Repair your credit
This report contains all the information you need to begin
repairing your credit on your own immediately. You can use
the information in this report to get all the forms and write all
the letters on your own. Full details for doing so are provided.
If you prefer, for $5.00 we can provide all the form letters and
materials you need (see ordering details at end of this report).
Either way, we hope the information contained in this report will
be of value to you, and answers many of your questions about how
credit repair is actually done.
NOTE: The authors of this report are not in the business of
rendering legal services. The items in this report are
detailed in as objective a manner as possible, and can be used
both in accordance with and disregard of the law. The publisher
and authors disclaim any responsibility for personal loss or
liabilities caused by the use or misuse of any information
contained herein. If you have legal questions about any of the
techniques reported on, or are considering using any of them in a
manner that might be regarded as at all questionable, the advice and
services of a fully qualified legal professional are highly recommended.
TABLE OF CONTENTS:
* WHY YOU DON'T HAVE TO WAIT YEARS TO GET ITEMS REMOVED!
* WHY YOU CAN'T GET THE FULL STORY FROM GOV'T BOOKLETS ON
CREDIT REPAIR!
* THE FEDERAL CREDIT LAWS AND WHAT THEY REALLY MEAN FOR YOU AS A CONSUMER!
* HOW TO REPAIR YOUR CREDIT USING THE LAW TO YOUR ADVANTAGE
* WHY IT IS ESSENTIAL YOU CONTACT ALL THREE MAJOR CREDIT
REPORTING AGENCIES!
* LITTLE KNOWN STRATEGIES OF CREDIT REPAIR SPECIALISTS FOR
TOUGH CASES.
* HOW TO REMOVE JUDGEMENTS, LIENS, BANKRUPTCIES, AND OTHER
PUBLIC RECORD ITEMS FROM YOUR CREDIT FILE!
* HOW TO ESTABLISH AAA CREDIT IN 30 DAYS!
* CREDIT FILE SEGREGATION AND THE STEPS YOU MUST
TAKE FOR IT TO SUCCEED!
* HOW TO GET A MAJOR CREDIT CARD NOW!
* DEALING WITH YOUR CURRENT DEBT LOAD
* SUMMARY
==================================================
Important terminology:
CRA - Credit Reporting Agency. There are many CRAs, but the big
three involved in consumer credit reporting, as opposed to
business credit reporting, are TRW, CBI/Equifax, and
Trans Union.
FTC - Federal Trade Commission
FCRA - Fair Credit Reporting Act
* WHY YOU DON'T HAVE TO WAIT YEARS TO GET ITEMS REMOVED!
The law says that credit reporting agencies are permitted to keep
negative credit information on your file for up to seven years,
and bankruptcies for up to ten. Many people mistakenly assume
this to mean credit reporting agencies are legally obligated to
keep items on for that length of time.
They are not legally obligated to retain items for any length of
time. They are only obligated to remove them completely and
without question after a certain time. You have the right to
protest items and have any item removed at any time if you can
demonstrate a reason why it should be removed, or if they can not
verify its validity within a "reasonable amount of time".
* WHY YOU CAN'T GET THE FULL STORY FROM GOV'T BOOKLETS ON
CREDIT REPAIR!
It is not the job of government pamphlets and brochures to
explain loopholes or expose weaknesses in the law. The pamphlets
themselves are often relentlessly redundant, and while they are
excellent sources of information on the textual content of the
law and your rights in theory, they are not concerned with
"creative exercise" of the law. Dozens and dozens of free
pamphlets on credit law and credit repair, most of them endlessly
repeating the same points over and over again, can be obtained
from the FTC. Their esssential message is that time is the only
way to remove negative items. It certainly is the only
absolutely guaranteed 100% effective way, but hardly the only
approach you have to take. For more information on credit-
related government pamphlets, write to the Federal Trade
Commission, Washington, D.C. 20580. You also may write to that
address for a free copy of Best Sellers, which lists all the
FTC's consumer and business publications.
* THE FEDERAL CREDIT LAWS AND WHAT THEY REALLY MEAN
FOR YOU AS A CONSUMER!
- Fair Credit Billing Act
Under this law, you may be able to withhold payment of the
disputed amount of your credit card bill until the dispute is
resolved. You must notify your credit card company of your
problem in writing within 60 days of receiving your bill.
- Fair Credit Reporting Act
This Act protects you by requiring credit reporting agencies
to maintain correct and complete information in your credit
file. You have the right to see your file on request. If you
were denied credit because of information in your file, you have
the right to see it at no charge. If you find incorrect or
incomplete information, notify the credit reporting agency. They
must investigate and correct errors.
- Fair Debt Collection Practices Act
Certain methods of debt collection are prohibited by this law:
harassment, the use of false statements, and other unfair
practices. You can stop a collector from contacting you by
writing a letter to the collection agency. The agency can then
only contact you to say what action, if any, will be taken.
- Equal Credit Opportunity Act
Under this law, it is illegal for creditors to discriminate
against applicants on the basis of sex, race, marital status,
national origin, religion, age, or because they get public
assistance income.
- Truth in Lending Act
This Act requires lenders to give you cost and terms information
(including the annual percentage rate, "APR") in writing before you
sign a loan agreement.
- Credit Practices Rule
Under this rule, finance companies, retailers, and credit unions
are prohibited from requiring you to give up specific rights, agree
to wage assignments, or use certain household goods as collateral.
It also requires that a notice of potential liability be given to
consumers before they cosign for loans.
For further information about these laws, contact your regional
Federal Trade Commission (FTC) office, or the Public Reference Branch
of the FTC at (202) 326-2222.
The Bad News
Basically, you can't expect too much in the way of intervention
in individual cases from the state and federal credit-regulating
bodies. The purpose of reports like this one are an attempt to
fill the information gap for individual consumers trying to
handle their own situations, and not involved in class-action
disputes or or other large legal actions that would interest the
federal and state governments.
The federal laws governing credit practices are contained in the
following codes:
Fair Credit Reporting Act
Equal Credit Opportunity Act
Truth In Lending Act
Fair Credit Billing Act
Fair Debt Collector Practices Act
Credit Practices Rule
(For brief definitions of these codes, see the section above)
The FTC is responsible for enforcing all these acts. How much
support you can actually expect to receive from the FTC is
questionable. In their own words:
"While the FTC does not handle individual cases, it can act
against companies when it sees a pattern of possible law
violations developing."
Of course, the point of protection under the law is your right to
receive just compensation if someone has violated your rights in
dealing with you. In other words, you have the right to sue,
using the federal and state laws to establish your grounds. This
is fine if you have been the victim of unfair credit practices,
or discrimination, but does little to help you in your battle to
clean up your credit report without going to court.
If you should want to file a complaint with the FTC, address your
complaints to:
Director
Federal Trade Commission
Pennsylvania Avenue & Sixth Street, N.W.
Washington, D.C. 20580
(202) 523-3830
In addition there are state laws that differ in how they regulate
credit practices within their particular state. The state
Attorney General's office and local consumer advocacy groups can
be of assistance in letting you know what additional rights your
local laws provide.
The Good News
You have certain rights as a consumer under federal law which can
be used to your advantage. These are commonly accepted rights
and should not in and of themselves be a point of contention.
You have the right to know what your consumer credit report says
about you. This is a right you should have no trouble
exercising, beyond the usual bumblings of bureaucrats and
underpaid clerks.
You have the right to dispute any items in your credit report.
You can dispute any item without regard to how long it has been
present in your report, one day, one year, or more. After seven
years (ten for bankruptcy) it must be automatically removed
according to federal law.
There is no mandated limit on how often you can dispute the same
item. If it isn't removed the first time, you can try again
later.
You have the right to have any disputed item investigated within
a "reasonable amount of time", considered to be 90 days from the
date the CRA receives your dispute. Some CRAs complete their
investigation in as little as 30 days. There is also a serious
limit to how much energy they can afford to devote to any one
investigation.
If during that time they can not verify the item for any reason,
it must be removed. This is a very strong right, and the basis
for many credit repair strategies.
* HOW TO REPAIR YOUR CREDIT USING THE LAW TO YOUR ADVANTAGE!
Automatic Removal Method
This is the method recommended by the FTC, and by people who
accept the defeatist attitude that nothing else can be done. If
you don't mind waiting the time required, then this will usually
work without your having to take any other action (occasionally a
reminder letter to the credit reporting agencies is needed to
wake them up), and it is 100% effective for removal of common
consumer credit items. But you will be waiting for a long time.
Limits on how long negative material may remain on your credit
file are mandated by the Fair Credit Reporting Act. Negative
items MUST be removed after seven years, except bankruptcies
which can remain on your record for up to ten years. However,
this does not mean that negative items must remain on your report
for that length of time, only that they CAN. It is your right to
challenge the negative information on your credit report at any
time, and have the items removed if you can demonstrate under the
law why they should be erased.
Dispute Method
This is the basic method used in challenging negative items on
your credit report. Still, this method is somewhat misunderstood,
and can be approached in several ways, constituting different
methods of using the law. Most of the techniques detailed in this
report are variations of the dispute method.
The Fair Credit Reporting Act requires disputed items to be
investigated within a "reasonable amount of time" unless
"frivolous or irrelevant". Within 30 days of their receiving
your dispute you must recive written notice acknowledging your
dispute. No later than 90 days after receiving your dispute
they must either verify the item or delete it (in your dispute
letter you must demand the item be "deleted", not "corrected").
