Amerikaner83

PRIMER on credit repair (and other info for newbies)

19 posts in this topic

This is the text of the PRIMER on Credit Repair.

admin's note: it is CRITICAL to follow the steps in this guide in the EXACT order given. No skipping on down!

Revised PRIMER on Repairing Credit

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I am writing this as a guide to how I cleaned negatives from my credit report. There was an earlier version of this thread, but I have since learned a few things about the repair process, and I decided to rewrite this guide. I also hope to correct some misconceptions about the validation process.

This entire process is designed to prepare a case to take the CA and/or OC to court. If the CA or OC goes away before you get to the point of a lawsuit, GREAT! However, that is sometimes not the case.

Let me start by telling you some history. I started in credit repair by doing what so many of you have already tried: Paying them. I discovered what you may already know: PAYING A CA IS THE WORST THING YOU CAN DO. I got a pair of paid collections for my trouble. I decided then and there to figure out how to do this. Since, I have taken on a combined total of 30 CA’s and OC’s. Cell phone companies, landlords, a couple of banks, and some CA’s. I had to sue 8 of them. I have settled out of court in every case, and to date I have received nearly $10,000 in settlements. My credit score when I started was 557, and it is now in the 760 range. You can do that, as well.

1. The first thing you must do, is you need to obtain a copy of your credit report from all 3 agencies. A 3 in 1 report doesn’t cut it. There is much more detail to be found in the individual reports. Go ahead and spend the $30 or so. It is worth it. Save copies of the reports, you will need them.

2. Next, dispute all of the negative TL’s on your report. The older ones usually will come off the easiest. I got 4-5 deletions that way. This was effective on about 20% of my accounts. This will take 30 days or so for the investigation to complete. You can dispute over the phone, because I don’t feel like suing the CRA is the best way to go. If you aren’t going to sue them, you don’t need the documentation that goes with CMRRR. Suing CRA’s and getting tough with them may work for others, but I have had better luck dealing with the CA’s and OC’s.

3. Next, after the initial investigations are complete, look at the now verified tradelines. Are there any discrepancies? Do they all agree with each other? Or does your EX report show a $100 charge off, while your EQ shows a $110? If any do not match, that is good for you. The FCRA requires that all tradelines be “complete and accurate” and how can they be accurate, if they don’t even match each other? Legal leverage, to be used later.

4. Now, you will DV all of the remaining CA’s and send dispute letters to the OC’s. You can take your time and eliminate them in manageable groups. However many you have the time and money for, whether it is 3 or 10 at a time. The way to do this is simple. You just send them a letter telling them that you dispute. That is it, no special wording or anything is needed. In fact, I am now advising you to stay away from the sample “form” letters that so many are sending- the CA’s are on to them.

Just remember that my suggestion applies to calling CRA's. It does NOT apply to calling a CA. I never call them, until I have all I need to sue and I am ready to file. Then I make an ITS call to the owner or manager. Calling a CA does little good and can cause much harm. The reason is that they will seldom delete, and can sometimes trick you into violations of your own. If they screw up on the phone, you have no proof (unless you are in a one party state-which I am not), so I keep all communication with them in writing.

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There is nothing in the law to require the CA to honor a limited C&D, so what I do is include a statement in my DV that states all calls to my home are recorded and that calls to my place of employment are prohibited. That does 3 things:

1 All but the dumbest CA's will stop calling me at work.

2- All but the dumbest CA's will stop calling my house. This has the same effect as a limited C&D.

3- The dumbest CA's call me at work and cat home. I get violations for the work calls and they say stupid things on my recorded home line. Since I am in a two party state, and I have notified them by certified mail that they are being recorded, the recordings are now admissible.

