Any Negative Item Will Be Deleted After Seven Years, Right?

Wrong. While it is true that negative items should be deleted after seven years--ten years for bankruptcy--they very rarely are. Of all the complaints I get about credit errors, the most common is that the items in question are more than seven years old. In all honesty, the credit bureaus are not in the business of ensuring accuracy or making sure your items are deleted on time. It's been my experience that these items stay on there until you do something about them.

So, you either need to dispute them yourself or hire someone to do it for you. You can do it yourself. If you don't want to hassle with it, I recommend Lexington Law Firm


Don't think that these items will take care of themselves. You must take the necessary steps to protect your credit, and don't think that nothing can be done. 78% of Americans have errors on their credit reports, and thousands of errors are deleted everyday. Good Luck

Will My Collection Account be Deleted When I Pay It?

Many people think that to repair their credit, they just need to pay off whatever derogatory item is affecting their score. This is false. Your collection, charge-off, or late payment will not be deleted when paid or settled. Once the item is paid, it will stay as a collection, charge off, etc.; the credit bureaus will simply add a line that says it has been settled or paid. Your score will remain negatively affected, and now you will have to wait 7 years from your latest payment.

That being said, is it not wise to pay on a derogatory account? I always recommend that people pay their obligations. Once an item has been paid, it is much easier to remove. The reason for this is that the collection agency or creditor is no longer interested in verifying the information to the credit bureaus when disputed.

What to Do If you Have Bad Credit

Unless you have no connection to the outside world, then I’m sure you are fully aware of the credit crisis we are experiencing in this country. This credit crisis essentially has happened because loans were granted to people that could not afford them. That being said, does that mean that if you have bad credit there is no way to get a loan or credit card? NO. You can still get loans. There are a lot of people that have bad credit that really can afford the loans for which they are applying, but they are paying for mistakes of their past or they recently went through a divorce, medical emergency, or some other life-altering condition that caused the bad credit. If you are one of these people, you need to get started repairing your credit. If you have the time to do it yourself, that’s great. If you don’t, then you may want to consider paying for credit repair service. I recommend Lexington Law; you can find a link on our site to them. I personally have used them, and I think they offer a very fair-priced and effective service.

Make Sure You Qualify

Now, as far as getting a loan with bad credit, there are two things that you need to do. First, you need to specifically ask companies whether or not they do loans for people with bad credit. Don’t waste your time and hurt your credit score more by getting rejected by multiple banks. Just ask them whether or not they do loans for people with bad credit and ask them what the qualifications are. I don’t ever apply for anything that I don’t already know I will be accepted for. I bring in my credit reports and scores from all three bureaus (look up my post on credit monitoring). I show the loan officer what I have, and let him determine whether or not I would be accepted before I give them the ok to run my credit and so forth. I think this is essential. It is also essential to be very forward with people if you have bad credit.

Be Forward

If you have bad credit, let any bank or mortgage broker know that up front. Tell them you have bad credit and ask them if they can deal with you. If they say yes, then you need to find out how they qualify applicants. For many people, they just go strictly off of your F.I.C.O. score and income. You want to talk to someone that will manually underwrite your loan. This means that they will be willing to hear your explanation of the bad credit and judge personally whether or not you can make the payments instead of just categorize you based on numbers.

Bad Credit and Credit Cards

The same rules apply concerning credit cards. Make sure that the card company has programs for people with bad credit, and decide whether or not you’ll be accepted for such a program before you apply. Remember, every time you allow your credit to be run, it will hurt your score. It may not decrease it much, but it will decrease it some; and the more inquiries you have, the more than tend to negatively impact your score. If you absolutely cannot get a card, then apply for a secured credit card. You will have to deposit money to secure your account, but the card will report to the bureaus the same way any other card company would do, allowing you to improve your credit and add a positive account history to your report.