You should receive a written explanation of their decision.
Also, many CRAs claim their investigations take only 30 days
or less. If the CRA you are writing to makes that claim in
their instructions then hold them to it.
If you have not received a letter acknowleging your dispute
within 30 days, as required by law, then you should write a
letter demanding they remove the item immediately. Send your
original dispute by return-receipt-requested certified mail,
so you have a record of exactly when they in fact received it.
Similarly, if they claim their investigations take 30 days and
you haven't heard from them regarding a decision after that time
has passed, write a letter demanding they verify or delete the
item immediately. Assert your rights.
It is important to understand that you do not have the
responsibility to prove the item is incorrect, they are the ones
who must verify the item or remove it.
Which brings us to the "frivolous and irrelevant" clause in the
federal law. What this means is, if the CRA you are disputing
items with considers your dispute to be such an obvious attempt
to have legitimate items removed that they feel the entire
dispute is undoubtedly without merit, then they are allowed under
federal law to disregard the entire dispute without needing to
investigate it.
This is the problem with going through some unscrupulous "credit
repair specialists". A less-than-ethical agent may take your
money and then simply send out a letter to each of the three main
consumer CRAs disputing every negative item all at once on your
report.
If you have only one or two negative items that have been
blocking your credit, and if you are one of the many people with
negative material on their credit report that legitimately does
not belong, then this may work for you without attracting
suspicion. Just because a CRA can dismiss a dispute as
"frivolous and irrelevant" does not mean they have the right to
label every dispute as such.
If, however, you have many negative items on your report, or
items of a nature that require a more sophisticated approach,
then all this letter will do is have them label your claim as
"frivolous and irrelevant", and you will be worse off than before
you gave your money to this "repair specialist". You might also
now owe money to this agent who may not take any further steps on
your behalf.
There are many ways around this when you do the whole process
yourself. First of all, you must obtain copies of your credit
report yourself(see instructions below). Then you must determine
how bad your situation is and plan your attack. It may have
taken you years to mess up your credit, you have to accept that
if your situation is really bad then it may take months to repair
years of damage.
Don't be in too much of a rush, and try to avoid that "frivolous
and irrelevant" response. The simplest way to do this, if you
are dealing with multiple items, is to challenge only a few items
at a time. There is nothing illegal about this: you are not
obligated to challenge everything at once. In fact, you wouldn't
want to, because it's not an effective method when trying to have
many items removed. Take your time.
The basic dispute method can be especially useful in removing
items from your record regarding accounts that are closed but are
still on your credit report; especially from companies that have
since gone out of business, changed locations, or simply
instituted new computer systems that make it difficult to access
old information. If it is difficult to verify information on your
credit report, and can not be done within a "reasonable amount of
time", then it must be removed. This is true even if it was a
legitimate item that, had you not challenged it and forced them
to try and prove it, would have continued to remain on your
report for the full time allowed under the law.
Using The Dispute Method To Challenge Items
When you protest an item the CRA will probably make one effort to
verify the accuracy of their information. If they can not verify
it within a "reasonable amount of time" then they must remove it,
according to the law. It is usually not worth their time or money
to make more than one serious effort to verify an item.
Remember, you can challenge an entire entry on the basis of any
single inaccuracy. Check all items for inaccuracies such as wrong
account numbers or dates, incorrect balances, or late payments.
Dispute any inaccuracy without volunteering a correction so it
will be removed completely rather than modified.
"I was never late with payments during the time indicated. Please
delete this item."
The key words in disputing information are :
Incorrect
Obsolete
Misleading
Inaccurate
Give no more information than necessary in the dispute letter or
it may be used against you.
You must make your dispute directly to the credit reporting
agency. Although the Fair Credit Reporting Act does not require
it, the Federal Trade Commission staff recommends that "you submit
your dispute in writing, along with copies (NOT originals) of
documents that support your position" (if you have any - It's still
their responsibility to prove the item, not yours to disprove
it).
In addition to providing your complete name and address, your
letter should clearly identify which item in the report you are
disputing, explain why you dispute the information, state the
facts, and request deletion (or correction). You may want to
enclose a copy of your report with the items in question circled.
Send one separate letter for each disputed item, to avoid attracting
unnecessary attention.
Send your dispute(s) by certified mail, return receipt requested,
and keep copies of your dispute letter and enclosures. By doing
so, you can document what the credit reporting agency received.
If no acknowledgement of your dispute is received by 30 days after
the date they received your letter, send a follow-up letter demanding
they delete the item.
If you have been turned down for credit, or for an apartment, or
for any other reason as a result of your credit report, and you
dispute the items with the CRA, the CRA is required to
investigate the items in question. If the investigation reveals
an error or any information it cannot verify, a corrected version
will be sent, on your request, to anyone who received your report
in the past six months. (Job applicants can have corrected
reports sent to anyone who received a copy during the past two
years.)
Consumer Statement
If all else fails in your efforts to have an item removed, you
may append (add) a statement to any item, usually not more than
100 words, stating your version or even insisting the negative
item should not be on your report.
Unfortunately, with the points system (see Credit Scoring
section) most items are not examined closely, just given a
numerical rating based on some simple criteria. Still, you have
the right to enter your version into your credit report.
There is no charge for this service if it's requested within 30
days after you receive notice of your application denial. After
that, the CRA is allowed to charge you a reasonable fee (usually
less than ten dollars) to enter the information. At your request,
the CRA also will show your version to anyone who recently
received a copy of the old report.
Specific instructions for disputing items with each individual
CRA are included in your credit report when you receive it from
the CRA. Or, for $5.00, you can purchase the required form
letters from us, all typed up and ready for you to use, and
addressed to each of the appropriate CRAs (see ordering
information at end of this report). If you would rather do it
yourself, this report contains all the information you need to
find the required forms and information, (but it may cost you
more than $5.00 to collect them on your own).
* WHY IT IS ESSENTIAL YOU CONTACT ALL THREE MAJOR CREDIT
REPORTING AGENCIES!
What You Don't Know Can Hurt You
There are a number of CRAs, but only three of them are primarily
concerned with Consumer Credit. When you apply for credit, it is
one of these three agencies that is usually contacted. These
three main CRAs are TRW, CBI/Equifax, and Trans Union.
It has been estimated by such credible sources as Consumer
Reports that nearly half of all American consumers have
inaccurate information on their credit report, information that
simply does not belong. Others place that figure as high as 60%-
70% of all American consumers.
To complicate things even more, there is no guarantee that the
same items will appear on your credit report from each of the big
three consumer CRAs. That is why you have to order a report from
each of them, and treat each report separately.
Changing the information on one report, or removing information
from one report, may not have any effect at all on reports from
the other two CRAs. You must dispute the information contained in
each separate report, or you will not have done a thorough job.
Even worse, negative information removed from one report but left
on another may find its way back to the first report.
CRA Addresses
TRW Inc.
P.O. Box 2350
Chatsworth, CA 91313-2350
(800) 422-4879
(214) 390-3569
Fax (214) 390-1680
Trans Union Corporation
111 West Jackson, 16th Floor
Chicago, IL 60604
(800) 241-2858
(312) 408-1050
CBI/Equifax/CSC Credit
652 North Belt East Suite 133
P.O. Box 674422
Houston, TX 77267
(800) 685-1111
(713) 878-1900
FAX (713) 878-4882
(404) 612-2702 (Atlanta Equifax Office)
FAX (404) 612-3150 (Atlanta Equifax Office)
You can contact each of the three CRAs listed above for their
information on how to receive a copy of your credit report.
You should also check your local telephone directory under
"Credit Reporting Agencies" to find out exactly which CRAs have
local offices in your area. Call them all to find out if any of
them are consumer credit reporting agencies with a report on you.
If you can't find a local address for one of the big three, write
to the above central address. Don't make the mistake of thinking
that because they don't have a local office, they don't have a
report on you. And don't make the mistake of assuming there are no
small local CRAs holding their own reports on you, in addition to
the big three.
CRAs are required by law to let you know what's in your consumer
credit report. They do not have to send you an actual printed
report, but most do. Otherwise, they may ask you to come in to
their office. This probably won't happen with the big three, but
might happen if you find a small local CRA that has their own
report on you. You have the right to request information over the
phone, but before the CRA will provide information, you must
establish your identity by completing forms they will send you.
If you do wish to visit in person, you'll need to make an
appointment.
Getting a Free Report
If you have been turned down for credit during the past thirty
days you can get a report for free from the CRA the creditor
contacted. The name of the CRA is supplied in the letter of
rejection you receive. Otherwise, CRAs are permitted to charge a
small fee, usually $8 - $18. TRW, one of the biggest CRAs,
will provide you with one free report a year. TRW also has the
worst record when it comes to including misinformation in their
consumer credit reports, and you should take advantage of their
offer yearly.
Certain state laws mandate how much a credit report costs, to
find out for sure contact the CRAs and inform them of your state
of residence. Or call your State Attorney General's office, or
a local consumer advocacy group.
