on one’s credit score. Some items may look bad but have little effect on one’s overall score. A tax lien, for example, that has been discharged may continue to appear on one’s credit report for up to ten-years and, under some circumstances, even longer. But that discharged lien has a low impact on one’s overall score and may not be worth the effort to try and remove it. A pattern of late payments, on the other hand, may have a high impact on one’s score and may well be worth the effort to remove or re-age if removal is impossible.

The second stage in credit repair is to make sure that from the moment one begins to actively repair one’s credit that no additional adverse be recorded on the credit report. Not only does that defeat the purpose of the credit repair effort, it sends up red flags for the credit bureaus to not take your repair efforts seriously. That is the last thing one wants when working to restore one’s credit score to acceptable numbers. This stage requires a change in lifestyle, as one must relearn sound fiscal habits that will assure no additional adverse information be recorded by the credit bureaus.

Effective credit repair seeks to eliminate inaccurate, mistaken and unverifiable adverse information from one’s credit report. It cannot remove items that are legitimate, verifiable and true. To claim otherwise is unethical and may even be illegal.

Victor

john c asked:


I was told by a credit repair attorney, they estimate by your job title, which is wrong, because i have several sources of income that is not listed on my credit report. Does anyone really know the answer?

Kelly

Benjamin Robert Ehinger asked:




Are you in need of some credit repair? This is for about 95% of all of us because we are all struggling with our credit at some point in our lives. This is the problem with credit and it is easy to blame the creditors or to just file bankruptcy and start over, but there are better answers. Here is another option to how to improve your credit score.

First, get your credit report. We are all entitled to a free credit report once every year from all three of the reporting agencies that are out there. You really need to check your credit once every 3 months or so or you can hire a credit monitoring service to update you anytime something new is added or changed on your report.

Second, your next step will be to put together a plan to get your debts in order and this must be done correctly. You need to put the debts that you are paying on time on the top of your list. These need to be paid on time continually and first. Next you need to list your past due debts from smallest to largest because the largest debt hurts your credit just as much as the smallest if they are both past due.

Third, now you need to pay your debts. Start with that small one and get it off your credit. That is how to improve your credit score and do it in a hurry. Go through the list and in a few months you will find that you can get three, four, maybe even more debts off your credit and see your score start to climb. This is the best way to deal with your credit score.

Last, you can also go get a small loan or a credit card with a small limit. Pay the loan on time or if you decide for a credit card, then pay the bill off every month and only use it for a little bit, like gas each month. This will improve your credit score pretty fast and within a year or so you will be in a better place as far as credit is concerned.

Brenda

Jim Kemish asked:


Are you under the impression that there is some relationship between the credit bureaus and the government? Credit repair expert Jim Kemish offers some insights.

Not a Friendly Service

In a recent blog entry I wrote, “Significant legislation has been enacted to protect you from the impact of the credit bureau’s inaccuracies. The right that you have to receive copies of your three credit reports for free on an annual basis is not a friendly public service by the credit bureaus. The bureaus have been required to provide this service as one of the protective measures included in the Fair and Accurate Credit Transactions Act. Your credit report can have a major impact on your financial life. Give your credit the attention that it deserves and review your reports regularly.”

A Reader Responds

A reader responded by asking, “I’ve read that the credit bureaus are regulated by the Federal Trade Commission. Doesn’t this indicate a relationship with the government?” Below is my reply along with some additional thoughts on the subject.

The Credit Bureaus are Not Government Agencies

I replied that, “The relationship between the credit bureaus and the government is the same as the relationship that you have with the government. Because your actions are conscripted by law does not in anyway suggest that you are necessarily a law abiding citizen (although I’m sure that you are!). As many people live in a constant adversarial relationship with the government, so do many large businesses. The credit bureaus happen to be constantly at odds with the law. Given the potential impact that credit reporting errors can have on your financial life, I strongly suggest that you modify your opinion of the bureaus enough to be very cautious of the content of your credit report.”

