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Old 02-07-2012, 05:24 PM   #1
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Who Needs Credit Report Help?

I've seen quite a few posts about credit reports lately. If anyone needs help sorting through what to do with theirs, let's hear it. You can either post here, or PM me if you'd prefer.

STEP ONE: Pull your credit report from all 3 bureaus
You are allowed one free copy of your report per year per bureau (Transunion, Experian, and Equifax). You can do this at http://www.annualcreditreport.com/ You don't have to pay anything, and if they offer you anything, just decline it. You only want the free reports.

STEP TWO: Make Notes
Look through the reports and make notes on what you see. Are there things on there that aren't yours? Are there things being reported inaccurately (late payments, defaults, etc when you have always paid on time). Take each report one at a time, each debt one at a time. It can get overwhelming.

STEP THREE: Validate, Validate, Validate!!!!
If you have debt that has gone to collections, before you send any money, or even SAY anything to those collection agencies, send a validation letter. A collection agency must be able to prove that a) they are legally allowed to collect the debt, and b) that you are legally obligated to pay it. If they cannot validate the debt they have to remove it from your report.

Make sure to send these letters certified mail with the green return receipt. You will need to be able to prove that you sent this and it was received by the collection agency. And DO NOT SIGN THEM!!! It would be very easy for your signature to end up on an agreement you did not sign.


STEP FOUR: Get it in writing
Once a debt is validated, make a payment agreement with the collection agency. Get it IN WRITING what the agreement is, and ask that part of the agreement be that they remove the listing from your report upon completion of the payment arrangement. Do not send money until you have that agreement (as agreed) in writing.

STEP FIVE: Make payments
Never give a collection agency your credit card info OR your bank info. I have heard horror stories about people getting wiped out, and while you may eventually get that money back, eventually could take a LONG time. Don't chance it. Send a money order or certified cashier's check.


There are a lot of different ways this can all work out since everyone's situation is unique, but these basic steps should give you a place to start.


FAQ
Q:Why would you write for validation to the collections agency rather than disputing through the credit reporting agency?
A: This is a very good question. Let me start off the answer by elaborating on a point...

Most collection agencies, when asked to validate a debt, will instead only provide verification. What is the difference?

Validation: In order to validate a debt, a collection agency must provide proof that they legally 'own' your debt. They must provide a contract or other supporting documentation showing that they legally obtained this debt from the original creditor (or ANOTHER agency or agencies that legally obtained the debt...and yes, they would need contracts and licenses from EVERY collection agency in the 'chain of debt custody'), and that they are legally allowed to collect debt in general (you can't just decide one day to be a debt collector and start calling companies to see if they will sell you their debt accounts. There are licenses and such that must be obtained, etc.).

In addition to providing this proof, they must also provide supporting documentation that you owed the debt in the first place (a copy of a contract signed by you as well as any statements or payment information on the account from when it was active with the original creditor). Most collection agencies CANNOT/WILL NOT validate debt. I have only once ever, in all of my years of cleaning my credit report, had a collection agency provide me, not only proof that I legally owed the debt, but also proof that they legally purchased the debt and were legally entitled to collect it (That collection agency, by the way, was AFNI). Most collection agencies will only verify a debt.

Verification: This is where a collection agency will send you a document that shows your name, address, the original creditor, original debt amount, and possibly your social security number. This is supposed to scare you into believing that they 'know' you owe it, and now you have to pay them. Or they will send you a copy of your last statement but not provide any documentation whatsoever that they legally purchased the debt or that they are legally allowed to collect debt in the first place.

Verification IS NOT Validation under the stipulations of the Fair Credit Reporting Act

Now, to answer your original question of why one would want to contact a collection agency directly instead of having the credit reporting bureau do it...

I, personally, would not trust anyone to care about my credit report more than I do. I have no idea if the credit reporting bureaus require validation or verification of a debt. As a consumer, it is my right to see any and all information any collection agency claims to have regarding any debt they have reported on my credit report.

I would no sooner pay a debt because the credit bureau told me I had to than I would if a collection agency told me I had to. I want the proof. I want to see it. It is my right as a consumer and it is their obligation as a collection agency to provide to me this proof. Until I have that documentation in my hands, and it checks out, they aren't getting a penny. And if they cannot/will not provide that proof, then they better lay off me and my credit report unless they want to get sued.

Again, I want to reiterate that I am NOT advocating not paying your (general your) debts. If you owe something, you should pay it. However, collection agencies need to provide that proof, otherwise who's to say that some other agency that LEGALLY obtains that same debt doesn't come around later and want their money? If that second company legally obtains that debt, but you already paid some other company that didn't, guess what? You get to pay that debt again. And good luck getting your money back from the first company because they will most likely be long gone.

That is why I do it myself instead of letting the bureau do it for me. Yes, it is more work, however, at least then I know that I am paying the correct company for that debt, and once I do, I know I'm done with it.