One way of getting a free report, if you really can't afford the
small charge, would be to apply for a credit card you know you
won't get. After being turned down for credit as the result of a
derogatory credit report you are allowed a free copy of that
report for thirty days following your receipt of the letter of
rejection. The catch is, you get a free report only from the agency
the credit provider contacted, which will probably be only one of
the big three. And, you get a record of inquiry entered into your
credit report. Too many inquiries not followed by evidence of
acceptance, such as a new account, can be held against you in
credit scoring. In fact, too many inquiries during a short time
period can be held against you in credit scoring regardless
of outcome.
Review your credit report for any mistakes or information more
than seven years old (ten years for bankruptcy). This information
should be deleted. This is supposed to happen automatically, but
it is not unusual for you to have to call their attention to the
item.
If you do not understand something, ask. The credit bureau is required
by law to explain your report to you.
* SOME LITTLE KNOWN STRATEGIES OF CREDIT REPAIR SPECIALISTS FOR
TOUGH CASES!
- Dispute Item Directly With Creditor Instead Of CRA
Effective with accounts several years old, you can have a
negative rating changed to a positive rating. Especially
effective if their records no longer indicate the circumstances
surrounding your account, and your letter to them suggests they
made a mistake in assigning you a negative credit rating, which
you have just become aware of.
Make sure to send your letter to someone specifically in charge,
for example: if your account shows you made late payments, but
you did it because you had a legitimate dispute with the creditor
at the time, address your letter to the manager or vice president
in charge of consumer relations.
- Change One Of Your Personal Identifiers
(See Credit File Segregation section for information on
"identifiers")
Inform the credit bureaus they have inaccurate information
identifying you, such as the spelling of your first name. Let
them change the info, then wait a few weeks and dispute the
negative items, identifying yourself with the new information.
The info on you will not be verifiable due to the presence of the
new identifiers, and the negative items will be deleted. Several
months later you can have the identifiers corrected again and the
negative items should remain gone. This must be done with each
of the CRAs to be effective. This is not the same as credit file
segregation, and may not always work.
- If at first you don't succeed...
Weren't able to get all the negative items removed? Wait a short
while and then try again. Think about what you're doing, maybe you
can dispute different items with each of the CRAs and rotate your
disputes between them until all the negative items have been removed.
Maybe you need to adopt a more drastic approach with some items than
with others. Just don't bombard any one CRA at any one time with so
many simultaneous disputes that they dismiss your entire effort as
"frivolous and irrelevant".
* HOW TO REMOVE JUDGEMENTS, LIENS, BANKRUPTCIES, AND OTHER
PUBLIC RECORD ITEMS FROM YOUR CREDIT FILE!
Dispute While "In Motion"
Dispute a bankruptcy or other public record item while arranging
for the files to be "in motion", and therefore difficult to find
for verification within "reasonable time".
This works best on public record items a few years old where the
records have been moved from the local court to a federal archive
center. Dispute the item on whatever grounds seem appropriate, in
order to force the CRAs into initiating an investigation into the
validity of the item. Make certain to send disputes to all the
CRAs that have a file on you.
Contact the court where the legal action was filed and request to
see the records. When they arrive, which may take a couple of
weeks, stall about coming down to review them. You want to stall
for a "reasonable amount of time" while your records are
someplace other than where the CRAs will search for them.
You can wait until the court's records division contacts you.
They will make an effort to contact you before sending the
records back if you don't review them after being informed they
have arrived. You may be able to file for an extension, and
again wait until they contact you, stretching out the process as
much as possible.
Send the disputes to each of the CRAs by certified mail, return
receipt requested, so you have proof of the "reasonable time"
period's beginning. Give the CRAs a short time to receive your
dispute, and then contact the district court records office.
Remember, if a CRA has not removed any item within "reasonable
time", and has not contacted you to inform you of their decision
within "reasonable time" (no more than 90 days after receipt of
your original dispute), you should write a letter demanding they
verify or delete the item immediately. Include a copy of your proof
of when your dispute was posted (always send copies, never give up
the originals).
You can even try forcing the issue a bit, and send them a letter
of demand before 90 days have passed. If the CRA tells you their
investigation takes 30 days, hold them to it.
This technique of "moving files around" through one mechanism,
while disputing those same items with the CRAs, can have a
variety of applications. All rely on the "reasonable time" clause
in the federal law, and on the amount of energy the CRAs actually
put into their "investigations".
You can dispute a public record or consumer credit item to a CRA
branch office in another part of the country to complicate the
investigation process. You must use an address from the district
the branch office is in. Get a legitimate street address you can
use, perhaps through a friend or relative. Do not use a PO Box
or mail-forwarding service. TRW keeps a record of all such mail
services and may enter a CHECKPOINT in your report. A
CHECKPOINT, TRANS ALERT, or CAUTION are potential fraud
indicators.
* HOW TO ESTABLISH AAA CREDIT IN 30 DAYS!
This method requires a close friend or relative with excellent credit.
Have a second card issued under a new name from an established
untarnished account. The information from the original account
will travel with the new card, even though the card has a
different name on it.
This works best for a name that has no credit history, which is
one of the main barriers to people trying to enter the world of
credit (see section on credit file segregation if the name
already has a negative credit history of its own).
Request a copy of your credit report from each of the three main
Credit Reporting Agencies to put the engines in motion and make
sure the information is recorded in your credit file.
* CREDIT FILE SEGREGATION AND THE STEPS YOU MUST
TAKE FOR IT TO SUCCEED!
Description
Credit file segregation is, according to the FTC, completely
illegal. They base this on the assumption that it will require
applying for an Employer Identification Number (almost identical
in appearance and in many functions to a social security number),
and if you apply for an EIN under false pretenses it is a
violation of federal law. So, they claim, it is 100% illegal.
On the other hand, there are many people selling high-priced
reports offering to reveal the "secret steps that must be taken"
for credit file segregation to succeed, and insisting that it is
100% legal.
Actually, it is neither 100% illegal, nor 100% legal. Like so
much else in life that is somewhat controversial, it depends on
how it's done.
In a nutshell, it is legal to obtain an EIN, but illegal if you
do so under false pretenses.
It is also legal to obtain a new Social Security number, if you
can show just cause why you need a new one, but illegal if you
obtain one fraudulently or in an attempt to evade your legal
obligations.
It is also a violation of federal law to cheat on your income
tax, knowingly provide false information on a credit application,
or send improper materials through the mail. Still, people get
away with these things all the time; however we are in no way
advocating or suggesting you knowingly violate any section of
federal or state law. If you have any questions about the
following techniques, please consult a qualified legal
professional.
Credit file segregation, done properly, is the only 100%
effective method for creating a completely clean new file. It can
be tricky, and professional legal counsel or a reputable credit
consultant is strongly advised.
File Segregation
Particularly attractive to people whose credit is so bad it would
take at least a year to repair using conventional methods.
It can also be used as a temporary measure to obtain credit while
your old file is being cleaned up. During the period that
disputed items in your credit file are being investigated, your
file may not be available from the CRAs should anyone request
credit information on you.
The basic principle behind credit file segregation is that the
three big CRAs use certain identifiers to locate files on people.
Trans Union simply looks at the social security number. If it
doesn't match any on their records, then they create a whole new
file for the new SS#.
TRW and CBI/Equifax check for a number of identifiers before they
reach your SS#, beginning with last name, first name, middle
initial, spouse, house number, street name, zip code, previous
address, and finally SS#. If any one of those identifiers doesn't
match they stop searching at that point and create a whole new
credit file.
However, it's not that simple. The point of credit file
segregation is to manipulate the CRAs into creating a new file
for you, and then to keep it segregated from your old file. That
is why there are a number of essential follow up steps to keep
your new file from merging with your old one.
To Get A New File
Altering just your name, ss#, or d.o.b. are, by themselves,
ineffective, insufficient, or patently illegal methods. You must
alter several of the specific identifiers used by CRAs to locate
your file, and pay attention to the follow up steps to insure
that the new file remains separate from your old one. The
following techniques bear some resemblance to creating a total
new identity, but in fact they fall short of doing that. It is
not the intent of this process to create a new identity for you,
just a new credit file. Remember that even with a new credit
file you are still responsible for all your old debts.
Strategies To Induce The CRA To Create A New File For You:
Change at least part of your name, your address, and your SS#.
1. Use your maiden name (some people choose to use their maiden
name even after getting married, and it has become a more
common practice).
2. Use a different first name and different address. Many people
use their full middle name in place of their first name, a
common practice and not in and of itself suspicious.
3. A completely new address must be used to prevent your old
files from merging with your new one.
4. Apply for a new SS#. "Any employee may have his account
number changed at any time by applying to the Social Security
Board and showing good reason for the change. With that
exception, only one account number will be assigned to an
employee." (Social Security Act)
5. Instead of a Social Security numner, apply for an Employer
Identification Number and use it in place of you SS#. This
looks and in many ways acts just like a social security
number. You can apply for an EIN through the IRS.
More desperate measures might include:
1.) Make up a new number.
2.) Alter your existing number.
3.) Apply for a new number under an alternate identity.
NOTE: It is a federal crime to misrepresent your social security
number.
Creating a new file:
You must create a new file at each of the major credit bureaus.
Order a copy of your report from each bureau using the new
identifying information. If your report comes back marked NO
RECORD FOUND you have succeeded in creating a new credit file.