Sometimes a CA attempts to dodge DV’s by refusing to sign for them. When the letter is returned to you, save it to use as evidence later, and then resend it by FEDEX with delivery confirmation. More expensive, to be sure, but most companies will sign for FEDEX without a second thought. When the green cards come back, immediately request reinvestigation from the CRA. This does one of three things (if you are dealing with a CA):

1 They don’t validate, and they don’t reply to the CRA. Deletion. You win.

2 They don’t validate, they verify with CRA. Violation. Proceed to next step.

3 They validate accurately, either with or without verifying to the CRA. Very rare. Only happened once so far for me. They just don’t keep good enough records. You negotiate pay for delete in this case. If they won’t PFD, then let it lie. Don’t waste your money getting “settled in full” or other nonsense. It empties your bank account and trashes your credit.

There is no time limit for the CA to reply to your letter. They can simply do nothing, and are not in violation. That is why requesting reinvestigation through the CRA is important. It forces the CA to either violate by re-reporting an invalid tradeline, or allow deletion. Get more copies of at least one report that has been re-reported and save it. You will need it later. There are services which allow you to pull every day for free, sign up for one. I use Equifax.com.

Next step. You need to prove the violations are intentional to really get good leverage for a court case. So, you repeat the above steps using a repeat DV letter. Once they have verified with the CRA twice and have not validated, you have repeat violations. This is enough to get them for willful noncompliance.

Now you need to tally the violations. The more violations, the stronger your case. Don’t go running off to the courthouse with 2 or 3 violations. It is important to look like a victim here. You are looking for violations of FDCPA, the FCRA, and state law. I used the Florida version of the FDCPA. This was especially useful, because while the FDCPA allows $1000 in damages for each LAWSUIT, not each violation. The Florida Consumer Collection Practices Act allows another $1,000 and whatever punitive damages allowed by the court. Look into your state’s laws for details. The FCRA allows punitive damages, as well.

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Once you count the violations, send them a fax telling them you are suing them and give statute numbers. This may shake out a few more deletions. Maybe another 5-10%. By the time you get to this point, it should have taken you at about 4 months, and should have gotten rid of about 70% of your negatives.

Time to file suit on the rest. Most of the settlements I got in court just about covered my expenses. I could have pushed it and asked for more, or gone to court and tried for more, but my goal was clear credit, not making money. Besides, any lawyer will tell you court is a crap shoot.

If you can get a deletion, take it. Don't get greedy.

I hope this helps all out there in CIC-land!

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::allhail::All hail Amerikaner (for having the foresight and wherewithall to copy and paste!!! :twothumbsup: for a great job. :everybodyclap::everybodyclap::everybodyclap:. I am on ::cloud9:: that I can once again reference back to divemedic's info, without which I was :<img src=:'> and ::drowning::. Amerikaner if you didn't have a DF I think I might want to buy you a few xapplex::martini::::martini::::martini::, take you back to my place :Domina:and ::heartpumping::::heartpumping:: :bedjump: !!

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Here are some more pieces of info for everyone to remember and consider:

SOL / Reporting Period

Many people get SOL confused with reporting period. SOL is the amount of time a CA or OC has to (successfully) SUE YOU over a debt. It is what's known as an "affirmative defense" to a lawsuit. That means that you still CAN be sued after the SOL has run. It's not an automatic "you've filed too late" by the judge. the Plaintiff does not have to prove they've sued timely, YOU have to raise SOL as a defense, and prove that they have sued after the SOL has passed.

SOL Has ABSOLUTELY NOTHING to do with how long a debt is listed on your credit report. SOL is governed by the laws of YOUR STATE, and differs from state to state. Do not rely on this site to give you an accurate depiction of your state’s SOL. Go to the source: Your state statutes

The 7 years that everyone refers to here is the "reporting period", defined in the FCRA. That means that negative items can not stay on a report longer than 7 years from the date it was charged off, or 7.5 yrs from the DOFD (Date of First Delinquency).

