CREDIT

There are no quick fixes for improving your credit score. But you can raise your score over time by demonstrating that you consistently manage your finances responsibly. Any of the following ten tips can help you to improve your credit score:
1. Pay your bills on time.

This is the best way to improve your score, and it's never too late to start. Even if you've had serious delinquencies in the past, those will count less over time if you keep paying your bills on time.
2. Keep credit card balances low.

High outstanding debt can pull down your score. Don't go maxing out your credit cards all the time.
3. Check your credit report for accuracy.

It's possible that there may be inaccurate information on your credit report that can be easily cleared up (see How To Fix Credit Report Inaccuracies). If this proves to be the case, then you should contact one of the three credit reporting agencies-TransUnion, Experian or Equifax.
4. Pay off debt rather than moving it around.

Consolidating your credit card debt onto one card or spreading it over multiple cards will not improve your score in the long run. The most effective way to improve your score is by simply paying down the amount you owe.
5. Keep your credit cards - but manage them responsibly.

In general, having credit cards and installment loans that you pay on time will raise your score. Someone who has no credit cards tends to have a lower score than someone who has managed credit cards responsibly.
6. Don't open multiple accounts too quickly, especially if you have a short credit history.

Opening too many accounts in too short of a time period can look risky because you are taking on a lot of possible debt. New accounts will also lower the average age of your existing accounts, something that your FICO score also considers.
7. Don't open new credit card accounts you don't need.

This approach could backfire and actually lower your score.
8. Don't close an account to remove it from your record.

It's a myth that closing an account removes it from your credit report. This is untrue-even closed accounts remain on your report, possibly for an indefinite period of time and may still be factored into the score. In fact, closing accounts can sometimes hurt your score unless you also pay down your debt at the same time.
9. Shop for a loan within a short, focused period of time.

FICO scores distinguish between a search for a single loan and a search for many new credit lines, based in part on the length of time over which recent requests for credit occur. If you shop for a number of loans over too long a time period, it can count against you.
10. Contact your creditors or see a legitimate credit counselor if you're having financial difficulties.

This won't improve your score immediately, but the sooner you begin managing your credit well and making timely payments, the sooner your score will get better.
Steps to Improve Your Overall Credit

If you have a history of poor credit or think that you might, it's important that you find out and take the steps to improve it. It will take time, but with discipline, you may expect to see improvement in as little as six months. You see, creditors are interested in a track record. You'll have to prove that you consistently pay your creditors on time and that you can effectively pay down your debt. Here's the simple plan to improve your credit:
Know what's on your credit report and resolve any discrepancies.

Even if you believe you have a good credit score, it is still wise to check with credit reporting agencies to make sure they contain a similar view of your credit history. It's also wise to make sure there are no errors on your report, such as name misspellings or incorrect addresses.
Plan to pay your bills on time and follow through.

You can start this today, even before you take a look at your credit report. Contact your creditors to review your payment options and catch up with any late payments. Focus on ways to reduce your spending.
Stop using credit cards now.

Paying down your credit card balances will not only improve your credit rating over time, but you'll be in a better position to negotiate a lower interest rate for your cards.
Don't live beyond your means.

Make paying your bills and buying only essential items your main priority. Carefully weigh the importance of all new purchases against the greater importance of reestablishing your good credit.

Getting a handle on your spending, paying bills on time, and paying down credit cards takes a long-term commitment and strong self-control. It won't always be easy, but the effort will pay off once you see your credit improve.

I am hopeing to gain a knowledge reward but i am sure i have along way to go before that happens. Anyway i wanted to add something.It is a fact that if you actually pay off a debt that is on your credit report, the bureau's will report that it is paid in full, but it actually lowers your credit score if you pay it off. It is best to always pay on time, never be late on anything. Cindy.

That is a very true point Cindy. Also even after you pay CC off. Try to purchase at least one thing on them every month and ay it off during same month it will keep your account currently active and help your score to rise by them posting on time payments and payments in full every month.

Debt comes in many forms, and most types help us in our daily lives -- when used responsibly. Most people cannot buy a home without some financial help, and many cannot buy a car (especially a new one) without some sort of financing. The money borrowed to purchase large-ticket items is called installment debt: The debtor pays a portion of the total at regular intervals over a specified period of time. At the end of that time period, the loan with interest is paid off.