Follow-up Procedures to Keep Your New File Separate
1. Obtain a new driver's license with your new first name, or
maiden name, and your new address. Simply ask for a
replacement of your old license and tell them you are now
using a different first name, or last name, and new address.
If you are using your maiden name, or middle name, none of
this should seem unusual or suspicious, and they will simply
issue you a new license with the new information and your old
driver's license number.
2. Pick a new bank and open a checking and savings account under
new name and address.
3. Have paychecks made out to your new name. Once again, if you
are merely using your maiden name, or middle name, it's
nobody's business but your own, and shouldn't be an issue with
your payroll dept.
4. In order to use the credit file segregation method
successfully you must always use your new information. If you
ever use your old address or your original name your old file
may merge with your new one. TRW compiles a list of mail
servers, so you must really have a legitimate alternate
address.
REMEMBER, IN UTILIZING CREDIT FILE SEGREGATION:
- It is legal as long as there is no intent to defraud.
- Creating a new file does not relieve you of your previous debts
or responsibilities.
- The services of a competent attorney are highly recommended
before using any of these techniques.
Keep in mind that, according to the FTC:
"It is a federal crime to make any false statements on a loan or
credit application, which... (a fraudulent) credit repair company
may advise you to do. It is a federal crime to misrepresent your
social security number. It also is a federal crime to obtain an
EIN (Employer Identification Number) from the IRS under false
pretenses."
One additional hazard of incorrectly handling credit file
segregation is getting one or more CHECKPOINTs, TRANS ALERTs or
CAUTIONs entered into your credit report, resulting in worse
credit.
* HOW TO GET A MAJOR CREDIT CARD NOW!
Types of Credit Cards
There are two types of credit card accounts: Secured and
Unsecured. Secured and unsecured credit cards work the same way;
both can be used to pay for goods and services. However, a
secured card requires you to open and maintain a savings account
as security for your line of credit; an unsecured card does not.
If you need a credit card so you can rent a car, join a video
club, cash a check, make plane or hotel reservations, or any of
the other essential modern conveniences reserved for major credit
card holders, and you've been rejected for an unsecured major
credit card due to bad credit or no credit history, then getting
a secured card is definitely the way to go.
You can obtain a secured credit card from any one of many banks
offering a secured credit card account. Some accounts can be
opened with as little as $100, and no one can tell it's a secured
credit card as opposed to an unsecured card. Even your credit
report will not distinguish it as such. In some cases it can
even act like a cross between a secured and an unsecured card
because some banks offer a credit line of 150 - 200% of the
amount on deposit. Do not fall for scams that offer secured
cards with heavy "processing" fees or ask you to call "900"
numbers.
It really helps on your application if you have a checking and
savings account even if you don't have much, or anything, in
them. This is because most creditors work on a point system, and
don't delve too deeply into the details of your credit history.
They will award you points simply for having a checking and
savings account. They will also award you points if you have
your own phone number. It's fairly easy to get an unsecured
credit card, but even if 95% of the applicants are accepted, that
means 5% are not. Cover yourself every way you can on the points
system.
Credit Scoring
To illustrate how credit scoring works, consider the following
example that uses only three factors to determine whether someone
is creditworthy. (Most systems have 6 to 15 factors.)
EXAMPLE
Monthly income Points Awarded
Less than $400 0
$400 to $650 3
$651 to $800 7
$801 to $1,200 12
$1,200 + 15
Age 21-28 11
28-35 5
36-48 2
48-61 12
61 + 15
Telephone in home
Yes 12
No 0
Some credit scoring systems award fewer points to people in their
thirties and forties, because these individuals often have a
relatively high amount of debt at that stage of their lives. The
law permits creditors using properly-designed scoring systems to
award points based on age, but people who are 62 or older must
receive the maximum number of points for this factor.
If, for example, you needed a score of 25 to get credit, you
would need to make sure you had enough income at a certain age
(and, perhaps a telephone) to qualify for credit.
Remember, this example shows very generally how a credit scoring
system works. Most credit scoring systems consider more factors
than this example -- sometimes as many as 15 or 20. Usually
these factors are obviously related to your credit worthiness.
Sometimes, however, additional factors are included that may seem
unusual. For example, some systems score the age of your car.
While this may seem unrelated to creditworthiness, it is legal to
use factors like these as long as they do not illegally
discriminate on race, sex, martial status, national origin,
religion, or age.
The FTC provides the following information in its pamphlets on
secured credit cards:
"If you are interested in applying for a secured credit card, the
BankCard Holders of America (BHA) provides a list of institutions
offering secured cards. BHA's "Secured Card List" is free to BHA
members, $4.00 for non-members. Write to:
BankCard Holders of America
560 Herndon Parkway, Suite 120
Herndon, VA 22070".
Moving From Secured To Unsecured
To move on from a secured major credit card to an unsecured major
credit card, or unsecured department store and gas cards:
1. Obtain a copy of your credit reports from each of the three
major consumer credit bureaus in your area.
2. Remove negative items using the methods detailed in this
report.
3. Open a savings and checking account.
4. Obtain a secured credit card (see section above). If you are
in a rush to get a secured card you can do this step first,
but you should follow all of these steps before applying for
any unsecured cards.
5. Used the secured card to get dept. store card(s). Many credit
card issuers will not give you a card without your already
having a major credit card, but no one can tell a major card
that is secured from one that is unsecured. So your secured
credit card should enable you to qualify.
6. Make accelarated payments (pay off your accounts ahead of schedule).
7. Apply for a major unsecured card.
Additionally, some banks that issue secured cards allow you to
obtain an unsecured card after 12-18 months, if you have a good
payment record. You can then close the secured account, and withdraw
your money along with any accumulated interest.
Make certain that the bank issuing your secured card reports to at
least one of the CRAs, or it won't contribute toward your building
a credit history. Not all banks, or creditors in general, have an
arrangement with the CRAs to provide information.
*DEALING WITH YOUR CURRENT DEBT LOAD
Remember, cleaning up your credit file or even creating a whole
new one does not in any way relieve you of your legal obligation
to pay your debts. If your problem is not merely bad credit, but
actual overwhelming debt, there are a few things you can try.
Negotiate Directly With The Creditor
This can be the most effective way of eliminating current
outstanding debt. Deal directly with the creditor and arrange to
pay a percentage of the debt, in exchange for a positive credit
rating. This is especially important if a collection agency has
been called in: send the collection agency a "Cease and Desist"
letter, and then immediately contact the creditor directly.
Get the creditor to accept as full settlement a reduced final
amount, 70% is realistic, in exchange for removing the negative
item. Make sure the letter is carefully written, and signed by
the creditor and whomever among its agents you have been dealing
with before they receive your payment.
This is a good way to go if you have taken out a loan to
consolidate your debts, and you plan on closing an account after
paying it off. You can use the loan to make good on your promise
to pay off the debt at once, and still get them to lower your
total amount of debt while receiving a positive final credit
rating from them. They don't have to chase you, or use a
collection agency that will take a piece for themselves. You get
a reduction in your debt and a perfectly good credit rating.
Everybody wins.
If your debt has already gone into collection you may have to deal
directly with the collection agency. They might have actually
purchased your debt from the creditor, possibly for less than half
its original value (see, they beat you to it), and in this case
you'll have to negotiate with them. You may still be able to get
them to reduce your overall debt as they'll probably still be making
a profit.
Where to Find Low-Cost Help
If you need help in dealing with your debts, you may want to
contact a Consumer Credit Counseling Service (CCCS). This is a
non-profit organization with more than 850 offices located in 50
states. CCCS counselors will try to arrange a repayment plan
that is acceptable to you and your creditors. They will also
help you set up a realistic budget and plan future expenses.
These services are offered at little or no charge to you. You
can find the CCCS office nearest you by checking the White Pages
of your telephone directory or by calling from a touch-tone phone
1-800-388-2227 to get the telephone number. However, if you have
other questions, contact this FTC-approved organization:
National Foundation for Consumer Credit, Inc.
8611 Second Avenue, Suite 100
Silver Spring, Maryland 20910
(301) 589-5600
In addition, non-profit counseling programs are sometimes
operated by universities, military bases, credit unions, and
housing authorities. They are likely to charge little or nothing
for their assistance. Or, you can check with your local bank or
consumer protection office to see if it has a listing of
reputable, low-cost financial counseling services.
SUMMARY
We hope this report has been of value to you. It is the result of
painstaking research, and extensive real life testing with the help
of a number of people in various degrees of financial difficulty.
You can either collect the various forms and compose the letters you
need, or you can order our complete kit for only $5.00. This kit
contains not only the needed forms and letters, but also additional
materials you may find helpful.
Copyright 1996 Runes Publishing/Russell Alexander
You may copy and distribute this FREE report as long as the report is
in its entirety, including this Copyright notice and the following
order form, and distributed at no charge. Reproduction of this report
or sections of this report for the purpose of commercial sale is strictly
prohibited and will be prosecuted as a violation of the Federal Copyright
Law.
=======================================================================
Yes, I would like to order the Credit Repair Kit for only $5.00!
Enclosed is my check or money order, made out to:
Russell Alexander
c/o Runes Publishing
7 Rita Drive
Brentwood, NY 11717
_______________________________________________
My Name
_______________________________________________
My Address
________________________________________________
City, State, Zip
Please allow 1 - 3 weeks for delivery, by first class mail.
repairing your credit on your own immediately. You can use
the information in this report to get all the forms and write all
the letters on your own. Full details for doing so are provided.