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FAKO / FICO

There are two basic types of credit scores: FICO Scores and everything else (FAKO Scores). If it’s a credit score you get from TrueCredit, Chase Identity Protection, freecreditreport.com, or any site other than www.myfico.com or www.equifax.com, it’s a FAKO Score. It uses a different algorithm to score, as FICO algorithms are secret and proprietary. If a FAKO score varies and there’s no discernible change in your report, don’t worry. FAKO scores vary with the tides, the phases of the moon, and the amount of butterflies that fart in Africa at one time. :p

For the record, there are different types of FICO scores: auto-enhanced, mortgage-enhanced, and others (like the ones you or I get from www.myfico.com ). There are many more out there, each one subtly tweaked for the type of creditor pulling your report. But realistically, we just focus on the generic FICO scores that we as consumers can purchase from www.myfico.com .

To add to some more confusion, apparently there are other places to get a FICO score:

With a WAMU CC, you get a free TU Bankcard FICO score. It updates once a month, it's a real FICO score, and it's free with the CC. The WAMU CC ain't too shabby either.

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Same account, two different TL’s

It is legal for a CA to have a “date opened” on an account that differs from the OC’s “Date Opened”…if and only if the two account numbers are different. How is this so? Because the account was “opened” with the CA when they bought (or were assigned) the account. Technically this is legal, and is NOT re-aging. If the account numbers are the same on both the OC’s and CA’s tradelines, then you may have a re-aging attempt.

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Re-aging / DOFD

If left alone, bad marks on your credit report will disappear at or very near the 7 year mark from the Date of First Delinquency – DOFD . DOFD is usually not listed on your credit report, but Equifax sometimes reports it. But the CRAs have it on file. Legally, once the 7 years passes (7 years from date of charge off), based on DOFD, it should be removed from your file. Around the 6 or 7 year mark is a good time to dispute a listing as “obsolete”, as it may result in an early fall-off. With EX and TU, you can estimate the DOFD by subtracting 7 years from the “this item will remain on file until” field.

Re-aging is an attempt to change the DOFD in order to make a bad debt appear on your credit report longer than it legally should. Some CA/JDB’s (like Arrow, MCM, and NCO) seem to try this relatively often. Beware. Re-aging is a blatant violation of the FCRA.

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Use the SEARCH feature!!

Please, use the search feature. Sure, it’s not as perfect as Google’s, but there is a HUGE chance that your question has already been asked recently. Especially if you’re a newbie. If you do use the search feature and don’t find what you’re looking for – here are some tricks to try:

  • Try and be a little more vague. For example, If you type “Arrow Financial taking me to court”, you may not get any results. But type in “Arrow” or “arrow financial” and you’ll get many more results.
  • Think of how you can re-word your search. Instead of searching for “agreement” – which will yield you all the threads with the word agreement in it… try “settlement letter” or the like. Try and think of other ways people might word what you’re looking for.
  • If you’re really vague, or search for a common term, you will likely get many threads in your result. Remember that the search results show the thread title…explore a little! Click and read thru the threads…many times a thread will wander a little bit, and encompass a new (but related) topic. You may find your answer there.

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Sample Letters

Please, refrain from simply copying and pasting when you find a sample letter that you like. Please use your imagination and creativity to customize it. The Sample letters that are linked at the top of the site have been around forever, and realistically, the CA’s are onto them. There are two things that scream “uninformed consumer” to a CA: Someone who just pays them, and a verbatim cut-and-paste job of a sample letter from the Internet.

Sending a letter in which one does not know exactly what is being said is a dangerous thing.

Due to the above – there are other letters people post in the threads that ask for comment or critique. Please, if you are planning on using one of those as a template, kindly ask the person who originally posted it for permission. It’s just good etiquette. Do customize these to fit your situation as well.

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Is This Validation?