Installment debt allows you to purchase items at a competitive interest rate: for example, 5% to 7% for a 30-year home mortgage and 8% or 9% for a car loan. The loan is paid back on an amortizing schedule, monthly payments of a fixed amount that remain constant over the life of the loan. At first, most of the monthly payment consists of interest. In later years, principal begins to be paid down.

Installment debt is easily budgeted and the debt is eliminated on a predetermined date. Even for those who may actually have the cash to purchase the desired item, installment debt can make financial sense if you can earn a higher return (after taxes) on your investment of cash than you must pay on your installment debt.
________________________________________________________

A revolving line of credit, also called "open-ended credit," is made available to you for use at any time. Examples of revolving credit are credit cards such as Visa, Mastercard, and department store cards. When you apply for one of these cards, you receive a credit limit based on your credit payment history and income. When you use the credit line, you must make monthly minimum payments based on the total balance outstanding that month. Some lines of credit will also have an annual account fee.

While revolving credit is a convenient way to borrow, it can also become an endless pit of minimum payments that barely cover the interest due. Many cards charge annual rates of interest of 18% or higher. As you pay off your debt, the minimum payment is also reduced, thus extending your payoff period and, consequently, the interest you pay. Paying just the minimum due on a $2,000 credit card loan could mean making monthly interest payments for 10 or more years!

Revolving credit, in addition to being convenient, eliminates the need to carry a lot of cash and can help establish you as a credit worthy risk for future loans. The itemized monthly statements also can help you track your expenses. But some people can easily yield to the temptation that the convenience of credit cards offers. Impulse buying, failing to compare costs, and purchasing large items you can't afford are all downfalls brought on by always available purchasing power. Spending more than you earn in any given period is a dangerous practice at best, but doing it over an extended period of time can be financial suicide.

I found this site a few weeks ago and I actually used some of thier stuff with good effects. Here is the link, hope it helps:

http://www.creditinfocenter.com/forms/

____________________________________________-
HERE IS A SAMPLE
____________________________________________

Your Name
123 Your Street Address
Your City, ST 01234

Don't forget to provide proof if you have it!

Keep a copy for your files and send the letter registered mail.

Just wanted to make other people aware of some legitimate credit repair companies/lawyers that you can certainly trust. One is www.badcreditisgone.com and also www.creditaccomplished.com. I refer alot of my friends to them and they are very satisfied. Now i would like to invite anyone using deans site to use one of these. People have actually started out at a score of 490 and in 6 months they are at 750 plus. These companies are alittle expensive though, but if you can't do it on your own, don't have time or for whatever reason then i strongly suggest using one of these companies. The one that i strongly recomend is www.creditaccomplished.com is because they will actually put you in a house in 7 months using their credit repair system. Thanks Cindy.

Here are some conversations we have had on improving credit.

http://www.deangraziosi.com/node/2966

D

I wanted to put everything regarding credit here so it can be easily foud.

If you are being harassed by lowly debt collectors, there are ways to stop them cold! You have legal rights and you do not have to endure any type of degrading treatment from these leeches of society. It's not bad enough to them that you are obviously experiencing some financial difficulties; they need to accentuate the problem - it's just in their bloodlines. Check out the following tips to stop debt collector harassment quickly.

Under the Fair Debt Collection Practices Act (FDCPA), debt collectors have their boundaries explained to them. You can use these guidelines to understand what they are allowed to do and what they are not. You should also download a free copy of your credit rights from the Federal Trade Commission's website. Alternatively, you can call 617-542-9595 (National Consumer Law Center) and request a copy of "What You Should Know about Debt Collection".

After you educate yourself about the debt collection realm, you can start ridding your life of any debt collector that has been bothering you. The first thing to do is to record your conversations. Tell the collector that you need a minute to get your recorder turned on. Flick the switch into the microphone of your telephone so that they can hear it. This alone will put you on a whole new level of conversation. Suddenly, they won't feel so brave with their disrespect and lacking professionalism. A tape recorder will definitely put any debt collector in check.

Keep excellent records of your phone conversations with debt collectors. Ask for their names. Write down the times of the calls. Write down the dates. If you are not recording the conversation, take accurate notes of what is said.

If you enter into any payment agreement with a debt collector, tell him that you will be happy to stick to it as soon as you receive it in writing - no other way. If you fail to get your deal in writing, you really have no deal at all. Avoid talking to them on the phone.

