Credit Repair: Things You Need to Know

By Jamal C. Wright, Esq.

In my field of Bankruptcy, I get more inquiries about how to improve credit reports than any other legal issue. More often than not, I get approached when the issue becomes critical. The debtor has come to a point in their life where they wish to purchase a house, a car or an education. But if you know what I know about credit reporting agencies (CRA’s) and their practices, then you wouldn’t approach me at all. In fact, I don’t want you to approach me about cleaning your credit report. No lawyer does. We will get to why in a moment. Here’s my chance to tell you a little bit about what I know. Let’s break it down to 3 basic points:

• (1) Tiiiiime… aint on my side, no it’s not!
  

There is no quick fix to your credit report. People ask me all the time if I could do something, immediately, to bring their FICO scores up twenty points. Nope. Your Fico score is concocted from a secret algorithm that only the people at Fair-Isaac Corporation know. Their secret is as protected as the ingredients to Coca Cola. However, it is public knowledge that this score is derived from the credit history told about you, by the “big 3” credit reporting agencies. So to change your score, you must change history, so to speak. This takes time. People should give themselves 3-9 months after they have begun work on their reports to look for a significant change in their FICO score.

• (2) One web site: AnnualCreditReport.com

Not FreeCreditReport.com. This site is credit report improvement central. This site is one that the three CRA’s are forced to maintain by federal law. It’s the only site you should waste time on, despite the lack of a catchy jingle. In the site’s own words, they admit:

“AnnualCreditReport.com provides consumers with the secure means to request and obtain a free credit report once every 12 months from each of the three nationwide consumer credit reporting companies in accordance with the Fair and Accurate Credit Transactions Act (FACT Act).”

They also give you a free report whenever you have been turned down for credit or a job, etc… I always say that nobody should EVER have to pay for a credit report.

What CRA’s do not admit so readily, is that the same federal law requires them to be 100% correct in everything they report. This means if they say you owe someone $100 and you really owe $101, they MUST investigate and MUST either correct it or erase it within 30 days of becoming aware of the inaccuracy, or else. It’s very hard to maintain 100% correct trade lines, since what you actually owe a creditor, can change from moment to moment. That’s the rub and it works in your favor, because frequently we find that CRA’s just erase the trade line, hence the saying, “clean one’s credit.” Who will bring the inaccuracies to their attention? You. Your attorney could do it, but the credit lobby in Congress made it so that when attorneys get involved in the process the CRA’s actually have MORE than thirty days to investigate. How do you bring it to their attention? You dispute them.

• (3) The CRA Dispute
  

When you go to AnnualCreditReport.com, you will be getting the most recent version of your report from the “Big 3.” You will also be able to start your dispute process. The reports will contain a confirmation number. This number will allow you back into the system for the next 30 days on the individual CRA websites, to dispute trade lines. The hardest thing about starting this process is finding the actual “dispute” page on each of the three CRA sites. They aren’t exactly in plain view.

After reviewing your reports and identifying the most “questionable” trade lines, go online and dispute them by clicking a few buttons. The process is amazingly simple for you. Not exactly the same for them. The CRA will take your dispute, go back to the original creditor and ask them to prove their claim. If the creditor can’t dig paper proof of the exact claim within thirty days (and unless they are Bank of America, they rarely can), the tradeline MUST be erased, or “cleaned.” As for your other negative tradelines, wash, rinse, repeat. There are twists and turns, but if you are consistent, you can wipe virtually all “inaccuracies” off of your report, thus enhancing your FICO score.

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