If you prefer, for $5.00 we can provide all the form letters and
materials you need (see ordering details at end of this report).
Either way, we hope the information contained in this report will
be of value to you, and answers many of your questions about how
credit repair is actually done.
NOTE: The authors of this report are not in the business of
rendering legal services. The items in this report are
detailed in as objective a manner as possible, and can be used
both in accordance with and disregard of the law. The publisher
and authors disclaim any responsibility for personal loss or
liabilities caused by the use or misuse of any information
contained herein. If you have legal questions about any of the
techniques reported on, or are considering using any of them in a
manner that might be regarded as at all questionable, the advice and
services of a fully qualified legal professional are highly recommended.
TABLE OF CONTENTS:
* WHY YOU DON'T HAVE TO WAIT YEARS TO GET ITEMS REMOVED!
* WHY YOU CAN'T GET THE FULL STORY FROM GOV'T BOOKLETS ON
CREDIT REPAIR!
* THE FEDERAL CREDIT LAWS AND WHAT THEY REALLY MEAN FOR YOU AS A CONSUMER!
* HOW TO REPAIR YOUR CREDIT USING THE LAW TO YOUR ADVANTAGE
* WHY IT IS ESSENTIAL YOU CONTACT ALL THREE MAJOR CREDIT
REPORTING AGENCIES!
* LITTLE KNOWN STRATEGIES OF CREDIT REPAIR SPECIALISTS FOR
TOUGH CASES.
* HOW TO REMOVE JUDGEMENTS, LIENS, BANKRUPTCIES, AND OTHER
PUBLIC RECORD ITEMS FROM YOUR CREDIT FILE!
* HOW TO ESTABLISH AAA CREDIT IN 30 DAYS!
* CREDIT FILE SEGREGATION AND THE STEPS YOU MUST
TAKE FOR IT TO SUCCEED!
* HOW TO GET A MAJOR CREDIT CARD NOW!
* DEALING WITH YOUR CURRENT DEBT LOAD
* SUMMARY
==================================================
Important terminology:
CRA - Credit Reporting Agency. There are many CRAs, but the big
three involved in consumer credit reporting, as opposed to
business credit reporting, are TRW, CBI/Equifax, and
Trans Union.
FTC - Federal Trade Commission
FCRA - Fair Credit Reporting Act
* WHY YOU DON'T HAVE TO WAIT YEARS TO GET ITEMS REMOVED!
The law says that credit reporting agencies are permitted to keep
negative credit information on your file for up to seven years,
and bankruptcies for up to ten. Many people mistakenly assume
this to mean credit reporting agencies are legally obligated to
keep items on for that length of time.
They are not legally obligated to retain items for any length of
time. They are only obligated to remove them completely and
without question after a certain time. You have the right to
protest items and have any item removed at any time if you can
demonstrate a reason why it should be removed, or if they can not
verify its validity within a "reasonable amount of time".
* WHY YOU CAN'T GET THE FULL STORY FROM GOV'T BOOKLETS ON
CREDIT REPAIR!
It is not the job of government pamphlets and brochures to
explain loopholes or expose weaknesses in the law. The pamphlets
themselves are often relentlessly redundant, and while they are
excellent sources of information on the textual content of the
law and your rights in theory, they are not concerned with
"creative exercise" of the law. Dozens and dozens of free
pamphlets on credit law and credit repair, most of them endlessly
repeating the same points over and over again, can be obtained
from the FTC. Their esssential message is that time is the only
way to remove negative items. It certainly is the only
absolutely guaranteed 100% effective way, but hardly the only
approach you have to take. For more information on credit-
related government pamphlets, write to the Federal Trade
Commission, Washington, D.C. 20580. You also may write to that
address for a free copy of Best Sellers, which lists all the
FTC's consumer and business publications.
* THE FEDERAL CREDIT LAWS AND WHAT THEY REALLY MEAN
FOR YOU AS A CONSUMER!
- Fair Credit Billing Act
Under this law, you may be able to withhold payment of the
disputed amount of your credit card bill until the dispute is
resolved. You must notify your credit card company of your
problem in writing within 60 days of receiving your bill.
- Fair Credit Reporting Act
This Act protects you by requiring credit reporting agencies
to maintain correct and complete information in your credit
file. You have the right to see your file on request. If you
were denied credit because of information in your file, you have
the right to see it at no charge. If you find incorrect or
incomplete information, notify the credit reporting agency. They
must investigate and correct errors.
- Fair Debt Collection Practices Act
Certain methods of debt collection are prohibited by this law:
harassment, the use of false statements, and other unfair
practices. You can stop a collector from contacting you by
writing a letter to the collection agency. The agency can then
only contact you to say what action, if any, will be taken.
- Equal Credit Opportunity Act
Under this law, it is illegal for creditors to discriminate
against applicants on the basis of sex, race, marital status,
national origin, religion, age, or because they get public
assistance income.
- Truth in Lending Act
This Act requires lenders to give you cost and terms information
(including the annual percentage rate, "APR") in writing before you
sign a loan agreement.
- Credit Practices Rule
Under this rule, finance companies, retailers, and credit unions
are prohibited from requiring you to give up specific rights, agree
to wage assignments, or use certain household goods as collateral.
It also requires that a notice of potential liability be given to
consumers before they cosign for loans.
For further information about these laws, contact your regional
Federal Trade Commission (FTC) office, or the Public Reference Branch
of the FTC at (202) 326-2222.
The Bad News
Basically, you can't expect too much in the way of intervention
in individual cases from the state and federal credit-regulating
bodies. The purpose of reports like this one are an attempt to
fill the information gap for individual consumers trying to
handle their own situations, and not involved in class-action
disputes or or other large legal actions that would interest the
federal and state governments.
The federal laws governing credit practices are contained in the
following codes:
Fair Credit Reporting Act
Equal Credit Opportunity Act
Truth In Lending Act
Fair Credit Billing Act
Fair Debt Collector Practices Act
Credit Practices Rule
(For brief definitions of these codes, see the section above)
The FTC is responsible for enforcing all these acts. How much
support you can actually expect to receive from the FTC is
questionable. In their own words:
"While the FTC does not handle individual cases, it can act
against companies when it sees a pattern of possible law
violations developing."
Of course, the point of protection under the law is your right to
receive just compensation if someone has violated your rights in
dealing with you. In other words, you have the right to sue,
using the federal and state laws to establish your grounds. This
is fine if you have been the victim of unfair credit practices,
or discrimination, but does little to help you in your battle to
clean up your credit report without going to court.
If you should want to file a complaint with the FTC, address your
complaints to:
Director
Federal Trade Commission
Pennsylvania Avenue & Sixth Street, N.W.
Washington, D.C. 20580
(202) 523-3830
In addition there are state laws that differ in how they regulate
credit practices within their particular state. The state
Attorney General's office and local consumer advocacy groups can
be of assistance in letting you know what additional rights your
local laws provide.
The Good News
You have certain rights as a consumer under federal law which can
be used to your advantage. These are commonly accepted rights
and should not in and of themselves be a point of contention.
You have the right to know what your consumer credit report says
about you. This is a right you should have no trouble
exercising, beyond the usual bumblings of bureaucrats and
underpaid clerks.
You have the right to dispute any items in your credit report.
You can dispute any item without regard to how long it has been
present in your report, one day, one year, or more. After seven
years (ten for bankruptcy) it must be automatically removed
according to federal law.
There is no mandated limit on how often you can dispute the same
item. If it isn't removed the first time, you can try again
later.
You have the right to have any disputed item investigated within
a "reasonable amount of time", considered to be 90 days from the
date the CRA receives your dispute. Some CRAs complete their
investigation in as little as 30 days. There is also a serious
limit to how much energy they can afford to devote to any one
investigation.
If during that time they can not verify the item for any reason,
it must be removed. This is a very strong right, and the basis
for many credit repair strategies.
* HOW TO REPAIR YOUR CREDIT USING THE LAW TO YOUR ADVANTAGE!
Automatic Removal Method
This is the method recommended by the FTC, and by people who
accept the defeatist attitude that nothing else can be done. If
you don't mind waiting the time required, then this will usually
work without your having to take any other action (occasionally a
reminder letter to the credit reporting agencies is needed to
wake them up), and it is 100% effective for removal of common
consumer credit items. But you will be waiting for a long time.
Limits on how long negative material may remain on your credit
file are mandated by the Fair Credit Reporting Act. Negative
items MUST be removed after seven years, except bankruptcies
which can remain on your record for up to ten years. However,
this does not mean that negative items must remain on your report
for that length of time, only that they CAN. It is your right to
challenge the negative information on your credit report at any
time, and have the items removed if you can demonstrate under the
law why they should be erased.
Dispute Method
This is the basic method used in challenging negative items on
your credit report. Still, this method is somewhat misunderstood,
and can be approached in several ways, constituting different
methods of using the law. Most of the techniques detailed in this
report are variations of the dispute method.
The Fair Credit Reporting Act requires disputed items to be
investigated within a "reasonable amount of time" unless
"frivolous or irrelevant". Within 30 days of their receiving
your dispute you must recive written notice acknowledging your
dispute. No later than 90 days after receiving your dispute
they must either verify the item or delete it (in your dispute
letter you must demand the item be "deleted", not "corrected").