Send a letter to the collection agency outlining your understanding of the deal that has been made with the debt collector. Send it to them certified with a reception receipt requested. Show them that you are paying attention and demand professional courtesy and respect. Make sure to keep the copies and receipts in your records.

Add the following if you pay by check: "Cashing this check constitutes payment in full." Write this right on the check itself.

Request that the negative item be removed from your credit report. At a minimum, ensure that the item will be marked as "Paid in full" and not left as unpaid. Again, get everything in writing.

Never let yourself be bullied or rushed. Debt collectors will pressure you greatly to act immediately to remit payment. Tell them no - not until you have everything that has been agreed to in writing. Again, avoid talking to them on the phone altogether. The best way to communicate with them is in writing.

You can stop debt collectors from harassing you and make them show proper respect and professionalism!

Payment punctuality counts for about 35% of your overall credit score. Late payments stay on your credit report for 7 years from the date of the initial missed payment.

The most common way to get late payments deleted is to call the creditor and tell them there was trouble with your mail delivery. Some creditors will forgive one late pay, no matter what the reason, just as a matter of good business. Mortgage late-pays are a bit more difficult to deal with, probably because banks want to make it harder for consumers to refinance with another lender.

If you are still behind on your payments, contact the creditor directly and let them know that you're ready to make amends. Try to be very nice and polite with them on the phone. If you haven't been late very much, they might remove the late payment from your credit report and you may not have to pay the late payment fee.

If you are unable to pay even the minimum amount on all of your accounts, you will need to look for ways to cut back in other areas of your spending.

If you are unable to get the creditor to remove the late payment history from your reports, there are a few other ways to do it. One of the best ways is to dispute them with the credit bureaus.

After you've cleaned up your credit report, the key to rebuilding credit is to get positive information into your record. Acquiring new positive accounts is just as important as deleting negative information. Here are some suggestions:

If your credit report is missing accounts you pay on time, send the credit bureaus a recent account statement and copies of canceled checks showing your payment history. Ask that these be added to your report. The credit bureau doesn't have to add this information, but often will.

Use credit to rebuild credit! The one type of positive information creditors like to see in credit reports is credit payment history. If you have a credit card, use it every month. Make small purchases and pay them off to avoid interest charges.

If you don't have a credit card, apply for one. If your application is rejected, try to find a cosigner or apply for a secured card -- where you deposit some money into a savings account and then get a credit card with a line of credit close to the amount you deposited.

Word of caution: It won't do you any good in the long run to apply for credit before you're back on your feet financially. You'll just end up with high-cost credit that will put you back in the hole again. Even if you can get a card earlier, wait until you are ready to start using credit again.

Very concrete, solid advice, Anita. Thank you.

One thing I always tell people that are trying to improve there credit is, of coursem, make all their payments on time, try to get a credit card that has a good rewards program and just use it to put gas in there vehicle, don't let the balance go over 50% of the limit, and have at least a good 6 month history of payments. Everything mentioned above is really good advice, but I want to let you know that even if you have a revolving credit account that you don't use anymore don't close that account. The more open credit you have helps improve your credit score.

closing an old CC or HELOC will actually hurt your credit..

D

I had a loan officer tell me that I had too many open accounts. I should start closing the ones I don't use and that would help my credit score. That was a couple of years ago and I just hadn't got around to doing it. Boy, I'm glad I didn't. Thanks for the info, everyone.

If you are paying off credit cards to raise you score you may want to do some calculations first. Unless you have all the money to pay them off, think percentages. I had a lender tell me that if I dropped my credit cards down to at least 40 % of my limit it may increase my score by 30 points per card. So lets say that you have one credit card with a max limit of $2000 (with maybe a $1600 balance), and one with $5000 limit and $2000 balance. Make sure to pay the minimum on either, but if you pay extra on the smaller limit and get it down to 40%/$800 then you may be able to raise your score a significant amount, maybe not 30, but it should help. So find the money to put down $800 on the smaller card to get it down to 40%. Also, if you want to use credit cards to make purchases, try and keep them below 40%. 50% is good, but 40 is better. Also, read the book "Debt Cures" by Kevin Trudeau. It is a very good book with a huge number of things you can do. We have two of them and are using the techniques. Good luck and keep up the great work everyone!