Strictly For Profit

One of the unfortunate underlying assumptions that people, like the above reader, have in their attitude towards the credit bureaus is that the bureaus have some form of official status. This could not be farther from the truth. They are strictly for profit businesses. Experian and Equifax are publicly traded companies and list their revenues in the billions of dollars. Trans Union is a privately held company with revenues estimated also in the billions. The three credit bureaus have maintained a consistently adversarial relationship with the government and consumers throughout their histories.

An Adversarial Relationship

An adversarial relationship with the public is not unusual for large businesses. All activities are chosen for the purpose of producing profits. The history of lawsuits brought against the bureaus over time paint a clear picture. The office of the Attorney General of Florida is currently pursuing action against Experian relating to misleading claims, deceptive advertising, a misleading domain name (freecreditreport.com), and failure to honor cancellations to their credit monitoring service offered through this so-called free credit report website.

A History of Conflict

The type of behavior described by the Office of the Attorney General of Florida is consistent with countless charges against the three bureaus. In the 1970s Equifax was charged with rewarding its employees for collecting negative information on consumers. This charge, which resulted in a consent decree, provides an interesting hint about the corporate culture.

Experian Gets an “F”

In 2006 a leading consumer advocate website rated the customer service offered by the three bureaus. The ratings were dismal including a grade of “F” given to Experian, who was sited for not even providing customers with a customer service telephone number. Credit repair is not on the priority list at the credit bureaus!

Nothing Has Changed

The above mentioned consumer advocate site has a current post that says, “With the 2003 amendments to the FCRA, and the introduction of the FACT Act, millions of consumers will see the quality of their credit reports degrade even further. FACT stands for Fair and Accurate Credit Transaction Act, but in reality it is just our government trying to appease millions of consumer who complain about the current credit reporting industry. But they are only appeasing us in name only…”

The Forces at Work

We have been assisting our customers with credit repair since 1989 and as such have dealt with the three bureaus on a consistent basis. There are two major forces at work that shape the behavior of the credit bureaus. The first major force is the need to maximize and protect profits which may result in decisions about operating policy that are not in the best interest of the public. The second force that conspires with the profit motive is the sheer bulk of data that the credit bureaus are trying to manage and maintain. The result has been widespread and serious errors on consumer reports combined with a horrible corporate bureaucratic resistance to fixing the problem. So check your credit reports regularly.

Copyright © 2007 James W. Kemish. All Content. All Rights Reserved.



Jose

Chane Steiner asked:


First of all, take a few deep breathes. OK, now let’s get started. Forget about everything you’ve heard about credit repair; the scam stories, the “it doesn’t work” stories…get all of that out of your mind, because it absolutely works and it’s not that difficult at all. Have you ever noticed that the people telling you that credit repair doesn’t work usually have pretty bad credit themselves and haven’t had good credit in a long time? Just something to think about.

Credit Reports

You know you have bad credit, because you can’t get approved for any loans that you apply for, but that’s not good enough. We need to know exactly how bad it is, so let’s get a copy of our credit reports. As you probably already know, there are 3 major consumer reporting agencies (credit bureaus), Equifax, Trans Union and Experian. You will need to get a report from all 3 of them. The best way to do that is to get them separately from each credit bureau. You can do that over the phone or by mail. You can also get your reports through a credit monitoring service.

You can also go to AnnualCreditReport.com and order your reports for free from there, but if you do that you give the credit bureaus an extra 15 days on your investigations. You don’t want to do that. Pay for your reports.

Dispute Negative Items

Under the Fair Credit Reporting Act, you have the right to dispute any information contained on your credit report. This is simply done by writing the credit bureaus a dispute letter. Once they receive your letter, they are required to verify the information with the furnisher. They have 30 days by law to do so. If the information cannot be verified, it must be deleted.

