Credit Repair

A few helpful hints to get you qualified for a mortgage loan:

Low Scores: Scores should be over 620. It’s preferable to have 2 open accounts and a 12 moth history is best. If you need to open accounts and cannot qualify, consider opening a secured credit card.
- You can open a secured card by making a deposit with a bank and they give youa card with that amount.
Student loans: All deferred accounts are assessed a monthly payment (1%-2% of the Balance)
- A single consolidation account with one payment may positively affect your debt ratio and score. Any account in collection should be reinstated of consolidated.
Collections: Try to settle for less than full balance, get receipt stating account is paid in full.
- Get a statement from the creditor stating they have accepted $___ as a payment in full. Then send statement to each bureau reporting them.
Thin Credit: may want to open trade lines/secured
Judgments: Pay off the balance, get receipt from creditor, apply for satisfaction with the court
- Legal items can be updated to reflect satisfied (judgments) or released (tax liens).Get a statement for the creditor showing it's paid, and then go to the courthouse in the jurisdiction where the issue is filed. Take that statement to the clerk of the court and they will advise you on how to proceed. Once you have the court order, send it to the credit bureaus to be updated.
Short Sales/bankruptcy/Foreclosures: Various waiting periods apply usually 2-3 years
- Send “creditor schedule” to bureau to assure accurate reporting
Accounts in Dispute: Remove all trade lines from dispute with applicable bureaus
- If an item is incorrect, send a letter and supporting documentation to the credit bureaus. Ask them to update your account and send you the updated report.
Late payments: payments more than 30 Days late are adverse.
Account Balances: Try to remain well below the account's credit limit
Tax Liens: need payment plan with 3 month history of proof of payment

Begin:

Request online, or in writing, a free copy of your report from all 3 bureaus. You can also try www.annualcreditreport.com or call (877) 322-8228. If writing a letter to receive your report, we have example letters as well as instructions listed below.

Cleanup:

Write letters to all three bureaus listing all incorrect items. Include the vendor name and account number, and the reason that the item is to be removed. Ask that they remove the derogatory entry or the entire account and that they send you a new report when they make the corrections. Repeat this process as necessary. It can speed the process if you use the case number that they issue to you. Note: Correct derogatory items may be removed after 7 years and bankruptcy after 10 years.

Your Rights:

You are entitled to a free copy of your credit report every year, which can be utilized for annual review. If they do not verify the derogatory information within 30 days of your request, they are required by law to remove it.

Credit Bureau

How to request your free credit report

How to dispute items on your credit report

TransUnion Credit

Go to www.transunion.com
Click on the Personal Tab
Click on Free Credit Report on the right under “Credit Reports and Monitoring.”
Click on “See your free credit report”
Choose State, then complete the form and submit

Go to www.transunion.com
Click on the Personal Tab
Click on “Learn More” under the “Want to dispute an item on your Credit Report?”
Then click on Submit a Dispute
You will be given three options of how you would like to submit your dispute, (online, phone, or mail).
If you choose online, click online (You may need a copy of TransUnion’s Credit report).
Click on first-time, and complete information.

Experian Credit

Go to www.experian.com
Click on “get your free credit report & score”
Enter your information
Click on submit and continue

Go to www.experian.com
At the bottom of the page under “additional services & products” then “credit report assistance, click on disputes
You will be given several options
1. If you have an Experian credit report, click on “Yes, I have a credit report number”
2. If you have an account, login and click on the Dispute information tab
3. If you do not have a report, then you will need to order one from Experian. You can also mail your dispute in.

Complete all information and submit

Equifax Credit

Go to www.equifax.com/fcra
Complete information and submit

Go to www.equifax.com
Under “Other Credit Service,” click on “Start a new dispute”
You will need a copy of an Equifax report. You can also send in your dispute by regular mail.

You can also request all three of your reports from www.annualcreditreport.com.

If you plan to dispute items on your credit, go to each bureau separately. You will be given three options from each bureau (online, phone, or mail).

The fastest way is online. They will send everything to the email address you provide within a short period. If you choose mail, it typically takes up to 30 days for them to send you a credit report, and then you will have to dispute thereafter.

Feel free to call any time to learn if there is a mortgage program for which you may qualify. Many programs are available for all credit situations.

For those with No or Little Credit

Begin:

Know what credit you do have.

If there are any negative reports, resolve them as described above.

Build:

Open one or two secured credit cards. These types of credit cards require a security deposit up front, usually $200-300. Then, the bank will give you your line of credit. Only use between $30-50 a month, and always make your payments on time. Doing otherwise will damage your credit instead of helping it. Your first credit history is important to building good habits for yourself, as well as showing those habits to future lenders.

Capital one has great options for these types of cards.

You can apply here: http://www.capitalone.com/credit-cards/secured-mastercard/

Maintain:

Creating a positive history from the beginning will give you a great foundation. So long as you maintain good spending and payment habits, a good credit will follow suit. Never spend more than you know you can pay. The point of credit is not to borrow money….it’s to show you can efficiently manage the money you already have.

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Example Letter 1:

January 10, 2004

Equifax
PO Box 704241
Atlanta, GA 30374-0241
1 (800) 685-1111
www.equifax.com

To whom it may concern,

Listed below are two items that you are reporting as open collections on my report. I have enclosed documentation to show that they have been paid.

First American Bank of Kabul – settled/Paid
Collections -R-Us - settled/Paid.

Listed below are two items that you are reporting as having been 60 days late in October 2000. These accounts were never late.

Ford Motor Credit- never late
No Cash 4U Visa- never late

Please investigate this matter with each creditor and change the status of the account to report that they have been paid. Please send to me a copy of the complete corrected credit report. Thank you.

Sincerely,

John Q. American
SSN 000-00-0000
9400 Livingston Road
Fort Washington, MD 20744

Example Letter 2:

January 10, 2004

Trans Union
PO Box 2000
Chester, PA 19022
(800) 916-8800
www.transunion.com

To whom it may concern,

Listed below are two items that you are reporting as open collections on my report. I have enclosed documentation to show that they have been paid.

First American Bank of Kabul – settled/Paid
Collections -R-Us - settled/Paid.

Listed below are two items that you are reporting as having been 60 days late in October 2000. These accounts were never late.

Ford Motor Credit- never late
No Cash 4U Visa- never late

Please investigate this matter with each creditor and change the status of the account to report that they have been paid. Please send to me a copy of the complete corrected credit report. Thank you.

Sincerely,

John Q. American
SSN 000-00-0000
9400 Livingston Road
Fort Washington, MD 20744

Example Letter 3:

January 10, 2004

Experian
PO Box 2002
Allen, TX 75013
(888) 397-3742
www.experian.com/reportaccess

To whom it may concern,

Listed below are two items that you are reporting as open collections on my report. I have enclosed documentation to show that they have been paid.

First American Bank of Kabul – settled/Paid
Collections -R-Us - settled/Paid.

Listed below are two items that you are reporting as having been 60 days late in October 2000. These accounts were never late.

Ford Motor Credit- never late
No Cash 4U Visa- never late

Please investigate this matter with each creditor and change the status of the account to report that they have been paid.

Please send to me a copy of the complete corrected credit report. Thank you.

Sincerely,

John Q. American
SSN 000 00 0000
9400 Livingston Road
Fort Washington, MD 20744