So JD...are you going to tell us those 2 secret words he speaks of on the infomercial????

If its the two little words that I'm thinking of it's "Identity Theft." The book is very good, and it has a lot of very good information. Some of the techniques that he talks about only works in certain situations like identity theft. For example, lets say that you have a credit card that you've been paying on for quite sometime. Now you should all know that anytime you have a loan, or credit card that you are paying monthly on you are paying a huge amount of interest. So lets imagine that you purchased something several years ago on a credit card. It doesn't matter the amount but you've been paying on it just enought that it has a balance on it. You may be able to call the credit card company and ask them if they would drop the amount to the original purchase price if you pay it off. They may be able to do that, may not, but it has happened with some people. I think that someone also mentioned it above but you may be able to write the company and tell them that you have no income and are unable to make payments. You'll want to speak with an accountant so that he/she can send them a certified letter. These are just a few simple things that he talks about in the book. There are a lot of good ways that he mentions so I suggest that if you are interested you spend a few dollars and get the book. Just like Deans book, the techniques only work if you put them into action, not just sit there and wait for them to happen. Good luck everyone and keep up the great work!

What Does Your Score Mean?

This rating system is meant to develop a snapshot of the risk you currently represent to a lender. Several parameters are in your credit file, including length of credit history, number of open accounts, loans, mortgages, public records, and others are formulated to produce a three-digit score between about 300 and 950. There are other scores used by lenders and insurance companies (some of which are developed by FICO) such as Application and Behavior scores. These other scores take other information into account. Usually a lender will use a combination of your credit score with other factors when determining your risk. They all have the same objective, to determine the borrower's potential risk. Regardless of whether the score was generated by FICO or a system based on FICO parameters, they all yield an industry standard three-digit score. This score places the borrower in one of three main categories (we named the third one ourselves.)

Prime, sub-prime, and shafted

Prime If your credit score is above 680, you are considered a "prime borrower" and will have no problem getting a good interest rate on your home loan, car loan, or credit card.

Sub-Prime If your credit score is below 680, you are "sub prime", and will likely pay a much higher interest rate on your loan.

Shafted Below 560 is the shafted score. At least that is how most lenders and credit issuers perceive it. You can still get a credit card but you will likely be hit with a security deposit or high acquisition fee. In addition to that your interest rate will likely be 22 to 23%. You can forget about most home loans and the majority of new car loans at this score. Below 560 is no place to be. You will pay much, much more in higher interest and unnecessary fees. You may even pay more for your insurance rates. A very low score can even prevent you from getting a job with many companies.

How are credit scores calculated?

The methods of calculating your FICO may differ slightly depending on the credit bureau. When obtaining your score from one of the Credit Bureaus it is important to understand that your score does not come directly from FICO. It is adapted to each bureau and is given its own name: Equifax uses "Beacon", Trans Union uses "Empirica", and Experian uses "Experian/Fair Isaac." These scores are also referred to as your "Bureau Scores."

Since your score is derived from your bureau data, it will change every time your reports change. However your score is calculated, it will always take into consideration many categories of information. No one piece of information or factor determines your score. As the information in your credit report changes, the importance of one or several factors may change in your FICO score. Lenders look at many things when making a credit decision, including your income and the kind of credit you are applying for. However, your FICO score does not reflect these facts as it only evaluates the information retained by the credit reporting agency.

What factors affect your credit score?

There are five factors which are used in credit scoring calculations that determine your overall credit score.

Previous Credit Performance (Payment History) 35% A lender wants to know what your payment history is like. Have you paid everything on time, are you late on anything now, and so on. Your payment history is just one piece of information used in calculating your score, although it can be the very important.

Current Level of Indebtedness (Amount Owed) 30% How much is too much? Can the borrower pay me and still afford to pay his other bills? Not necessarily. Having available credit can actually help your ratio of debt to available credit. These are the types of questions that most borrowers want to know and the answers are almost as important as your previous credit history.

Amount of Time Credit Has Been In Use (Length of Credit) 15% Generally speaking, the longer the credit history the better your score. However, this factor only makes up 15% of your total score so even young people, students or others with short histories can still score high overall as long as the other factors show good. If you are new to credit than there is little you can do to improve this part of your score. Open an account and be patient.

