How to Clean Up Your Own Credit File

A. Sarnoff
In 1995 I was saddled with my own debt AND debt that wasn't mine - stolen info, fraud, etc.  In 1997 I read a book that taught me how to clean up my credit.  I did what the book said, and, at the same time, I paid off my OWN stupid debt!   It took me two years.  In 1999 I bought my first home.  In 2014 I became 100% debt-free.  You can do it, too!  One year from now you will wish you began TODAY!  So do it!

The first step, of course, is to begin paying all your debts on time.  That is so important!  Use a bills calendar.  Credit reports reflect late payments.  Next, consolidate your debts yourself, if you can find a 0% or lower rate card than what you currently have. You'll have to be careful about transfer fees.  But better than that, pay off the small debts, then roll that payment into the next largest debt.  This is called "snowballing" your debt by Dave Ramsey, or "rapid debt repayment" by Mary Hunt (love her calculator on her website).  Then, of course, cut up your cards, but don't close any accounts until things are under control.  Click on my posts for Living on One Income and you will see all about how to do this.

Have you ever received a letter denying you credit?  If so, there are a few things you can do on your own to help clean up your own credit file, especially if the negatives on your report are not really yours.  Don't pay anyone to do this for you.  Only you can do it. 

Start by visiting www.annualcreditreport.com.  This is the correct site.  Don't go to another.  Request your information from just ONE of the three reporting agencies.  Put on your calendar to do the next agency in four months, and the final agency four months after that.  Then do it again the following year until your credit is satisfactory.

1)  Go through your report and list all the wrong items:
            Misspelled names, work names, street names. 
            If an address was transposed, such as 4107 Main and 4170 Main Street, put in your letter:  "This was obviously a transposition of numbers on the reporter's part, and is causing confusion.  Please delete the incorrect address of 4170.  The correct address is 4107 Main Street."

Ask them to delete information (list it) that is negative and is over 7 years old (10 years for bankruptcies). 

2)  If something is wrong, say so in your PAPER letter to the credit reporting agency.  For example:  "I've never heard of this company.  This isn't my account.  I have never done business with them."  (Especially happens when your name is common - we once had a neighbor with the same name!)

If a relative's debt shows on your report - that may be good IF their credit is good.  For instance, when I was starting life I got myself into stupid credit debt.  But my parents' credit was showing on my file, and they paid everything on time.  This helped me!  But if they were behind, then I would have asked to have their accounts deleted from my report.

3)  If something is listed twice, say so!  "Why is this debt listed twice?  As LA12345 and just 12345?  Please delete as it appears that I have two debts.  Thank you."

4)  You can dispute inaccurate information.  The credit reporting agency (CRA) will do an investigation and give you a written report.  If an item was paid and it doesn't show, tell them:  "I have proof that this was paid 10/2016 (copy attached)."  OR  "This account was settled.  Please delete."  OR  "This was paid by a settlement agreement in 2015."  OR  "This was paid to another collection agency in 2012."  OR  "This was dismissed in 2009. Please delete."  OR  "The wording is wrong on my XYZ card acct #54321 - it should say 'Paid satisfactorily' or 'paid as agreed.'  Please report it correctly.  Thank you."

5)  Once you've made your case, mail off your letter and wait for a response (usually within 30 days).  When you receive your new report, if there are still items you want to see removed, you can send another request.  Just ask to have it removed - especially if it isn't your debt and is fraud!

Years ago someone in the duplex behind me ordered a pager in my name.  He didn't work and waited for delivery.  He signed my name!  I obviously disputed with the debt collector.  They said, "Sorry, we have proof of delivery" and sent me a copy.  I didn't let it go.  I wrote back that I refused to pay for something I neither ordered nor received and told them what I believed happened.  They sent an affidavit to have notarized, which I did, and it was removed from my files.

6)  If the CRA's investigation doesn’t resolve your dispute, you can probably add a brief statement to your file, explaining your side.  Of course, if all the debts really are yours, you are simply going to have to pay the consequence of waiting 7 years and begin good credit habits today.  But you can change your report to reflect "Paid by agreement" (as in you negotiated a payoff with the debt collector, even if it wasn't for the full amount) instead of "Delinquent."  It's up to you!  Mary Hunt paid back over $100,000 to her creditors!

7)  If, at the end of a year, you have one CRA reporting that is more accurate than the others, you can actually contact the other two companies to put a note in your file that says something like, "This CRA (name it) is not maintaining reasonable procedures to maintain maximum accuracy in the reports it keeps on me.  This report is inaccurate and shouldn't be given credence. Please contact this CRA (name the good one) for an accurate report."  I never had to do that, as I was able to clean up my reports on my own, just by writing letters and keeping on top of things.

8)  Keep track of when negative credit is to fall off your report.  Put it on your calendar.  When your next free report is available, make sure it has been removed.  Follow up and ask them to remove it!  "Seven years has passed.  Please delete this debt."

8)  If you keep disputing a debt and they cannot verify it, or drop the ball in verifying it, it can be dropped from your report.  This takes DILIGENCE on your part.  You must respond immediately to their letters.  Don't be frightened.  It is personal on your part, but not on theirs.  Only you can protect your own credit.  Be ready to FIGHT, but be nice.  Fight as in don't give up and get scared.  You do this when someone, an old roommate or an ex, takes advantage of your good name and opens a catalogue account or other credit card and never paid the bills.  Clear your name!  Don't give up!  It can be done!

In 1997, I went to an urgent care clinic, and at the end they presented me with the bill, which I paid in full.  Days later I received an exorbitant bill!  The fire in me was ignited.  I wasn't going to pay one more penny that I didn't owe - and I haven't.  I called up the clinic and said, "You presented me with a bill, and I paid it in full.  You can't just suddenly decide I owe more!"  The woman actually laughed, and said, "You're right!  We can't.  I see that you did pay the bill we gave you.  If it was incorrect, that's our problem.  We can't bill you more after the fact."  

That positive outcome gave me more courage to speak up.  I went to the mall and bought an outfit.  I decided to splurge on the matching purse and jewelry after carefully considering the prices and my finances.  When I got to the cash register, all went well until the purse was rung up.  It was three times as much!  I said, "But the price tag says $13."  She replied, "The price tag was mis-marked." !!!  I told her that she could not raise prices on tags at the cash register, mis-marked or not!  The woman behind me spoke up, "That's correct.  That's the law."  Now normally I would have put the purse back.  But the fire had been ignited in me.  I don't let people walk all over me anymore!

A. Sarnoff
I lamented to someone, "Every month I seem to have a financial catastrophe.  A bill I don't expect always comes my way" and related the above.  He replied, "Janine, that is life.  You should expect a problem like that to come your way every day.  And when it doesn't - rejoice!"  His comment actually changed my mindset from martyr to rejoicer!  I was feeling like I was the only one this was happening to.  But it happens to everyone.  And when you have good days without financial woe - REJOICE!
Disclaimer:  I majored in Consumer Economics, and as part of my classes I helped counsel people considering bankruptcy.  This was two decades ago, and this post cannot be considered legal information.  You need to consult your attorney if you are considering bankruptcy. 

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