Many people will tell you that if the account is “really” yours, you can’t dispute it. However, if you read the FCRA, it doesn’t say anything about that. Whether or not the account is “really” yours has no bearing on the credit bureaus responsibility to verify it. If it can’t be verified, it must be removed from your report. If the creditor can’t provide verification of your account, they can’t legally report it on your credit reports. It’s that simple.

Build Positive Credit

After you’ve cleaned up your credit report, the key to rebuilding credit is to get positive information reporting. Acquiring new positive accounts is just as important as deleting negative information. One of the best ways to do that is by getting a secured credit card. The interest rates are usually pretty high and the credit limits pretty low, but that’s OK because you are strictly using these cards to build credit. Keep your balances at about 30% of your credit limits.

The most important part of the credit repair process is learning from your mistakes and realizing where you went wrong. Learn to live below your means and budget your money so that you don’t have to go through it again.



Kimberly

Ryan J Bell asked:


Credit repair helps thousands of people every year to improve one of the most important facets of their personal finances. However, poor marketing practices and legitimate success stories published in the media have led to many people being disillusioned or misinformed about the repair process and what it can offer. Although no credit product or service can promise gains in your score in a short time period, it is not unlikely for those who are truly in need of credit repair to achieve surprising gains in their score within just months of beginning a program.

Although it is difficult to define exactly who is the perfect candidate for credit optimization, the ideal situation for someone who wants to repair their credit can be roughly explained as follows.

You must be able to stay current on your bills and have finances that are remaining fairly stable. Which means that you are not taking out many new credit accounts or switching jobs. Ideally, you will also have some money in savings account that you can use to pay off any old accounts, or to use in case of unexpected life events. This situation will set you up for the best chance at preserving your newly-cleaned credit.

During the course of optimization, you may also need to open some new lines of credit in order to build positive credit. This is most commonly a secured credit card, but there are other types of credit that can help you build or rebuild your credit.

Unfortunately, part of the misconception about the repair process is that it is some kind of “magic wand” that can cure financial problems instantly. The truth is that if you cannot pay your bills (on time or at all), or are way over-extended on credit, there is almost no purpose to beginning a repair program. Even if you manage to remove some or all of the negative factors on your report it is likely that you will end up with poor credit again after all is said and done. Although it is beyond the scope of this article to discuss over-extended situations, it is likely that someone in this situation would see a bigger benefit from counseling, debt solutions or even assistance from a bankruptcy attorney.

If, however, you fit the bill for someone who is in a good situation to pursue credit optimization it is wise to consider your options before jumping in to any program. As we have discussed, your credit is one of the most important assets in your personal finances and it is important to choose the right method for you.

First, it is important to fully understand your credit situation and what the positive and negative factors affecting your score are. In this way, you can make sure that you are not buying the wrong solution, or worse, some “snake-oil” from someone who is just after your money and not interested in helping you.

The first step to understanding your credit situation is to get your credit reports from all three bureaus: Equifax, Transunion and Experian. Although it is possible to receive one free report every year we always recommend our clients pull a quality credit report which merges all three bureaus and gives you a credit score (the free annual report does not include a score). Many companies will you a free credit report for signing up with their credit monitoring service. These monitoring services are a great idea for anyone pursuing the repair process as they allow you to see how your score is changing as you improve your credit.

If you do not understand everything on your report it is a good idea to seek help. There are many free or inexpensive services that can help explain the items on your report. There are also many books and online guides which can help you decipher the elements of your report.

Once you understand the elements of your credit report it is time to analyze it with a fine-tooth comb. If you are analyzing your report yourself, print it off and mark anything that is inaccurate. Remember, this is your credit score and it affects your life, if you have any doubt that an item on your report is 100% accurate, mark it as inaccurate. The Fair Credit Reporting Act was put in place to protect consumers from errors in their credit, and if you have any question about the accuracy of an entry it needs to be investigated.

Always remember that credit repair can be a very daunting task for the individual that requires diligence and learning. If you feel like you need assistance at any time please seek help. It is important not to make a bad credit situation worse!



