Improve Your Credit

Fixing your credit is relatively easy. Anyone can do it without the need for an expensive lawyer or credit repair firm. There are only a few basic steps to it, and they are outlined in this document. Expect the process to take anywhere between six months and one year depending on how "exotic" your credit reports look. Bankruptcies, judgements, and charge-offs are the hardest to deal with, but with enough patience and fortitude, they can be eliminated as well.

OBTAIN A COPY OF YOUR CREDIT REPORTS

One of the first things you want to do to earn better credit is get a good idea of what your credit report looks like. Every year, you are allowed to request a free copy of your credit report from the three major credit bureaus. You can use this site to make your requests:

https://www.annualcreditreport.com/

Alternately (and I recommend going with this option), sign up at www.truecredit.com for their service. There is a cost associated with it, but you get updated credit reports every month, and you can get a good idea of how your credit score is improving while you earn better credit.

DISPUTE ADDRESSES

Once you have copies of all three credit reports, you are ready to begin working on credit repair. The first thing you will want to do is remove all old addresses from the credit reporting agencies' databases. There is a theory that doing so will make it difficult for them to verify tradelines that are associated with addresses that do not appear on your credit report. I don't know how much validity this theory has, but even if it is completely false, having fewer addresses on your credit report will make you look a lot less shifty than someone who has moved to a new address every six months. Try to get your reports down to a maximum of three addresses, with your current address being one of them.

Here are the addresses of the three major credit reporting bureaus:

EQUIFAX
PO BOX 740241
ATLANTA, GA 30374-0241
FAX: 888-826-0573

EXPERIAN
PO BOX 2104
ALLEN, TX 75013-2104
FAX: 972-390-3838

TRANSUNION
PO BOX 2000
CHESTER, PA 19022
FAX: 610-546-4606

To have your old addresses deleted, use the following letter, sent to each credit reporting agency:

YOUR NAME
YOUR ADDRESS

DATE

Dear EQUIFAX/TRANSUNION,EXPERIAN,

This letter is a formal request to remove inaccurate information from my credit
file. The following addresses are not mine, but they appear in my credit file.
Please remove them at your earliest convenience:

1234 Pine Street, Richmond, CA 95847
PO Box 1234, Jacksonville, MS 02938
8596 Vista Court Drive, Apt 310, Seattle, WA 98734

Please delete the above information and reply back with an updated credit report.

Sincerely,
YOUR SIGNATURE
YOUR NAME
DOB: 01/01/1960
SSN: 123-45-6789

The credit reporting agencies should answer back within 30 days with an updated copy of your credit reports. If they don't, send the letter again, wait 30 days, and check results. Repeat as often as necessary.

STATUTE OF LIMITATIONS EXCEEDED?

While you are waiting for the credit reporting bureaus to handle your address deletion request, deal with any debts listed on your reports that may be beyond the statute of limitations for your state. For example, the statute of limitations is 4 years for credit card debt in California. Under no circumstances should you ever pay anything on any of these debts. Legally, you are no longer responsible for paying them. Here is a site that lists all states:

http://www.creditcards.com/credit-card-news/credit-card-state-statute-limitations-1282.php

If any of the debts listed on your credit reports fit this scenario, send off the following short letter to the collection agency or creditor:

YOUR NAME
YOUR ADDRESS

DATE

RE: ACCOUNT 1234567

To Whom It May Concern:

You firm has been contacting me over an alleged $XXXX debt. This debt is too old to
collect.

Sincerely,

YOUR SIGNATURE
YOUR NAME

This very short letter states to the debt collector that you are disputing their ability to collect the debt and that they either have to stop trying to collect on it or prove that it not outside the statute of limitations.

OTHER COLLECTION ACCOUNTS

Now is the time to deal with any other collection accounts on your report. A collection account is an account that was sent to a collection agency from your original creditor or an account that was outright bought (for pennies on the dollar) by a bottom feeder law firm or collection agency. Here is a simple validation letter that you can use to deal with such accounts:

YOUR NAME
YOUR ADDRESS

DATE

RE: YOUR ACCOUNT 1234567

Dear Scumbag Collector,

Enclosed is a copy of my most recent credit report. I have circled a debt that you
are trying to collect. I refuse to pay.

Sincerely,
YOUR SIGNATURE
YOUR NAME

Send this letter to all collection agencies listed on your credit reports while you wait for the credit reporting agencies to fix your addresses.

