10 steps to better credit reports


Here is a summary of a ten step process which will improve your
credit reports (there are three). I developed it by trial and error
after a period of unemployment and was able to remove many
negative references from my own report. While there is no
guarantee that all negative references will be removed, this process
should produce the best results possible.

1). Get a copy of your credit reports.
You must send or phone a request to all three major
bureaus.

2). Stop any current negatives from continuing to appear.
Before you rebuild the house you have to put out the fire. If
negatives are currently appearing, you must work arrangements
with the creditors or consolidate the debt in some way in a manner
in which you can afford, which will show up as current payments
each month (unlike CCCS, which is bad credit).

3). Dispute all negative information on your reports.
If the creditor does not respond within 30 days, the negative
is removed! This happens amazingly often, especially with
collections or write-offs more than 1 year old. With bankruptcy,
judgments, and any other matter(s) of public record, it is often
possible to reserve the necessary documents for the entire 30 days,
making it impossible for the bureau to verify the information in
time.

4). Continuously re-dispute negatives which still appear.
There is no law that says the credit reporting agencies need
only verify a negative once. The only provision is that the dispute
not be "frivolous or redundant". This is fairly easy to get around,
especially with a little persistence. For example: include just about
anything photocopied, insist that you had an account with them,
but the account number on the bureau was wrong, insist on a name
and phone number for the original creditor, (or provide them with
one). Any of these can be grounds for getting negatives disputed
multiple times. Often, a civil lawsuit filed with your local circuit
clerk against either the bureau or the creditor will get the negative
removed, because otherwise the corporation that you sue must
show up for court at your location with counsel, which is very
expensive for them.

5). Work directly with the creditor.
Often creditors who were not paid will remove the negative
completely in exchange for a settlement. The settlement can even
be a small percentage of what the original debt was. This must be
done carefully to insure that they keep up their end of the bargain,
by insisting on an advance letter on letterhead stating the terms of
the deal.

6). Reduce the impact of remaining negatives.
At this point, it may be prudent to pay any negatives which
have not disappeared. This will make the negative less severe, and
will give you a better chance of successfully disputing the
information off at a later time. After all, any creditor will be more
likely to ignore paperwork on which they are not even owed
money. You may also add a statement of up to 100 words to your
report, explaining your situation or your side of the story.

7). When to consider personal bankruptcy.
This should be avoided whenever possible, but in some
cases does work out for the best. This is because after declaring
bankruptcy, you are not eligible to again for 7 years, so the creditor
knows that they are less at risk of having the obligation discharged
through bankruptcy. Also, after a bankruptcy, most people would
have very few monthly obligations.

8). Reestablish positive credit.
Secured VISA cards, self-liquidating loans, finance
company loans, and auto loans can all be used to reestablish credit
even with bad credit still on the report. When the report gets clear
of bad credit, and there is good credit reported on it, loans can be
obtained anywhere!

9). If all else fails. Establishing a new credit file.
To do this, you must change your Social Security Number
and your name or address. The Social Security Number must be
changed through the Social Security Administration, or can
be substituted with a Taxpayer Identification Number through the
IRS. Steps should also be taken to insure that the files are not
merged at a later date by not using the new information on prior
accounts which report to the bureau.

10). Avoid a repeat of the situation.
Use the principles of budgeting, and tools such as your debt
to income ratio, to keep from getting in trouble again.