Pursuit of New Credit (10%) Credit is much more popular today. Just look at the number of credit card offers you get via the Internet and in the mail. Consumers can now shop for credit and find the best terms to meet their needs. Each time someone runs a credit check on you, it creates an inquiry.

Fair Isaac has changed some of its calculations to account for these new trends. Specifically, they treat a group of inquiries - which probably represents a search for the best rate on a single loan - as though it was a single inquiry (note: this only applies to auto or mortgage loan inquiries.) For example, auto loan inquires that are within 14 days of each other only count as one inquiry.

Types of Credit Experience (10%) A healthy mix of different types of credit, installment loans, retail accounts, credit cards, and mortgage. This score is not normally a key factor in determining your score but it can help a close score. Its not a good idea to try and open different types of accounts just to try and make this factor better. It will likely reduce your score in other areas. You should never open accounts you don't intend to use anyway.

What type of accounts you have, and how many, can make a big difference. The optimal ratio of installment versus revolving accounts depends on your profile and differs from person to person. One factor that seems to have significant influence is your percent of open installment loans. Too many can lower this portion of your report.

When I wanted to establish credit for the first time someone told me to get $100 and establish a savings account. Then wait a week and go back to the bank an take out a loan for $100 based on my savings account. Then take the $100 and go to another bank and do the same, and to a third bank. You e3nd up with your original $100 with which you make sure you pay the payments on all three loans on time and a little faster then each month. Then youcan point to 3 banks loans with on time payments.
Jrgnsn

The following is a list I got from www.myfico.com. It lists the length of time that misc. things stay on your report.

Delinquencies (30 – 180 days): Can remain seven years from the date of the initial missed payment.

Collection accounts: Remain seven years from the date of the initial missed payment that led to the collection (the original delinquency date). When a collection account is paid in full, it will be marked "paid collection" on the credit report.

Charged-off accounts: Remain seven years from the date of the initial missed payment that led to the charge off (the original delinquency date), even if payments are later made on the charged-off account.

Closed accounts: Closed accounts are accounts that are no longer available for further use. Closed accounts may or may not have a zero balance. Closed accounts with delinquencies remain seven years from the date they are reported closed, whether closed by the creditor or by the consumer. Positive closed accounts remain 10 years.

Lost credit card: If there are no delinquencies, credit cards that are reported lost will continue to be listed for two years from the date the card is reported lost. Delinquent payments that occurred before the card was lost are reported for seven years.

Bankruptcy: Chapters 7, 11, and 12 remain for 10 years from the filing date. Chapter 13 remains seven years from the filing date. Accounts included in bankruptcy will remain seven years from the date they were reported as included in the bankruptcy.

Child support judgments: Remain seven years from the date the judgment is filed.

Civil and small claim judgments: Remain seven years from the date the judgment is filed.

City, county, state, and federal tax liens: Unpaid tax liens remain 15 years from the filing date. Paid tax liens remain seven years from the paid date of the lien.

Inquiries: Most inquiries listed on your credit report will remain for two years.

Positive open credit information remains indefinitely and paid positive accounts remain 10 years.

question on delinquencies. If you are late by, say a week, on a credit card payment, does that count against you? That might sound like a stupid question, but I've just been wondering.

I won't claim to know all, but here's what I do know.

Most will have some form of a grace period. So you may be ok if it's within that (usually ~ 15-20 day) grace period. Check with your CC company for details.

Also, if you have been in good standing with them and been a customer for any length of time you may be able to call and ask them to forgive it this one time. This is not as likely to work if you have just opened the acct or are in bad standing. Also, my personal experience is that if you call ahead of time letting them know you're going to have a probelm making a certain payment on time they are more willing to work with you than if you call after it's already late. In any case, to state the obvious, you don't want to make a habit of it. They frown on that and your credit score will be effected.

Check out the website I posted. My understading of it is that it's the official webiste of the Fair Isaac Corp - the company that issues the true credit scores that lenders go by.

Hopefully it won't be a problem. My credit score has been in the high 700s-low800s for awhile, but with the activity on it recently I'm sure it's gone down. And I just got a card from a local home-improvement store about 2 months ago, and somehow missed the payment for this month. I don't know how I did that, too busy I guess. Anyway, I asked if they could take it off and they said, sorry, no. I think that will be the only ding in my credit score, but it's very annoying. I have to be more careful.