Many people think that to have a validated debt, you need to have the CA send you a million different pieces of paper proving this that and the other thing. That’s not the case. Here’s what the FDCPA says regarding validation of debts:

§ 809. Validation of debts [15 USC 1692g]

(a) Within five days after the initial communication with a consumer in

connection with the collection of any debt, a debt collector shall, unless the

following information is contained in the initial communication or the consumer

has paid the debt, send the consumer a written notice containing --

(1) the amount of the debt;

(2) the name of the creditor to whom the debt is owed;

(3) a statement that unless the consumer, within thirty days after receipt of the

notice, disputes the validity of the debt, or any portion thereof, the debt will

be assumed to be valid by the debt collector;

(4) a statement that if the consumer notifies the debt collector in writing

within the thirty-day period that the debt, or any portion thereof, is disputed,

the debt collector will obtain verification of the debt or a copy of a judgment

against the consumer and a copy of such verification or judgment will be

mailed to the consumer by the debt collector; and

(5) a statement that, upon the consumer’s written request within the thirty-day

period, the debt collector will provide the consumer with the name and

address of the original creditor, if different from the current creditor.

(B) If the consumer notifies the debt collector in writing within the thirty-day

period described in subsection (a) that the debt, or any portion thereof, is disputed,

or that the consumer requests the name and address of the original creditor, the

debt collector shall cease collection of the debt, or any disputed portion thereof,

until the debt collector obtains verification of the debt or any copy of a judgment,

or the name and address of the original creditor, and a copy of such verification or

judgment, or name and address of the original creditor, is mailed to the consumer

by the debt collector.

© The failure of a consumer to dispute the validity of a debt under this section

may not be construed by any court as an admission of liability by the consumer.

Notice the FDCPA says “obtain verification”. This is the infamous gray area. A CA / JDB will tell you all they have to give you is the name and address of the original creditor. You on the other hand, want a million different things. This can work to your advantage. Since “verification of the debt” is not concretely defined by the FDCPA, one could argue that ANYTHING a CA / JDB sends is not sufficient verification. However, it’s doubtful a judge will buy it. I take this approach, personally: If I was a neutral third party and saw the documentation sent to the consumer, would I reasonably believe the debt is verified and valid? Sometimes the answer is yes. Most of the time the answer is no.

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Know your State laws!

Take the time and read through the laws and statutes of your state. Look through the “limitation of actions” area – that’s the SOL. Look for any sort of “consumer protection” type statutes. Look for rules for collection agencies. Look for special tidbits of information such as “max allowed interest” and things like that. I am currently going through the process of possible litigation on a CA because of their failure to abide by my state’s laws, and I’m calling them on it...and they’re based in my State!

CA’s / JDB’s many times will NOT know each and every provision of each and every state law that they have to comply with. Or they do and decide to break the law anyhow. They bank on the fact that there are not very many consumers out there who are aware of those provisions, and many a time they get away with it. Don’t be one of those consumers.

Many times, your state statutes will spell out penalties for violating them…for example – violations of the Washington State Consumer Protection Act will cost a CA / JDB a maximum of $2,000.00 for each violation, + actual damages. That’s a lot better than the FDCPA ($1,000 per action) / FCRA (max $1,000 per violation + actual damages).

It will behoove you to spend a day or two (or more) poring thru the statutes of your state. Had I not, I would not be able to collect a max of $12K for state law violations in my current litigious affair.

Which is better – the possibility of getting a maximum of $1K, or the possibility of a maximum of $13K? I thought so.

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I'd like to just add to that "search" tip. If you try the "advance" option under the search button you can limit your search to particular forums. This might help to eliminate threads which you might not have to go through if what you were searching specifically had to do with "Obtaining Credit Cards" for example. You'd be amazed how many times I got tons of the "off topic" threads when I really wasn't searching for those. :lol:

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** 623 letters explained **

There have been many questions about “623 letters” – what are they, how do they work, who do they work for, and why use them?

623 letters are named after FCRA Section 623 (the section referred to in the “dispute with original creditors” process linked at the top of every page here at CIC). Click on that link above and the whole process is explained. It’s a great tool to use when an OC is not reporting correct or accurate information on your CRs and you want them to report accurately.

Does a 623 letter work with a CA? YES. A 623 letter can be easily modified for a CA, JDB, or anyone else who is reporting a TL on your CRs. It’s not just for original creditors. But the process is the same. You have to dispute with the CRAs FIRST! This step is crucial! Dispute with the CRAs. If it comes back “verified”, but inaccuracies still remain, a 623 letter can be your next step.

