View Your Credit Score
Do you have collections on your report? Did you know these items are bringing down your FICO score? This information is viewed as your payment history, this roughly accounts for 40% of your overall score. By removing these negative entries and paying your current bills on time you can start to build a trail of positive payment history.
How to Remove Items
The Fair Credit Reporting Act (FCRA) a piece of legislation says that you can dispute any item you feel is inaccurate on your report. The bureaus are then required to investigate the item in which they will contact the lender and ask them to verify the account, the dates, and the balance.
Often the lender will not verify the account and an investigation will result in the removal of an item. Frequently lenders are not willing to verify an account because either they have sold it or are unwilling to spend the time and money to keep the information or locate it.
For example, if you have an unsecured card and stop making your monthly payments eventually the card issuer is going to sell your debt to an agency. They will also ‘charge off’ your card, in other words they can write it off for tax purposes. Now, after this has happened if they are contacted by a bureau to verify the account they are very unlikely too.
They have gotten everything they can from your account and now that they have sold the debt they have no legal right to collect it. Thus, to verify the item they would only be spending money and resources to keep that information and then to access it.
Why Do I Hear This Is Hard?
The reason you hear about the difficulty is because of our politicians. The FCRA has been weakened over time from what we suspect to be big business interest influencing our law makers. Now, before the bureau will investigate the mark they must deem your dispute valid.
We are highly suspicious of law makers when they enabled the bureaus to do this because they have a horrendous track record for complying with the FCRA and have been fined time and time again by the FTC. The most publicized instance was in the early 2000′s when all the bureaus were forced to open phone lines for consumers to file their disputes.
Sounds great right? Yea and that is about as great as it was how it sounded. In practice the bureaus neglected to have employees answering these phones. Why? Doesn’t the bureau want to have accurate information in my file?
Unfortunately the bureau doesn’t care if the information they have about you is accurate or not. This is because there is no financial motive; the bureaus do not earn money from correcting reports. In fact they lose money and money that otherwise would be profit. Their only motive to even respond to a dispute is to comply with Federal Law and avoid more fines from the FTC.