You should receive a written explanation of their decision.
Also, many CRAs claim their investigations take only 30 days
or less. If the CRA you are writing to makes that claim in
their instructions then hold them to it.
If you have not received a letter acknowleging your dispute
within 30 days, as required by law, then you should write a
letter demanding they remove the item immediately. Send your
original dispute by return-receipt-requested certified mail,
so you have a record of exactly when they in fact received it.
Similarly, if they claim their investigations take 30 days and
you haven't heard from them regarding a decision after that time
has passed, write a letter demanding they verify or delete the
item immediately. Assert your rights.
It is important to understand that you do not have the
responsibility to prove the item is incorrect, they are the ones
who must verify the item or remove it.
Which brings us to the "frivolous and irrelevant" clause in the
federal law. What this means is, if the CRA you are disputing
items with considers your dispute to be such an obvious attempt
to have legitimate items removed that they feel the entire
dispute is undoubtedly without merit, then they are allowed under
federal law to disregard the entire dispute without needing to
investigate it.
This is the problem with going through some unscrupulous "credit
repair specialists". A less-than-ethical agent may take your
money and then simply send out a letter to each of the three main
consumer CRAs disputing every negative item all at once on your
report.
If you have only one or two negative items that have been
blocking your credit, and if you are one of the many people with
negative material on their credit report that legitimately does
not belong, then this may work for you without attracting
suspicion. Just because a CRA can dismiss a dispute as
"frivolous and irrelevant" does not mean they have the right to
label every dispute as such.
If, however, you have many negative items on your report, or
items of a nature that require a more sophisticated approach,
then all this letter will do is have them label your claim as
"frivolous and irrelevant", and you will be worse off than before
you gave your money to this "repair specialist". You might also
now owe money to this agent who may not take any further steps on
your behalf.
There are many ways around this when you do the whole process
yourself. First of all, you must obtain copies of your credit
report yourself(see instructions below). Then you must determine
how bad your situation is and plan your attack. It may have
taken you years to mess up your credit, you have to accept that
if your situation is really bad then it may take months to repair
years of damage.
Don't be in too much of a rush, and try to avoid that "frivolous
and irrelevant" response. The simplest way to do this, if you
are dealing with multiple items, is to challenge only a few items
at a time. There is nothing illegal about this: you are not
obligated to challenge everything at once. In fact, you wouldn't
want to, because it's not an effective method when trying to have
many items removed. Take your time.
The basic dispute method can be especially useful in removing
items from your record regarding accounts that are closed but are
still on your credit report; especially from companies that have
since gone out of business, changed locations, or simply
instituted new computer systems that make it difficult to access
old information. If it is difficult to verify information on your
credit report, and can not be done within a "reasonable amount of
time", then it must be removed. This is true even if it was a
legitimate item that, had you not challenged it and forced them
to try and prove it, would have continued to remain on your
report for the full time allowed under the law.
Using The Dispute Method To Challenge Items
When you protest an item the CRA will probably make one effort to
verify the accuracy of their information. If they can not verify
it within a "reasonable amount of time" then they must remove it,
according to the law. It is usually not worth their time or money
to make more than one serious effort to verify an item.
Remember, you can challenge an entire entry on the basis of any
single inaccuracy. Check all items for inaccuracies such as wrong
account numbers or dates, incorrect balances, or late payments.
Dispute any inaccuracy without volunteering a correction so it
will be removed completely rather than modified.
"I was never late with payments during the time indicated. Please
delete this item."
The key words in disputing information are :
Incorrect
Obsolete
Misleading
Inaccurate
Give no more information than necessary in the dispute letter or
it may be used against you.
You must make your dispute directly to the credit reporting
agency. Although the Fair Credit Reporting Act does not require
it, the Federal Trade Commission staff recommends that "you submit
your dispute in writing, along with copies (NOT originals) of
documents that support your position" (if you have any - It's still
their responsibility to prove the item, not yours to disprove
it).
In addition to providing your complete name and address, your
letter should clearly identify which item in the report you are
disputing, explain why you dispute the information, state the
facts, and request deletion (or correction). You may want to
enclose a copy of your report with the items in question circled.
Send one separate letter for each disputed item, to avoid attracting
unnecessary attention.
Send your dispute(s) by certified mail, return receipt requested,
and keep copies of your dispute letter and enclosures. By doing
so, you can document what the credit reporting agency received.
If no acknowledgement of your dispute is received by 30 days after
the date they received your letter, send a follow-up letter demanding
they delete the item.
If you have been turned down for credit, or for an apartment, or
for any other reason as a result of your credit report, and you
dispute the items with the CRA, the CRA is required to
investigate the items in question. If the investigation reveals
an error or any information it cannot verify, a corrected version
will be sent, on your request, to anyone who received your report
in the past six months. (Job applicants can have corrected
reports sent to anyone who received a copy during the past two
years.)
Consumer Statement
If all else fails in your efforts to have an item removed, you
may append (add) a statement to any item, usually not more than
100 words, stating your version or even insisting the negative
item should not be on your report.
Unfortunately, with the points system (see Credit Scoring
section) most items are not examined closely, just given a
numerical rating based on some simple criteria. Still, you have
the right to enter your version into your credit report.
There is no charge for this service if it's requested within 30
days after you receive notice of your application denial. After
that, the CRA is allowed to charge you a reasonable fee (usually
less than ten dollars) to enter the information. At your request,
the CRA also will show your version to anyone who recently
received a copy of the old report.
Specific instructions for disputing items with each individual
CRA are included in your credit report when you receive it from
the CRA. Or, for $5.00, you can purchase the required form
letters from us, all typed up and ready for you to use, and
addressed to each of the appropriate CRAs (see ordering
information at end of this report). If you would rather do it
yourself, this report contains all the information you need to
find the required forms and information, (but it may cost you
more than $5.00 to collect them on your own).
* WHY IT IS ESSENTIAL YOU CONTACT ALL THREE MAJOR CREDIT
REPORTING AGENCIES!
What You Don't Know Can Hurt You
There are a number of CRAs, but only three of them are primarily
concerned with Consumer Credit. When you apply for credit, it is
one of these three agencies that is usually contacted. These
three main CRAs are TRW, CBI/Equifax, and Trans Union.
It has been estimated by such credible sources as Consumer
Reports that nearly half of all American consumers have
inaccurate information on their credit report, information that
simply does not belong. Others place that figure as high as 60%-
70% of all American consumers.
To complicate things even more, there is no guarantee that the
same items will appear on your credit report from each of the big
three consumer CRAs. That is why you have to order a report from
each of them, and treat each report separately.
Changing the information on one report, or removing information
from one report, may not have any effect at all on reports from
the other two CRAs. You must dispute the information contained in
each separate report, or you will not have done a thorough job.
Even worse, negative information removed from one report but left
on another may find its way back to the first report.
CRA Addresses
TRW Inc.
P.O. Box 2350
Chatsworth, CA 91313-2350
(800) 422-4879
(214) 390-3569
Fax (214) 390-1680
Trans Union Corporation
111 West Jackson, 16th Floor
Chicago, IL 60604
(800) 241-2858
(312) 408-1050
CBI/Equifax/CSC Credit
652 North Belt East Suite 133
P.O. Box 674422
Houston, TX 77267
(800) 685-1111
(713) 878-1900
FAX (713) 878-4882
(404) 612-2702 (Atlanta Equifax Office)
FAX (404) 612-3150 (Atlanta Equifax Office)
You can contact each of the three CRAs listed above for their
information on how to receive a copy of your credit report.
You should also check your local telephone directory under
"Credit Reporting Agencies" to find out exactly which CRAs have
local offices in your area. Call them all to find out if any of
them are consumer credit reporting agencies with a report on you.
If you can't find a local address for one of the big three, write
to the above central address. Don't make the mistake of thinking
that because they don't have a local office, they don't have a
report on you. And don't make the mistake of assuming there are no
small local CRAs holding their own reports on you, in addition to
the big three.
CRAs are required by law to let you know what's in your consumer
credit report. They do not have to send you an actual printed
report, but most do. Otherwise, they may ask you to come in to
their office. This probably won't happen with the big three, but
might happen if you find a small local CRA that has their own
report on you. You have the right to request information over the
phone, but before the CRA will provide information, you must
establish your identity by completing forms they will send you.
If you do wish to visit in person, you'll need to make an
appointment.
Getting a Free Report
If you have been turned down for credit during the past thirty
days you can get a report for free from the CRA the creditor
contacted. The name of the CRA is supplied in the letter of
rejection you receive. Otherwise, CRAs are permitted to charge a
small fee, usually $8 - $18. TRW, one of the biggest CRAs,
will provide you with one free report a year. TRW also has the
worst record when it comes to including misinformation in their
consumer credit reports, and you should take advantage of their
offer yearly.
Certain state laws mandate how much a credit report costs, to
find out for sure contact the CRAs and inform them of your state
of residence. Or call your State Attorney General's office, or
a local consumer advocacy group.