DISPUTE TRADELINES

For the credit reporting bureaus, whenever you dispute tradelines, the envelopes you use should be hand-addressed and use real stamps, not postage meters. This is important. If you hand address your envelopes, the credit reporting agency assumes they are from unsophisticated individuals and not credit repair firms. They will put them into a "deal with later" pile, and deal quickly with the requests that appear to be from credit repair firms, so that they can get rid of those quickly. They assume that most consumers don't know what they are doing, so they figure they have all the time in the world to deal with your requests, which means that they will most likely take more time answering them, and because of this, they may go beyond the normal timeframe that they are allowed to handle your inquiry. This is good news for you, as they only have 30 days to answer your request. Send a hand addressed dispute letter to Experian, Equifax, and Transunion, disputing as many accounts as needed in each letter. Here is an example:

YOUR NAME
YOUR ADDRESS

DATE

Dear EQUIFAX/TRANSUNION,EXPERIAN,

I am enclosing a copy of my credit report provided to me by your company. Circled
are items that I am disputing. The dispute reasons are as follows:

OCWEN LOAN SERVICING L, ACCT 10029***, NEVER 60 DAYS LATE
HSBC BANK, ACCT 54079150****, NOT MINE
FNB OMAHA, ACCT 4905834****, NEVER 30 DAYS LATE
US BANK, ACCT 549389****, NOT MINE
CAP ONE, ACCT 4305968****, NEVER 120 DAYS LATE
BK OF AMER, ACCT 379****, NOT MINE
CITI, ACCT 4428****, NEVER LATE
FUSA BANK, ACCT 4366****, PAYMENT HISTORY INCORRECT
MIDLAND CREDIT MGMT, ACCT 490583****, NOT MINE
CITIBANK SOUTH DAKOTA, JUDGEMENT 54938372, AMOUNT SHOWN IS INCORRECT

Please delete the above derogatory information as quickly as possible and reply back
with an updated credit report.

Sincerely,
YOUR SIGNATURE
YOUR NAME
DOB: 01/01/1960
SSN: 123-45-6789

If they decline your request or you don't hear back from them within 30 days, send this 2nd letter:

YOUR NAME
YOUR ADDRESS

DATE

Dear EQUIFAX/TRANSUNION,EXPERIAN,

I am very disappointed in the way you handled my initial request to have incorrect
information removed from my file. It does not even appear that you contacted the
original creditor(s), which is very alarming. As you are well aware, federal law
requires you to respond within 30 days. It has now been over that period since your
receipt of my letter. As you are no doubt aware, failure to comply with federal
regulations by credit reporting agencies are in serious violation of the Fair Credit
Reporting Act and may be investigated by the FTC. Obviously, I am maintaining
detailed records of all my correspondence with you. I am repeating my request to
have you delete the the following information from my file as quickly as possible:

OCWEN LOAN SERVICING L, ACCT 10029***, NEVER 60 DAYS LATE
HSBC BANK, ACCT 54079150****, NOT MINE
FNB OMAHA, ACCT 4905834****, NEVER 30 DAYS LATE
US BANK, ACCT 549389****, NOT MINE
CAP ONE, ACCT 4305968****, NEVER 120 DAYS LATE
BK OF AMER, ACCT 379****, NOT MINE
CITI, ACCT 4428****, NEVER LATE
FUSA BANK, ACCT 4366****, PAYMENT HISTORY INCORRECT
MIDLAND CREDIT MGMT, ACCT 490583****, NOT MINE
CITIBANK SOUTH DAKOTA, JUDGEMENT 54938372, AMOUNT SHOWN IS INCORRECT

Please delete the above derogatory information as quickly as possible and reply back
with an updated credit report.

Sincerely,
YOUR SIGNATURE
YOUR NAME
DOB: 01/01/1960
SSN: 123-45-6789

RINSE AND REPEAT

Once you have received a new credit report from one of the credit reporting bureaus, check it for errors and immediately send a copy with items circled and another tradeline dispute letter. Then, give them 30 days to answer, then if they don't answer, send them the 2nd letter. Once there are no more derogatory accounts listed on a particular credit report, you are done with them! You can focus all your attention on the other credit reporting agencies at this time. This will help you earn better credit in short order.

NEW COLLECTION LETTERS

If during any of this time, you receive a new collection letter, send them this letter, along with a copy of theirs:

YOUR NAME
YOUR ADDRESS

DATE

Re: Account 1234567

Dear Collection Scumbags,
Enclosed is a copy of a letter you sent me. I refuse to pay.

Sincerely,

YOUR SIGNATURE
YOUR NAME
encl.

NEW CREDIT

If you want to earn better credit, it's not an overnight job. Like I stated above, it can take anywhere from six month to one year. But after that time, most if not all of the negative items on your credit reports should be gone. When it is, your credit score should dramatically improve. To give it a further boost, once your FICO score is above 640, you should start applying for new credit. Here is a list of some of the best places to try:

Target
Home Depot
Lowes
Staples
Office Depot
Texaco
Chevron
Shell
AMEX
Discover
Citibank VISA
Chase MC

Because inquiries are a negative tick on your credit report, you should apply for these cards all on the same day, so that they won't see that you've applied to many different places all at once. By using the Internet, it's a fairly easy task. You can repeat these steps every six months until you get all the cards you want.

HANDLING CREDIT FROM NOW ON

Make sure that for any new card or credit line you get, you use it at least once a month and pay it off in full every month. After about six months, call the customer support line and request a credit line increase. Most companies will give this to you if your credit score is high enough and you have maintained an excellent payment record with them. Just make sure you keep paying your balances in full every month and never use more than 20 percent of your credit line on a particular card in any given month.

After following all the steps here, you will earn better credit, and your FICO score should be well above 700. Buying a home? At over 700, you would be in the perfect position!

For more information, click HERE