Thank you for the help.

Rina

Rina,

Although the missed payment will stay on your report for 7 years the lenders for the most part look at the past 2 years for a good idea of your pymt history, so it may not be as bleak as it seems.

I understand the annoying part. I had a back and forth w/ my bank in the summer of '06. I was self employed and was having a low income summer. I asked for some help in making some kind of arrangement so my credit wouldn't be hurt. I only needed a little bit more help than they were willing to give (skipping a car payment and adding it to the end of the loan). They had a program where they would do that for 1 month but not for 2. While I understand that they didn't want to set a new precedent, and I was obligated to make that payment it's very annoying to have 1 late payment in an otherwise flawless payment history (I made the pymnt 1 week late). The good news is that in August that will more or less go away because it will be past the 2 yr mark. Now I just need to get the CC debt utilization % down and I'll be good.

Look at me goin' and gettin' all personal. Hope that helps.

Thanks again. Keep up the good work!

One thing that I like about the MyFico website is that they offer a score simulator with every product that they sell (even the free 30 day trial). This allows you to put in different scenarios and see what would happen to your score if... you decide the scenario from their options.

jvfinlay, You are so right, I really like that website, It is very easy to use and the fico simulator is very helpful. It is the most accurate and up to date tool that i have found. It is one of my fav sites. Cindy.

You see the advertisements in newspapers, on TV, and on the Internet. You hear them on the radio. You get fliers in the mail. You may even get calls from telemarketers offering credit repair services. They all make the same claims:

* “Credit problems? No problem!”
* “We can erase your bad credit — 100% guaranteed.”
* “Create a new credit identity — legally.”
* “We can remove bankruptcies, judgments, liens, and bad loans from your credit file forever!”

Do yourself a favor and save some money, too. Don’t believe these statements. Only time, a conscious effort, and a personal debt repayment plan will improve your credit report.
This brochure explains how you can improve your creditworthiness and gives legitimate resources for low or no-cost help.
The Scam

Everyday, companies nationwide appeal to consumers with poor credit histories. They promise, for a fee, to clean up your credit report so you can get a car loan, a home mortgage, insurance, or even a job. The truth is, they can’t deliver. After you pay them hundreds or thousands of dollars in fees, these companies do nothing to improve your credit report; most simply vanish with your money.
The Warning Signs

If you decide to respond to a credit repair offer, look for these tell-tale signs of a scam:

* companies that want you to pay for credit repair services before they provide any services.
* companies that do not tell you your legal rights and what you can do for yourself for free.
* companies that recommend that you not contact a credit reporting company directly.
* companies that suggest that you try to invent a “new” credit identity — and then, a new credit report — by applying for an Employer Identification Number to use instead of your Social Security number.
* companies that advise you to dispute all information in your credit report or take any action that seems illegal, like creating a new credit identity. If you follow illegal advice and commit fraud, you may be subject to prosecution.

You could be charged and prosecuted for mail or wire fraud if you use the mail or telephone to apply for credit and provide false information. It’s a federal crime to lie on a loan or credit application, to misrepresent your Social Security number, and to obtain an Employer Identification Number from the Internal Revenue Service under false pretenses.
Under the Credit Repair Organizations Act, credit repair companies cannot require you to pay until they have completed the services they have promised.
The Truth

No one can legally remove accurate and timely negative information from a credit report. The law allows you to ask for an investigation of information in your file that you dispute as inaccurate or incomplete. There is no charge for this. Everything a credit repair clinic can do for you legally, you can do for yourself at little or no cost. According to the Fair Credit Reporting Act (FCRA):