One way of getting a free report, if you really can't afford the
small charge, would be to apply for a credit card you know you
won't get. After being turned down for credit as the result of a
derogatory credit report you are allowed a free copy of that
report for thirty days following your receipt of the letter of
rejection. The catch is, you get a free report only from the agency
the credit provider contacted, which will probably be only one of
the big three. And, you get a record of inquiry entered into your
credit report. Too many inquiries not followed by evidence of
acceptance, such as a new account, can be held against you in
credit scoring. In fact, too many inquiries during a short time
period can be held against you in credit scoring regardless
of outcome.
Review your credit report for any mistakes or information more
than seven years old (ten years for bankruptcy). This information
should be deleted. This is supposed to happen automatically, but
it is not unusual for you to have to call their attention to the
item.
If you do not understand something, ask. The credit bureau is required
by law to explain your report to you.
* SOME LITTLE KNOWN STRATEGIES OF CREDIT REPAIR SPECIALISTS FOR
TOUGH CASES!
- Dispute Item Directly With Creditor Instead Of CRA
Effective with accounts several years old, you can have a
negative rating changed to a positive rating. Especially
effective if their records no longer indicate the circumstances
surrounding your account, and your letter to them suggests they
made a mistake in assigning you a negative credit rating, which
you have just become aware of.
Make sure to send your letter to someone specifically in charge,
for example: if your account shows you made late payments, but
you did it because you had a legitimate dispute with the creditor
at the time, address your letter to the manager or vice president
in charge of consumer relations.
- Change One Of Your Personal Identifiers
(See Credit File Segregation section for information on
"identifiers")
Inform the credit bureaus they have inaccurate information
identifying you, such as the spelling of your first name. Let
them change the info, then wait a few weeks and dispute the
negative items, identifying yourself with the new information.
The info on you will not be verifiable due to the presence of the
new identifiers, and the negative items will be deleted. Several
months later you can have the identifiers corrected again and the
negative items should remain gone. This must be done with each
of the CRAs to be effective. This is not the same as credit file
segregation, and may not always work.
- If at first you don't succeed...
Weren't able to get all the negative items removed? Wait a short
while and then try again. Think about what you're doing, maybe you
can dispute different items with each of the CRAs and rotate your
disputes between them until all the negative items have been removed.
Maybe you need to adopt a more drastic approach with some items than
with others. Just don't bombard any one CRA at any one time with so
many simultaneous disputes that they dismiss your entire effort as
"frivolous and irrelevant".
* HOW TO REMOVE JUDGEMENTS, LIENS, BANKRUPTCIES, AND OTHER
PUBLIC RECORD ITEMS FROM YOUR CREDIT FILE!
Dispute While "In Motion"
Dispute a bankruptcy or other public record item while arranging
for the files to be "in motion", and therefore difficult to find
for verification within "reasonable time".
This works best on public record items a few years old where the
records have been moved from the local court to a federal archive
center. Dispute the item on whatever grounds seem appropriate, in
order to force the CRAs into initiating an investigation into the
validity of the item. Make certain to send disputes to all the
CRAs that have a file on you.
Contact the court where the legal action was filed and request to
see the records. When they arrive, which may take a couple of
weeks, stall about coming down to review them. You want to stall
for a "reasonable amount of time" while your records are
someplace other than where the CRAs will search for them.
You can wait until the court's records division contacts you.
They will make an effort to contact you before sending the
records back if you don't review them after being informed they
have arrived. You may be able to file for an extension, and
again wait until they contact you, stretching out the process as
much as possible.
Send the disputes to each of the CRAs by certified mail, return
receipt requested, so you have proof of the "reasonable time"
period's beginning. Give the CRAs a short time to receive your
dispute, and then contact the district court records office.
Remember, if a CRA has not removed any item within "reasonable
time", and has not contacted you to inform you of their decision
within "reasonable time" (no more than 90 days after receipt of
your original dispute), you should write a letter demanding they
verify or delete the item immediately. Include a copy of your proof
of when your dispute was posted (always send copies, never give up
the originals).
You can even try forcing the issue a bit, and send them a letter
of demand before 90 days have passed. If the CRA tells you their
investigation takes 30 days, hold them to it.
This technique of "moving files around" through one mechanism,
while disputing those same items with the CRAs, can have a
variety of applications. All rely on the "reasonable time" clause
in the federal law, and on the amount of energy the CRAs actually
put into their "investigations".
You can dispute a public record or consumer credit item to a CRA
branch office in another part of the country to complicate the
investigation process. You must use an address from the district
the branch office is in. Get a legitimate street address you can
use, perhaps through a friend or relative. Do not use a PO Box
or mail-forwarding service. TRW keeps a record of all such mail
services and may enter a CHECKPOINT in your report. A
CHECKPOINT, TRANS ALERT, or CAUTION are potential fraud
indicators.
* HOW TO ESTABLISH AAA CREDIT IN 30 DAYS!
This method requires a close friend or relative with excellent credit.
Have a second card issued under a new name from an established
untarnished account. The information from the original account
will travel with the new card, even though the card has a
different name on it.
This works best for a name that has no credit history, which is
one of the main barriers to people trying to enter the world of
credit (see section on credit file segregation if the name
already has a negative credit history of its own).
Request a copy of your credit report from each of the three main
Credit Reporting Agencies to put the engines in motion and make
sure the information is recorded in your credit file.
* CREDIT FILE SEGREGATION AND THE STEPS YOU MUST
TAKE FOR IT TO SUCCEED!
Description
Credit file segregation is, according to the FTC, completely
illegal. They base this on the assumption that it will require
applying for an Employer Identification Number (almost identical
in appearance and in many functions to a social security number),
and if you apply for an EIN under false pretenses it is a
violation of federal law. So, they claim, it is 100% illegal.
On the other hand, there are many people selling high-priced
reports offering to reveal the "secret steps that must be taken"
for credit file segregation to succeed, and insisting that it is
100% legal.
Actually, it is neither 100% illegal, nor 100% legal. Like so
much else in life that is somewhat controversial, it depends on
how it's done.
In a nutshell, it is legal to obtain an EIN, but illegal if you
do so under false pretenses.
It is also legal to obtain a new Social Security number, if you
can show just cause why you need a new one, but illegal if you
obtain one fraudulently or in an attempt to evade your legal
obligations.
It is also a violation of federal law to cheat on your income
tax, knowingly provide false information on a credit application,
or send improper materials through the mail. Still, people get
away with these things all the time; however we are in no way
advocating or suggesting you knowingly violate any section of
federal or state law. If you have any questions about the
following techniques, please consult a qualified legal
professional.
Credit file segregation, done properly, is the only 100%
effective method for creating a completely clean new file. It can
be tricky, and professional legal counsel or a reputable credit
consultant is strongly advised.
File Segregation
Particularly attractive to people whose credit is so bad it would
take at least a year to repair using conventional methods.
It can also be used as a temporary measure to obtain credit while
your old file is being cleaned up. During the period that
disputed items in your credit file are being investigated, your
file may not be available from the CRAs should anyone request
credit information on you.
The basic principle behind credit file segregation is that the
three big CRAs use certain identifiers to locate files on people.
Trans Union simply looks at the social security number. If it
doesn't match any on their records, then they create a whole new
file for the new SS#.
TRW and CBI/Equifax check for a number of identifiers before they
reach your SS#, beginning with last name, first name, middle
initial, spouse, house number, street name, zip code, previous
address, and finally SS#. If any one of those identifiers doesn't
match they stop searching at that point and create a whole new
credit file.
However, it's not that simple. The point of credit file
segregation is to manipulate the CRAs into creating a new file
for you, and then to keep it segregated from your old file. That
is why there are a number of essential follow up steps to keep
your new file from merging with your old one.
To Get A New File
Altering just your name, ss#, or d.o.b. are, by themselves,
ineffective, insufficient, or patently illegal methods. You must
alter several of the specific identifiers used by CRAs to locate
your file, and pay attention to the follow up steps to insure
that the new file remains separate from your old one. The
following techniques bear some resemblance to creating a total
new identity, but in fact they fall short of doing that. It is
not the intent of this process to create a new identity for you,
just a new credit file. Remember that even with a new credit
file you are still responsible for all your old debts.
Strategies To Induce The CRA To Create A New File For You:
Change at least part of your name, your address, and your SS#.
1. Use your maiden name (some people choose to use their maiden
name even after getting married, and it has become a more
common practice).
2. Use a different first name and different address. Many people
use their full middle name in place of their first name, a
common practice and not in and of itself suspicious.
3. A completely new address must be used to prevent your old
files from merging with your new one.
4. Apply for a new SS#. "Any employee may have his account
number changed at any time by applying to the Social Security
Board and showing good reason for the change. With that
exception, only one account number will be assigned to an
employee." (Social Security Act)
5. Instead of a Social Security numner, apply for an Employer
Identification Number and use it in place of you SS#. This
looks and in many ways acts just like a social security
number. You can apply for an EIN through the IRS.
More desperate measures might include:
1.) Make up a new number.
2.) Alter your existing number.
3.) Apply for a new number under an alternate identity.
NOTE: It is a federal crime to misrepresent your social security
number.
Creating a new file:
You must create a new file at each of the major credit bureaus.
Order a copy of your report from each bureau using the new
identifying information. If your report comes back marked NO
RECORD FOUND you have succeeded in creating a new credit file.