Bad Credit and Your Terms

Remember, just because you can get a credit card or a loan with bad credit, don’t become complacent about improving or correcting your credit score. Do everything you can to have a solid score (680+), because your options and terms for credit will improve greatly if you have a good score. Don’t be a victim to lenders that prey on people with bad credit. I do real estate investing as a hobby, and I recently bailed out a homeowner that was paying 18% interest on his second mortgage. He couldn’t do it any longer, and he was going to lose the house because of it. Just because you might get accepted, this doesn’t mean you should go forward with it. Review the terms and be wise about what credit obligations you take on.

And Finally, you can always fix bad credit. Look at this post for information about disputing your bad credit history. If you don't have the time hire Lexington Law Firm

How to Dispute an Error on Your Credit Report

One of the many problems with our credit system is that it allows for so many errors to show up on our credit reports. With identity theft increasing at an alarming rate, you need to monitor your credit report and remove the errors fraudulent activity. There are two general ways to remove a discrepancy from your report and rebuild your credit. I will show you how.

The Company

I have found the best way to remove any error or problem is through the company that issued it, if I am still a customer. For instance, assume you just had a late fee show up from American Express, and you are a customer of American Express. The most effective way to remove it is to write American Express a letter. If you tell them that you are loyal customer who loves American Express, and you need their help in removing the error. They will cordially oblige, because they want to keep you as a customer—a happy one incidentally.

Most people overlook this and go straight to the bureaus. The problem with this is that the bureaus are designed to be mechanical. They don’t care about your situation. They will process the information they are given. If you send them a letter, they will contact American Express. American Express will respond that it is valid. Now, if American Express does notice their error (not very likely), they will respond that it is erroneous and the bureau will delete it. However, if American Express just responds that it’s valid, you get a letter back saying it has been verified.

For this reason, I want to contact the company first. They have an interest in me as a customer; they want to keep me satisfied. I can add a personal touch with them which will make them want to help me. Here’s the real bonus though. Most of the time, they will delete a late payment for you, even if it’s not an error. Why? Because they are making money off every purchase you make. Why would they want to estrange and upset you? If they don't want to help you, then maybe you ought to look for a new card. Talk to the business first.

Through the Bureaus

If you do need to contact the three monsters: Transunion, Equifax, Experian, you will have to write three letters because they do not corroborate or work together. You will have three battles that are not easily won. The good news is that you have a couple advantages. The bad news is that there are some pitfalls to watch out for.

What’s on Your Side

Time is your first ally. Everyone knows that the FCRA (Fair Credit Reporting Act) requires the bureaus to respond to your letter in 30 days. If they do not, they technically have to delete it. This sounds great; but I will be honest, this does not happen very often.

Hassle

The other thing that you have going for you is that it is a hassle for the bureaus and the companies with whom they are investigating to verify this information. If the company has lost the information or simply ignores the request for validation long enough, the bureau will delete it because it cannot be verified or it took too long to verify it.

What’s Against You

Be prepared. The credit bureaus have some tricks up their sleeves. Anything they can do to deter you from pursuing your investigation they will try to do. They don’t want to have to spend the man hours investigating your errors. They want you to give up, accept it, and forget about it.

The Blanket Refusal

Invariably, if you send a dispute letter, you will get a blanket refusal to investigate based on several frivolous reasons. Depending on the bureau, they will say that the letter seemed to be a form letter, and they need to verify it was actually you who sent it. They will tell you that you have to prove your identity and place of residence first. The list goes on. These are meant to deter you.

What you can do

The best thing that you can do is put your social security number in your letter and attach a copy of your driver’s license and a proof of residence. This way, they cannot say they did not know it was you disputing it, and they cannot return your letter and say verify your identity.
Here are the addresses to the bureaus:

Experian
P. O. Box 9595, Allen, TX 75013-9595 Tel: 888-397-3742

Equifax
P. O. Box 740241, Atlanta, GA 30374-0241 Tel: 800-685-1111

Trans Union
P. O. Box 1000, Chester, PA 19022 Tel: 800-888-4213


Remember, the best way is to start with the company. If that does not work, move on to the bureaus. Success with the bureaus depends upon persistence. Good Luck.

P.S. If you decide that it's too much trouble to do it on your own, I recommend Lexington Law Firm


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