Do you need to copy and paste the “sample” 623 letter used on that “dispute with OC” page? No. Please do not do that. Like I said in an earlier post in this very thread, there are two things that scream “uninformed consumer” – and a copy and paste job from the Internet is one of those things. All a 623 letter needs to convey is the fact that you are disputing their TL pursuant to Section 623 of the FCRA. That’s it. You don’t need to have 2 pages of quoting the law or long winded legal mumbo jumbo or anything like that.

This is the meat of any § 623 letter I send out, and even then it’s a bit lengthy (but that’s a part of my style):

I am writing this letter pursuant to Section 623 of the Fair Credit Reporting Act. As a furnisher of information to the credit bureaus, you have to report accurately. I have the ability to dispute with you pursuant to FCRA §623, and I am doing so. I’m sure you know you have 30 days to respond or delete the item from my report. In case you are wondering, here are the applicable sections:

§ 623. (a)(8) ABILITY OF CONSUMER TO DISPUTE INFORMATION DIRECTLY WITH FURNISHER

§ 623. (B) DUTIES OF FURNISHERS OF INFORMATION UPON NOTICE OF DISPUTE

I may seek legal action under FCRA §623 (B) if you do not comply and respond to me with the results of the investigation in 30 days.

It’s not an exact quote from my letters, but you get the idea. You can tailor the wording to fit your own unique “style”, something you should be doing anyway.

It has been said more than once but bears repeating: you should dispute with the CRAs FIRST! Before sending out any 623 letters or anything else! DISPUTE WITH THE CRAs! Got it? GOOD – there will be a quiz at the end.

Why dispute with the CRAs first? It is an FCRA violation that is actionable by the consumer if the DF (data furnisher) does not respond within 30 days of receiving the dispute request. IOW – if they take more than 30 days to respond to your dispute, it’s an FCRA violation and you can sue. But that only applies if the consumer disputed with the CRAs first. If you didn’t, then you’re SOL (and I’m not referring to Statute of Limitations). Do you see why it’s so important to dispute with the CRAs first? I sure hope so.

Why use them? I have found that they work for me in place of an untimely DV letter. As we know, with an untimely DV letter, all anyone has to do is mark the TL “disputed”. That’s it. With the § 623 letter however, not only do they have to get back to you, but also have to do it within 30 days. Additionally, if you sent someone a letter and they have not responded at all yet, sending them a § 623 letter forces them to respond (or delete!).

I have found that one §623 letter alone may not be enough to get them to correct their information as it appears on your CR. If it’s been longer than 40 days or so (30 for investigating, 10 for USPS, I’m very generous), then there is an FCRA violation (provided you can prove your timeline – sending your letters CMRRR proves your timeline). I usually send out a 2nd letter, a “15 day” letter. Basically, a “Hey dingbat, you and I both know you only get 30 days. It’s been longer than that, and I can sue you now if I chose to. But in a gesture of goodwill I will give you 15 days to delete this account as it appears on my CRs since you didn’t abide by the FCRA” type letter. They can correct it all they want now…but the damage on their end is done – they didn’t get back to me in time.

I do a bit of threatening, outlining the statute they violated, and advise them to expect my BBB and State AG complaints soon if this matter is not rectified by the TL’s deletion off my CRs within the 15 day time period. It’s at that point that I usually get the deletion letter.

For me, it’s never gotten past one follow-up. A well written (and executed) follow up letter can be all it takes to get them to delete. If they don’t…then you can take whatever “next step” you choose – ITS, additional complaints, draft suit, whatever. But since this is about the 623 letters, that’s what I’m focusing on in this post.

Finally – The § 623 letters only work if there is inaccurate information being placed on your CRs. If everything about a TL is completely accurate, then the 623 letter may not be the miracle letter you think it is.

**Credit goes to Admin (for the link referenced above, and of course all things CIC) and Lovebug5 (for the *very* short version of this post in another thread)

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