Follow-up Procedures to Keep Your New File Separate
1. Obtain a new driver's license with your new first name, or
maiden name, and your new address. Simply ask for a
replacement of your old license and tell them you are now
using a different first name, or last name, and new address.
If you are using your maiden name, or middle name, none of
this should seem unusual or suspicious, and they will simply
issue you a new license with the new information and your old
driver's license number.
2. Pick a new bank and open a checking and savings account under
new name and address.
3. Have paychecks made out to your new name. Once again, if you
are merely using your maiden name, or middle name, it's
nobody's business but your own, and shouldn't be an issue with
your payroll dept.
4. In order to use the credit file segregation method
successfully you must always use your new information. If you
ever use your old address or your original name your old file
may merge with your new one. TRW compiles a list of mail
servers, so you must really have a legitimate alternate
address.
REMEMBER, IN UTILIZING CREDIT FILE SEGREGATION:
- It is legal as long as there is no intent to defraud.
- Creating a new file does not relieve you of your previous debts
or responsibilities.
- The services of a competent attorney are highly recommended
before using any of these techniques.
Keep in mind that, according to the FTC:
"It is a federal crime to make any false statements on a loan or
credit application, which... (a fraudulent) credit repair company
may advise you to do. It is a federal crime to misrepresent your
social security number. It also is a federal crime to obtain an
EIN (Employer Identification Number) from the IRS under false
pretenses."
One additional hazard of incorrectly handling credit file
segregation is getting one or more CHECKPOINTs, TRANS ALERTs or
CAUTIONs entered into your credit report, resulting in worse
credit.
* HOW TO GET A MAJOR CREDIT CARD NOW!
Types of Credit Cards
There are two types of credit card accounts: Secured and
Unsecured. Secured and unsecured credit cards work the same way;
both can be used to pay for goods and services. However, a
secured card requires you to open and maintain a savings account
as security for your line of credit; an unsecured card does not.
If you need a credit card so you can rent a car, join a video
club, cash a check, make plane or hotel reservations, or any of
the other essential modern conveniences reserved for major credit
card holders, and you've been rejected for an unsecured major
credit card due to bad credit or no credit history, then getting
a secured card is definitely the way to go.
You can obtain a secured credit card from any one of many banks
offering a secured credit card account. Some accounts can be
opened with as little as $100, and no one can tell it's a secured
credit card as opposed to an unsecured card. Even your credit
report will not distinguish it as such. In some cases it can
even act like a cross between a secured and an unsecured card
because some banks offer a credit line of 150 - 200% of the
amount on deposit. Do not fall for scams that offer secured
cards with heavy "processing" fees or ask you to call "900"
numbers.
It really helps on your application if you have a checking and
savings account even if you don't have much, or anything, in
them. This is because most creditors work on a point system, and
don't delve too deeply into the details of your credit history.
They will award you points simply for having a checking and
savings account. They will also award you points if you have
your own phone number. It's fairly easy to get an unsecured
credit card, but even if 95% of the applicants are accepted, that
means 5% are not. Cover yourself every way you can on the points
system.
Credit Scoring
To illustrate how credit scoring works, consider the following
example that uses only three factors to determine whether someone
is creditworthy. (Most systems have 6 to 15 factors.)
EXAMPLE
Monthly income Points Awarded
Less than $400 0
$400 to $650 3
$651 to $800 7
$801 to $1,200 12
$1,200 + 15
Age 21-28 11
28-35 5
36-48 2
48-61 12
61 + 15
Telephone in home
Yes 12
No 0
Some credit scoring systems award fewer points to people in their
thirties and forties, because these individuals often have a
relatively high amount of debt at that stage of their lives. The
law permits creditors using properly-designed scoring systems to
award points based on age, but people who are 62 or older must
receive the maximum number of points for this factor.
If, for example, you needed a score of 25 to get credit, you
would need to make sure you had enough income at a certain age
(and, perhaps a telephone) to qualify for credit.
Remember, this example shows very generally how a credit scoring
system works. Most credit scoring systems consider more factors
than this example -- sometimes as many as 15 or 20. Usually
these factors are obviously related to your credit worthiness.
Sometimes, however, additional factors are included that may seem
unusual. For example, some systems score the age of your car.
While this may seem unrelated to creditworthiness, it is legal to
use factors like these as long as they do not illegally
discriminate on race, sex, martial status, national origin,
religion, or age.
The FTC provides the following information in its pamphlets on
secured credit cards:
"If you are interested in applying for a secured credit card, the
BankCard Holders of America (BHA) provides a list of institutions
offering secured cards. BHA's "Secured Card List" is free to BHA
members, $4.00 for non-members. Write to:
BankCard Holders of America
560 Herndon Parkway, Suite 120
Herndon, VA 22070".
Moving From Secured To Unsecured
To move on from a secured major credit card to an unsecured major
credit card, or unsecured department store and gas cards:
1. Obtain a copy of your credit reports from each of the three
major consumer credit bureaus in your area.
2. Remove negative items using the methods detailed in this
report.
3. Open a savings and checking account.
4. Obtain a secured credit card (see section above). If you are
in a rush to get a secured card you can do this step first,
but you should follow all of these steps before applying for
any unsecured cards.
5. Used the secured card to get dept. store card(s). Many credit
card issuers will not give you a card without your already
having a major credit card, but no one can tell a major card
that is secured from one that is unsecured. So your secured
credit card should enable you to qualify.
6. Make accelarated payments (pay off your accounts ahead of schedule).
7. Apply for a major unsecured card.
Additionally, some banks that issue secured cards allow you to
obtain an unsecured card after 12-18 months, if you have a good
payment record. You can then close the secured account, and withdraw
your money along with any accumulated interest.
Make certain that the bank issuing your secured card reports to at
least one of the CRAs, or it won't contribute toward your building
a credit history. Not all banks, or creditors in general, have an
arrangement with the CRAs to provide information.
*DEALING WITH YOUR CURRENT DEBT LOAD
Remember, cleaning up your credit file or even creating a whole
new one does not in any way relieve you of your legal obligation
to pay your debts. If your problem is not merely bad credit, but
actual overwhelming debt, there are a few things you can try.
Negotiate Directly With The Creditor
This can be the most effective way of eliminating current
outstanding debt. Deal directly with the creditor and arrange to
pay a percentage of the debt, in exchange for a positive credit
rating. This is especially important if a collection agency has
been called in: send the collection agency a "Cease and Desist"
letter, and then immediately contact the creditor directly.
Get the creditor to accept as full settlement a reduced final
amount, 70% is realistic, in exchange for removing the negative
item. Make sure the letter is carefully written, and signed by
the creditor and whomever among its agents you have been dealing
with before they receive your payment.
This is a good way to go if you have taken out a loan to
consolidate your debts, and you plan on closing an account after
paying it off. You can use the loan to make good on your promise
to pay off the debt at once, and still get them to lower your
total amount of debt while receiving a positive final credit
rating from them. They don't have to chase you, or use a
collection agency that will take a piece for themselves. You get
a reduction in your debt and a perfectly good credit rating.
Everybody wins.
If your debt has already gone into collection you may have to deal
directly with the collection agency. They might have actually
purchased your debt from the creditor, possibly for less than half
its original value (see, they beat you to it), and in this case
you'll have to negotiate with them. You may still be able to get
them to reduce your overall debt as they'll probably still be making
a profit.
Where to Find Low-Cost Help
If you need help in dealing with your debts, you may want to
contact a Consumer Credit Counseling Service (CCCS). This is a
non-profit organization with more than 850 offices located in 50
states. CCCS counselors will try to arrange a repayment plan
that is acceptable to you and your creditors. They will also
help you set up a realistic budget and plan future expenses.
These services are offered at little or no charge to you. You
can find the CCCS office nearest you by checking the White Pages
of your telephone directory or by calling from a touch-tone phone
1-800-388-2227 to get the telephone number. However, if you have
other questions, contact this FTC-approved organization:
National Foundation for Consumer Credit, Inc.
8611 Second Avenue, Suite 100
Silver Spring, Maryland 20910
(301) 589-5600
In addition, non-profit counseling programs are sometimes
operated by universities, military bases, credit unions, and
housing authorities. They are likely to charge little or nothing
for their assistance. Or, you can check with your local bank or
consumer protection office to see if it has a listing of
reputable, low-cost financial counseling services.
SUMMARY
We hope this report has been of value to you. It is the result of
painstaking research, and extensive real life testing with the help
of a number of people in various degrees of financial difficulty.
You can either collect the various forms and compose the letters you
need, or you can order our complete kit for only $5.00. This kit
contains not only the needed forms and letters, but also additional
materials you may find helpful.
Copyright 1996 Runes Publishing/Russell Alexander
You may copy and distribute this FREE report as long as the report is
in its entirety, including this Copyright notice and the following
order form, and distributed at no charge. Reproduction of this report
or sections of this report for the purpose of commercial sale is strictly
prohibited and will be prosecuted as a violation of the Federal Copyright
Law.
=======================================================================
Yes, I would like to order the Credit Repair Kit for only $5.00!
Enclosed is my check or money order, made out to:
Russell Alexander
c/o Runes Publishing
7 Rita Drive
Brentwood, NY 11717
_______________________________________________
My Name
_______________________________________________
My Address
________________________________________________
City, State, Zip
Please allow 1 - 3 weeks for delivery, by first class mail.
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