Credit/FICO Scores
- Steps to Improving your Credit
The first step is to get a copy of your merged credit rep
report, which shows all three of the major bureaus,
Experian (formerly TRW), Equifax (formerly CBI), and
Trans-Union. We will obtain data from all three of
these bureaus in analyzing your credit history.
To make it easier for you, Premier Investors will give
you a FREE credit report.
Just call me at 858-427-5220 to get started.
It normally costs about $35, some restrictions apply.
Call us for more details.
We generally check with three credit bureaus in order
to evaluate your past payment history. Your goal in
cleaning up your credit report should be to work with
each of the three bureaus. If you only work on one,
this does not effect the reporting to the other bureaus.
- What to Say When You Call Your Creditors
There are two efforts that must be made. First, call any
creditors reporting a negative and ask them to remove
the negative item. Ask in a nice calm voice and do
not get upset when they say no. Simply repeat your
request over and over in your nice pleasant voice.
If you get nowhere, then ask to speak to the supervisor.
Make sure you keep a log of your conversation, noting
the date, time, who you spoke to and what they said.
Repeat this procedure over and over. In a high
percentage of cases, it works.
- Get Written Confirmation of Agreements
Be sure to ask for a letter by mail or fax that shows the
creditor is correcting the negative information. You
may need this letter for two reasons. First, they may
not actually make the changes. With the letter, you can
appeal directly to the credit bureau and they will make
the correction. Second, if you are applying for a
mortgage, before the changes actually hit the credit
bureau’s report, your lender will need this letter
as proof this info is in the process of being deleted.
If you have a charge off or collection account that
shows as unpaid, don’t just send them a check and pay
it off. Call the creditor on the phone, explain that you
have the funds to pay the account in full, and calmly
explain why it should not have been reported on your
credit in the first place. Then ask if they will provide
you a letter deleting the account entirely from all
credit bureaus if you pay off the account. Try to get
them to fax it to you. As before, be sure to document
all of your telephone contact and always keep a nice
pleasant tone in your voice. In a large percentage of
cases, this also works.
There will be cases when the creditor does not agree
to remove the negative credit item. If it is an item that
is definitely not yours, call the credit bureau
immediately (except for Equifax, who only responds by
mail). When on the telephone, do not discuss any
negative items that are accurate. Do not discuss any
items that may be accurate in general but have some
small error in detail that you can dispute by mail. Once
you confirm any accuracy at all, you cannot dispute it
later by mail. For the remaining items, you need to
dispute them by mail, writing directly to the credit
bureaus. Write a letter to the appropriate bureau
including your name, social security number, address,
disputed accounts, and account numbers. You must
sign the letter. Inform the bureau that you are
disputing the data as it appears on your credit report.
- Mistakes on Your Credit Report
Almost every item on your credit report will have some
mistake, even if only slight. Do not acknowledge any
of the accuracies, but be sure to note all inaccuracies.
Write next to each item something like, "not mine, not
accurate, mistaken item, complete error," or whatever
is most appropriate. Request a copy of the corrected
report within thirty days. If they do not respond within
30 days, send another letter. In this letter you will
include a copy of your dated original letter and a new
letter firmly requesting they remove the disputed
info. Include a cc: to the Federal Trade Commission.
- Do Not Call the Credit Bureaus - Write Letters
The credit bureau may write a letter asking you to call.
Do not call under any circumstances. Your phone call
will be recorded and a log will be made of the
conversation. Simply write back with copies of your
original letters, telling them of the original date you
submitted your request. Keep a file of all
correspondence to and from the credit bureau and
follow through continually. Do not get discouraged, as
this will be worth your while.
What happens is that the credit bureaus forward your
dispute to the individual creditors. who have forty-five
days to respond. If they do not respond within the
allotted time the item must be removed. However, if
they do respond at a later date with information that
documents the credit report is correct, the item will be
placed back on your credit report.
For those of you who have filed bankruptcy in the past,
the items that were discharged will normally show up
as a charge-off or uncollected debt. You will want to
write to the credit bureaus, providing a copy of your
complete bankruptcy papers and request that they
show the debt as "discharged in bankruptcy." This
looks better and raises your FICO score. FICO sores
above 680 make it easier to obtain “Stated income” and “No-Doc” mortgage loans.
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- You may not be able to clean up every item on your credit report
Using these methods, but you will certainly be able to
improve the way it looks to potential creditors.
For more in-depth information about credit, click here:
— Credit Education
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 "I have found the biggest mistake that most people make is to forget to check their credit report with ALL three credit report bureaus, at least 3-6 months BEFORE buying or refinancing their home.
This is something everyone should do so you can have any mistakes corrected well in advance. You can request the corrections yourself or use a credit repair company.
You can get a FREE once a year credit report from the bureaus at annualcreditreport.com. When you pull your own credit report you do not affect your FICO score at all. You could pull your credit report yourself, everyday if you wanted to, and not effect your score. It is only when someone else pulls your credit, that it effects your score somewhat.
The quickest way to drop your credit score is to have any late payments, since payment history makes up 35% of your score. The next fastest way to ruin your score is to run up your credit cards to the maximum, since this makes up 30% of your FICO score.
As far, as getting a new mortgage or refinance is concerned, the worst thing is to have a late payment on your current mortgage. This immediately put you in a higher risk category and can eliminate your getting the best rates completely, even if the rest of your credit is perfect.
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Donald McCraig
Owner/Broker
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