Cory

Jim Kemish asked:


Not a Friendly Service

In a recent blog entry I wrote, “Significant legislation has been enacted to protect you from the impact of the credit bureau’s inaccuracies. The right that you have to receive copies of your three credit reports for free on an annual basis is not a friendly public service by the credit bureaus. The bureaus have been required to provide this service as one of the protective measures included in the Fair and Accurate Credit Transactions Act. Your credit report can have a major impact on your financial life. Give your credit the attention that it deserves and review your reports regularly.”

A Reader Responds

A reader responded by asking, “I’ve read that the credit bureaus are regulated by the Federal Trade Commission. Doesn’t this indicate a relationship with the government?” Below is my reply along with some additional thoughts on the subject.

The Credit Bureaus are Not Government Agencies

I replied that, “The relationship between the credit bureaus and the government is the same as the relationship that you have with the government. Because your actions are conscripted by law does not in anyway suggest that you are necessarily a law abiding citizen (although I’m sure that you are!). As many people live in a constant adversarial relationship with the government, so do many large businesses. The credit bureaus happen to be constantly at odds with the law. Given the potential impact that credit reporting errors can have on your financial life, I strongly suggest that you modify your opinion of the bureaus enough to be very cautious of the content of your credit report.”

Strictly For Profit

One of the unfortunate underlying assumptions that people, like the above reader, have in their attitude towards the credit bureaus is that the bureaus have some form of official status. This could not be farther from the truth. They are strictly for profit businesses. Experian and Equifax are publicly traded companies and list their revenues in the billions of dollars. Trans Union is a privately held company with revenues estimated also in the billions. The three credit bureaus have maintained a consistently adversarial relationship with the government and consumers throughout their histories.

An Adversarial Relationship

An adversarial relationship with the public is not unusual for large businesses. All activities are chosen for the purpose of producing profits. The history of lawsuits brought against the bureaus over time paint a clear picture. The office of the Attorney General of Florida is currently pursuing action against Experian relating to misleading claims, deceptive advertising, a misleading domain name (freecreditreport.com), and failure to honor cancellations to their credit monitoring service offered through this so-called free credit report website.

A History of Conflict

The type of behavior described by the Office of the Attorney General of Florida is consistent with countless charges against the three bureaus. In the 1970s Equifax was charged with rewarding its employees for collecting negative information on consumers. This charge, which resulted in a consent decree, provides an interesting hint about the corporate culture.

Experian Gets an “F”

In 2006 a leading consumer advocate website rated the customer service offered by the three bureaus. The ratings were dismal including a grade of “F” given to Experian, who was sited for not even providing customers with a customer service telephone number. Credit repair is not on the priority list at the credit bureaus!

Nothing Has Changed

The above mentioned consumer advocate site has a current post that says, “With the 2003 amendments to the FCRA, and the introduction of the FACT Act, millions of consumers will see the quality of their credit reports degrade even further. FACT stands for Fair and Accurate Credit Transaction Act, but in reality it is just our government trying to appease millions of consumer who complain about the current credit reporting industry. But they are only appeasing us in name only…”

The Forces at Work

We have been assisting our customers with credit repair since 1989 and as such have dealt with the three bureaus on a consistent basis. There are two major forces at work that shape the behavior of the credit bureaus. The first major force is the need to maximize and protect profits which may result in decisions about operating policy that are not in the best interest of the public. The second force that conspires with the profit motive is the sheer bulk of data that the credit bureaus are trying to manage and maintain. The result has been widespread and serious errors on consumer reports combined with a horrible corporate bureaucratic resistance to fixing the problem. So check your credit reports regularly.

Copyright © 2007 James W. Kemish. All Content. All Rights Reserved.



Richard

William Brooks asked:


You may be extended the credit or loan, but at higher interest rates. There are ways to gain back the credit scores you deserve. The first thing you must do is to obtain all three of your credit reports as soon as possible.

