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Cleaning up Your
Credit
Mortgage lenders generally check with three
credit bureaus in order to evaluate your past payment history. Your goal in cleaning up
your credit report should be to clean up each of the three bureaus. If you only work on
one, this does not effect the reporting to the other bureaus.
Get
A Copy of Your Credit Report
The first step is to get a copy of your merged credit report, which shows all
three of the major bureaus, Experian (formerly TRW), Equifax (formerly CBI), and
Trans-Union. Most mortgage lenders will obtain data from all three of these bureaus
in analyzing your credit history. The exception is that some portfolio lenders
(usually adjustable rate lenders) may only review one. To make it easier for you,
Equifax allows you to order a Merged Report on-line. Just click on the preceding link. It
costs about $29 and is delivered to you by mail in a couple of days.
What
to Say When You Call Your Creditors
There are two efforts that must be made. First, call any
creditors reporting a negative and ask them to remove the negative item. Ask in a nice
calm voice and do not get upset when they say no. Simply repeat your request over and over
in your nice pleasant voice. If you get nowhere, then ask to speak to the supervisor. Make
sure you keep a log of your conversation, noting the date, time, who you spoke to and what
they said. Repeat this procedure over and over. In a high percentage of cases, it works.
Get
Written Confirmation of Agreements
Be sure to ask for a letter by mail or fax that shows the creditor is correcting the
negative information. You may need this letter for two reasons. First, they may not
actually make the changes. With the letter, you can appeal directly to the credit bureau
and they will make the correction. Second, if you are applying for a mortgage before the
changes actually hit the credit bureau’s report, your lender will need this
documentation.
If you have a charge off or collection account that shows as unpaid, don’t just
send them a check and pay it off. Call the creditor on the phone, explain that you have
the funds to pay the account in full, and calmly explain why it should not have been
reported on your credit in the first place. Then ask if they will provide you a letter
deleting the account entirely from all credit bureaus if you pay off the account. Try to
get them to fax it to you. As before, be sure to document all of your telephone contact
and always keep a nice pleasant tone in your voice. In a large percentage of cases, this
also works.
Disputing the Report -- When Your
Creditor Will Not Remove an Item
There will be cases when the creditor does not agree to
remove the negative credit item. If it is an item that is definitely not yours, call the
credit bureau immediately (except for Equifax, who only responds by mail). When on the
telephone, do not discuss any negative items that are accurate. Do not discuss any items
that may be accurate in general but have some small error in detail that you can dispute
by mail. Once you confirm any accuracy at all, you cannot dispute it later by mail.
For the remaining items, you need to dispute them by mail, writing directly to the
credit bureaus. Write a letter to the appropriate bureau including your name, social
security number, address, disputed accounts, and account numbers. You must sign the
letter. Inform the bureau that you are disputing the data as it appears on your credit
report.
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1999 RealEstate ABC |