* You’re entitled to a free report if a company takes adverse action against you, like denying your application for credit, insurance, or employment, and you ask for your report within 60 days of receiving notice of the action. The notice will give you the name, address, and phone number of the consumer reporting company. You’re also entitled to one free report a year if you’re unemployed and plan to look for a job within 60 days; if you’re on welfare; or if your report is inaccurate because of fraud, including identity theft.
* Each of the nationwide consumer reporting companies — Equifax, Experian, and TransUnion — is required to provide you with a free copy of your credit report, at your request, once every 12 months.
The three companies have set up a central website, a toll-free telephone number, and a mailing address through which you can order your free annual report. To order, click on annualcreditreport.com, call 1-877-322-8228, or complete the Annual Credit Report Request Form and mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. You can print the form from ftc.gov/bcp/conline/edcams/credit/ . Do not contact the three nationwide consumer reporting companies individually. They are providing free annual credit reports only through annualcreditreport.com, 1-877-322-8228, and Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. You may order your reports from each of the three nationwide consumer reporting companies at the same time, or you can order your report from each of the companies one at a time. For more information, see Your Access to Free Credit Reports at ftc.gov/bcp/conline/edcams/credit/ .
Otherwise, a consumer reporting company may charge you up to $9.50 for another copy of your report within a 12-month period.
* You can dispute mistakes or outdated items for free. Under the FCRA, both the consumer reporting company and the information provider (that is, the person, company, or organization that provides information about you to a consumer reporting company) are responsible for correcting inaccurate or incomplete information in your report. To take advantage of all your rights under this law, contact the consumer reporting company and the information provider.

STEP ONE

Tell the consumer reporting company, in writing, what information you think is inaccurate. Include copies (NOT originals) of documents that support your position. In addition to providing your complete name and address, your letter should clearly identify each item in your report you dispute, state the facts and explain why you dispute the information, and request that it be removed or corrected. You may want to enclose a copy of your report with the items in question circled. Your letter may look something like the one on page 6. Send your letter by certified mail, “return receipt requested,” so you can document what the consumer reporting company received. Keep copies of your dispute letter and enclosures.

Consumer reporting companies must investigate the items in question — usually within 30 days — unless they consider your dispute frivolous. They also must forward all the relevant data you provide about the inaccuracy to the organization that provided the information. After the information provider receives notice of a dispute from the consumer reporting company, it must investigate, review the relevant information, and report the results back to the consumer reporting company. If the information provider finds the disputed information is inaccurate, it must notify all three nationwide consumer reporting companies so they can correct the information in your file.

When the investigation is complete, the consumer reporting company must give you the results in writing and a free copy of your report if the dispute results in a change. If an item is changed or deleted, the consumer reporting company cannot put the disputed information back in your file unless the information provider verifies that it is accurate and complete. The consumer reportincompany also must send you written notice that includes the name, address, and phone number of the information provider. If you request, the consumer reporting company must send notices of any correction to anyone who received your report in the past six months. You can have a corrected copy of your report sent to anyone who received a copy during the past two years for employment purposes.

If an investigation doesn’t resolve your dispute with the consumer reporting company, you can ask that a statement of the dispute be included in your file and in future reports. You also can ask the consumer reporting company to provide your statement to anyone who received a copy of your report in the recent past. You can expect to pay a fee for this service.
STEP TWO

Tell the creditor or other information provider, in writing, that you dispute an item. Be sure to include copies (NOT originals) of documents that support your position. Many providers specify an address for disputes. If the provider reports the item to a consumer reporting company, it must include a notice of your dispute. And if you are correct – that is, if the information is found to be inaccurate – the information provider may not report it again.

For more information, see How to Dispute Credit Report Errors at ftc.gov/bcp/conline/edcams/credit/ .
Reporting Accurate Negative Information

When negative information in your report is accurate, only the passage of time can assure its removal. A consumer reporting company can report most accurate negative information for seven years and bankruptcy information for 10 years. Information about an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer. There is no time limit on reporting: information about criminal convictions; information reported in response to your application for a job that pays more than $75,000 a year; and information reported because you’ve applied for more than $150,000 worth of credit or life insurance. There is a standard method for calculating the seven-year reporting period. Generally, the period runs from the date that the event took place.

For more information, see Building a Better Credit Report at ftc.gov/bcp/conline/edcams/credit/ .
The Credit Repair Organizations Act

By law, credit repair organizations must give you a copy of the “Consumer Credit File Rights Under State and Federal Law” before you sign a contract. They also must give you a written contract that spells out your rights and obligations. Read these documents before you sign anything. The law contains specific protections for you. For example, a credit repair company cannot:

* make false claims about their services
* charge you until they have completed the promised services
* perform any services until they have your signature on a written contract and have completed a three-day waiting period. During this time, you can cancel the contract without paying any fees

Your contract must specify:

* the payment terms for services, including their total cost
* a detailed description of the services to be performed
* how long it will take to achieve the results
* any guarantees they offer
* the company’s name and business address

Have You Been Victimized?