Don’t try to get by with only one. You must get all three because each one can contain different data. When you get them, look them over completely with a fine-tooth comb.

Note any mistakes and report them to the bureau right away. Even the slightest mistake on your reports can cause you to have a lower score. Make sure all three reports have the same information as the others.

Discrepancies can also hurt your chances of receiving a good score from the credit monitoring agencies. Sometimes the credit card companies don’t report to all three bureaus, so check and be sure all three have the same facts and figures.

Take a look at the debt that is owed to your creditors. Negotiate with the companies over the debt and get the debt paid off if possible. If they report that the debt owed to them has been paid in full, your credit reports will reflect that positive action and your credit score will be raised.

If it’s not possible to pay them all off, then pay as much as you can on a regular basis. Make sure you’re paying all of your bills on time. Late payments, especially recent ones, get on your reports and are factored into your credit scores as a detriment.

Don’t apply for any more debt until you have all of your old debt paid off. The credit reports will reflect all of the debt that you owe, so the more debt that it shows, the lower your score will be until it’s paid off.

Pay off all your old debt first and make sure that they’re reported to the credit monitoring agencies. Even when you pay off your credit cards, keep the accounts open at least on some of them.

Closing all of the accounts reflects negatively on your score. Even if you don’t intend on using those accounts again, it still looks better that the account is open and there’s zero balance on it.

It also looks better if you charge very small amounts and then pay it off completely each month on time. It shows your ability to repay your debt. Don’t pay another company to take care of your credit repair unless you absolutely know that they come highly recommended.

It’s best you do it yourself. Most of the companies that claim they can repair your credit instantly are scams that will take your money and do nothing for your credit. Work hard to keep it clean and pay off all your bills on time. You can bring a negative score to a more positive one with a little diligence in budgeting for your bills and maintaining a timely schedule.



Jamie

Lara Sawyer asked:


There are many reasons why you should fear identity theft and credit fraud. We receive hundreds of consults each month for credit repair due to issues that have as underlying cause some type of identity theft or credit fraud. It is very important to be protected against these practices if you want to keep your credit sound and your credit score high. A simple credit fraud can destroy the efforts of years on building a clean and stainless credit history. Following are some tips that it is smart to follow if you want to remain on the upper side of the credit rank.

Protect Your Social Security Number

Your social security number is probably the most important identification you have. When forged or used illegally it can cause a lot of harm both to the legit owner and the federal administration or third parties. Thus, it is important to be cautious and avoid providing your social security number when there is no good reason for doing it. As a general rule, you should refrain from providing your social security number to companies that you did not contact you first and, for additional protection, you should run a background check on any company requesting your social security number.

Dispose of Documentation Properly

Any documentation used during applications such as credit reports pulled or filled loan applications need to be archived properly or destroyed if they are not going to be used anymore. This is a significant issue as unscrupulous people make use of this kind of documentation to obtain important personal information for engaging in identity theft. Mail is another source of information that could be used for this purpose and you should also destroy all mails that you do not need to keep. It is important to destroy the documentation or paperwork, shredding is the ideal procedure but in any case, you should dispose of it in such a way that the information cannot be retrieved anymore.

Take Note of All Your Personal And Financial Information and Keep It Safe

Chances are that you have plenty of accounts, store cards, credit cards, and such. If you do, you should take note of all account numbers, credit card numbers, store card IDs, CDs, stocks, bonds, and any other personal and financial information and keep this information printed in a safe place where you can retrieve it easily in case you need to contact the issuers for cancelling the accounts. In case of theft, it is important to cancel credit cards and account or debit cards immediately and have new ones issued to avoid further damages to your credit or finances.

Monitoring Credit And Purchases

Another thing you must do every month is to control your account, credit card and store card’s statements so you can notice immediately when an unidentified or unauthorized purchase was made. Moreover, it is a good idea to hire credit monitoring services to find out if any unauthorized use of your credit was made before it can cause troubles and leave a stain on your credit report



Darrell