I have been been doing my homework in this area, and I am thrilled to report that my credit score has risen dramatically due to some simple efforts I made. Here’s what was holding me back.
I’m pretty conscientious when it comes to paying my bills on time. But a year ago my wife and I moved to a new city. Though we canceled our utility accounts only after the final balances had been paid, my credit report showed an unpaid partial month.
Because we changed addresses twice in 3 months, I guess written confirmation never found me, and we were never notified any other way. I only noticed the negative mark on my credit report when I checked AnnualCreditReport.com, after it had already moved to collections. Luckily, this was the only problem on my report.
It was about this time that I finally received a letter from collections. They had received the rights to my debt. The dollar amount was small, but I decided to ask for validation of the collection agency’s right to the debt. They are required by law to prove to you that they actually have the right to pursue you and demand payment. These laws are in place to eliminate some of the old, predatory practices that used to be the norm in the industry.
Fortunately for people like you and me, the requirements placed upon these collection agencies are very strict. Unless they are able to provide very detailed proof that they own the rights to your debt, they must clear your record. They also, in this case, have to prove that the charge is valid in the first place.
Mistakes on your credit report are surprisingly (or maybe not so surprisingly) common. Because the three Credit Reporting Agencies get their information about you from every lender/creditor you use, there are many opportunities for mistakes. If you’d like to know how to remove disputes from credit report history, then read on to see how I was able to do it. Within time you’ll have the CRA (or collection agency in this case) jumping through all the hoops to prove to your satisfaction that your debt is valid. Or they might just delete the offending item, because it’s too much trouble to gather all the materials to validate your debt. For you, this would be the ideal result.
I sent the collection agency a letter like this. This is just an example. I’d recommend that you put it in your own words if you decide to send one of your own. But there are some key points to note:
1) Identify the specific debt they say you owe. Company name and account number.
2) Explain why you believe this to be an error.
3) Get a certificate of mailing to prove you sent the letter. You have 30 days from the time the Collections people contact you to take action.
4) Tell them to either verify the debt or have it removed from your account.
5) Inform them that they can only contact you by mail, not phone or any other form of communication.
The linked sample letter has some other helpful hints that will help make this process successful.
My story all happened some weeks ago. I waited and waited, never getting a written response from the collection agency. Then about a week ago I received a notification from Experian that my credit score had suddenly jumped 57 points. When I checked, the old item was removed. This was the first time I had personally taken advantage of the debt validation requirements of the FTC. The resolution was pretty swift, and the difference it made on my credit score was surprising. I expected it to go up a bit, but this took me from a pretty good score to a really excellent one.
I wish this mark had never appeared on my report in the first place. Because my wife and I made a couple of major purchases in the past year, I’m sure we could have secured slightly lower interest rates had my score been where it is now. Whatever the case, I’m going to pay close attention to this in the future.
Luckily, this was my only negative mark. You may have far more. Here is a link to AnnualCreditReport.com’s credit report and dispute filing page. Here is some more information from the FTC on disputing credit report items such as this.
This may take a little work, but it can work wonders for your credit history. Take advantage of the free resources for learning about how to dispute credit report history and take the steps necessary to better your credit standing. This will make a huge difference in the interest rates you pay and for many financial opportunities in your future.
Author Bio: Andrew is a freelance writer currently writing for the Modest Money personal finance blog. Check out Modest Money for all kinds of great financial advice and product reviews including this Barclaycard Arrival World review, one of the hottest travel credit cards available today.
Images courtesy of FreeDigitalPhotos.net
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