Many states have laws regulating credit repair companies. State law enforcement officials may be helpful if you’ve lost money to credit repair scams.

If you’ve had a problem with a credit repair company, don’t be embarrassed to report it. While you may fear that contacting the government will only make your problems worse, remember that laws are in place to protect you. Contact your local consumer affairs office or your state Attorney General (AGs). Many AGs have toll-free consumer hotlines. Check the Blue Pages of your telephone directory for the phone number or check www.naag.org for a list of state Attorneys General.
Need Help? Don’t Despair

Just because you have a poor credit report doesn’t mean you won’t be able to get credit. Creditors set their own credit-granting standards and not all of them look at your credit history the same way. Some may look only at more recent years to evaluate you for credit, and they may grant credit if your bill-paying history has improved. It may be worthwhile to contact creditors informally to discuss their credit standards.

If you’re not disciplined enough to create a workable budget and stick to it, work out a repayment plan with your creditors, or keep track of mounting bills, consider contacting a credit counseling organization. Many credit counseling organizations are nonprofit and work with you to solve your financial problems. But not all are reputable. For example, just because an organization says it’s “nonprofit,” there’s no guarantee that its services are free, affordable, or even legitimate. In fact, some credit counseling organizations charge high fees, or hide their fees by pressuring consumers to make “voluntary” contributions that only cause more debt.

Most credit counselors offer services through local offices, the Internet, or on the telephone. If possible, find an organization that offers in-person counseling. Many universities, military bases, credit unions, housing authorities, and branches of the U.S. Cooperative Extension Service operate nonprofit credit counseling programs. Your financial institution, local consumer protection agency, and friends and family also may be good sources of information and referrals.

If you are considering filing for bankruptcy, you should know about one major change to the bankruptcy laws: As of October 17, 2005, you must get credit counseling from a government-approved organization within six months before you file for bankruptcy relief. You can find a state-by-state list of government-approved organizations at www.usdoj.gov/ust. That is the website of the U.S. Trustee Program, the organization within the U.S. Department of Justice that supervises bankruptcy cases and trustees.

Reputable credit counseling organizations can advise you on managing your money and debts, help you develop a budget, and offer free educational materials and workshops. Their counselors are certified and trained in the areas of consumer credit, money and debt management, and budgeting. Counselors discuss your entire financial situation with you, and help you develop a personalized plan to solve your money problems. An initial counseling session typically lasts an hour, with an offer of follow-up sessions.
For more information, see Knee Deep in Debt and Fiscal Fitness: Choosing a Credit Counselor at ftc.gov/bcp/conline/edcams/credit/ .
Do-It-Yourself Check-Up

Even if you don’t have a poor credit history, some financial advisors and consumer advocates suggest you review your credit report periodically

* because the information it contains affects whether you can get a loan or insurance — and how much you will have to pay for it.
* to make sure the information is accurate, complete, and up-to-date before you apply for a loan for a major purchase like a house or car, buy insurance, or apply for a job.
* to help guard against identity theft. That’s when someone uses your personal information — like your name, your Social Security number, or your credit card number — to commit fraud. Identity thieves may use your information to open a new credit card account in your name. Then, when they don’t pay the bills, the delinquent account is reported on your credit report. Inaccurate information like that could affect your ability to get credit, insurance, or even a job.

Sample Dispute Letter

Date
Your Name
Your Address
Your City, State, Zip Code

Complaint Department
Name of Company
Address
City, State, Zip Code

Dear Sir or Madam:

I am writing to dispute the following information in my file. The items I dispute also are encircled on the attached copy of the report I received.

This item (identify item(s) disputed by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment, etc.) is (inaccurate or incomplete) because (describe what is inaccurate or incomplete and why). I am requesting that the item be deleted (or request another specific change) to correct the information.

Enclosed are copies of (use this sentence if applicable and describe any enclosed documentation, such as payment records, court documents) supporting my position. Please investigate this (these) matter(s) and (delete or correct) the disputed item(s) as soon as possible.

Sincerely,
Your name

Enclosures: (List what you are enclosing)

The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint or to get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

I know of a company here in Phoenix, they repaired my credit from a 560 to a 680 in only 45 days! They're honest and will tell you exactly what to do and how long it will take. It cost me $399 a couple of years ago, but it was well worth the money. Always make sure that any company you work with is reputable!