1. Closing old accounts
The age of your accounts, types of accounts, and amount
of debt used make up a total of 55% of your credit
score. When you close an account you remove that account
from the equation. That's usually not a good thing.
Instead it's much wiser to use your old cards once every
6 months to keep them active. Just be sure to pay off
the balance within 2 -3 months.
2. Using template forms
The credit bureaus aren't stupid. They keep records of
every dispute you make. In fact, they keep records of
all disputes. When they see a dispute often enough (like
a template dispute you may find on the internet along
with thousands of other net surfers) they are much more
likely to mark that dispute as frivolous; since the odds
are the person using it is either a fly-by-night credit
repair company or an amateur. Once your account has been
flagged it will be much more difficult to make any
further progress on your credit report. Use the template
to give you an idea of what you need to say, and then
put it in your own words.
3. Reviving the
statute of limitations
The statute of limitations is the period of time a
creditor can sue for a balance owed. The time varies
state by state, but begins on the date of your last
payment. Making ANY payment, even 20 years later, will
cause the debt to reactivate and become legally
enforceable. Before making any payments be sure to
research whether or not the debt is within the statute
of limitations.
4. Not using
certified mail
Believe it or not, credit repair is a legal process. Any
lawyer will tell you it's not what you know, but what
you can prove that counts. According to the Fair Credit
Reporting Act (FCRA) the credit bureaus, creditors, and
collection agencies have 30 days to investigate and
respond to your disputes. This is a major weapon in your
arsenal because lenders maintain millions of records. It
can be very difficult for them to produce the requested
documents.
5. Not disputing in
the proper order
When disputing you are requesting the bureaus and your
creditors to prove they are following the law to the
letter. If they are not your ultimate recourse is a law
suit. Your case won't hold water if you don't follow the
proper procedures. If you're going to ask for leniency
from a creditor, do that before disputing with the
bureaus. If you plan to fight a remark on your report,
you must dispute with the bureaus first.
6. Giving up too
soon
While you may get immediate results if you have evidence
of wrong doing, you can still get good results if you're
persistent enough. For instance, most collection
agencies will reply to a request for validation with a
template letter. This letter violates the Fair Debt
collections Practices Act (FDCPA). By following up you
can leverage their violation into a deletion or a law
suit.
7. Not validating
with the creditor or collection agent
Many consumers are too quick to pay off creditors and
collection agents just to stop the harassing calls or in
an effort to clean up their credit history. Before
paying any past due debt, you have the right to request
validation that the debt is yours. You'd be surprised
how often they fail to comply.
8. Not keeping
copies of all correspondence
Every letter you send and receive from a creditor or
collection agent can be used to build your case. Never
negotiate or accept offers unless they're in writing.
Document EVERYTHING.
9. Validating
negative information
Another common rookie mistake is to validate negative
information while trying to dispute the information
being reported. The rule of thumb is the less you say
the better. Make them prove themselves to you. The law
is on your side.
10. Not hiring a
professional
Credit repair may seem simple. As you can plainly see,
it's not. To get fast results far above anything you
could ever do on your own without years of experience,
trial and error, and maybe an ulcer, you'd do well to
invest a few hundred dollars hiring a reputable credit
repair service.