Q: If a company is actually able to validate my debt, should I call them and make them an offer? How much should I offer?
A: Firstly, never call a collection agency. There would be no proof of what was said or agreed to. Always make and accept offers in writing. Secondly, how much you offer will always depend on several factors: how old the debt is, how much the debt is now, how much the debt was originally, how much you can afford, etc. If it's an older debt and reaching it's statute of limitations, and you can offer a lump sum payment, chances are good you can get a good chunk taken off.

Q: I sent a validation letter to a collection agency, but they didn't send back all of the info I requested, what do I do now?
A: According to the Fair Credit Reporting Act, collection agencies are required to be able to validate a debt. If they cannot do that, then they cannot collect. If they do not provide the proper info, contact the credit reporting bureaus and send them your evidence. The bureau will contact the agency, and if the agency still does not comply, the bureau will remove the listing from your report.

Q: The collection agency I'm working with is saying they cannot remove the debt listed from my report and that they can only mark it paid. Is this true?
A: It is not true. They put it on there, they can take it off. If they say that, then they are lying or are misinformed. If anyone who works in collections knows differently, please let me know, but as far as I know, they can take it off, they just don't want to (they probably have to pay a fee to remove it).

Q: I had a debt for a certain amount. It has been charged off and a collection agency bought it. They now have it for hundreds more than what it was. Can they add more money onto my debt?
A: Yes, they can. Collection agencies can add fees and interest, however, you don't necessarily have to pay it all. They most likely bought your debt for pennies on the dollar, so don't let them tell you that you have to pay the whole thing. Most collection agencies are willing to negotiate unless you owe an obscene amount of money, and then they are more likely to drag you to court.

Q: What do I do if I have absolutely no credit score? How do I build credit?
A: I cannot give you a map on what to do since everyone's situations, behaviors, etc are different. But I can tell you what I would do if I could start over again.

1) I would get a credit card (either secured or non-secured) and only use it if I had the cash on hand to pay for things and then I could go home and pay the bill immediately. Credit cards are a temptation that is not easily managed. I would try to find one without an annual fee, even if the interest rate is sky high.

2) I would open a store card at a place that I needed to make a purchase at anyway (i.e. Wal-mart, Target, Sears, Home Depot, etc.) Kind of like a credit card, but treated slightly different on the credit reports.

3) I would save up money for a significant down payment on a USED car (like 50-75%) and then go in and put a ton down and finance the rest. The payments would be ridiculously low (depending on what I got) so it would be easy to make those payments and not get repossessed. I would only do this if I had an emergency fund in place to take car of any repairs that might pop up. And I would only make payments on the car for 12-18 months before paying it off, if financially possible.

That's what I would do.

Q: When you are actively trying to clear up your credit report, is it necessary to purchase credit monitoring services to 'keep an eye' on things?
A: That is really up to you. I have done fine with only pulling it once per year for free, but if you have a pressing need to repair your credit (like you need it within the next year and you are actively disputing some ugly stuff) then you might want to get the monitoring.

Do your research first though. Make sure what you are getting is access to all 3 bureaus AND the ability to update the reports that are pulled. There are services that pull all three reports at first, but only notify you that changes have been made to your report. They don't let you SEE the changes unless you buy another report, and you may have to buy reports for all 3 bureaus again. Pulling reports from all three bureaus once a month can add up to an ugly amount very quickly.

Personally, if you feel it necessary to monitor, I would purchase reports every 3 months. The reason I say this is because it can take months to do validation letters, response letters, credit bureau disputes, updates on disputes, etc. One cycle might TAKE 3 months. No sense paying for the in between because nothing will be happening and you'll be wasting money.

Q:Is there anywhere I can get my credit score for free? All of these places want me to pay a fee.
A: www.creditkarma.com (pulls from Transunion) or www.creditsesame.com (pulls from Experian). But keep in mind, it is not the most thorough at pulling up everything on your reports, but it will give you a good idea of where you are at.

Q: How do I know what the statute of limitations is for my state?
A: You can start here but this may not be up-to-date, http://credit.about.com/od/statuteof...restatesol.htm

Q: What is the difference between Reporting Statute of Limitation and Collection Statute of Limitations?
A: Reporting Statute of Limitation and Collection Statute of Limitations are TWO COMPLETELY DIFFERENT ANIMALS. Reporting Statute of Limitation is how long a debt is allowed to be shown on your credit report (from the last date of activity on the account) and Collection Statute of Limitations is how long a collector has to collect the debt (from the last date of activity on the account). Reporting SOL is around 7 years for bad debts, 7-10 years for Chapter 13 bankruptcies, and 10 years for Chapter 7 bankruptcies. If you live in a state with a 10 year debt Collection SOL, it is possible for something to come off of your report, but for you to still be responsible for the debt for 3 more years.

Q: Do you know where I can find my credit report online (I'm in Canada)? I really really need to work on my credit, but don't know where to start
A: I know nothing about Canadian credit reports (nor the laws or rights afforded to Canadian residents), but here are some things I found online.

Equifax: http://www.consumer.equifax.ca/home/en_ca
Form: http://canadian-creditreport.com/equ...rt_request.pdf

Transunion: http://www.transunion.ca/
Form for Quebec: http://canadian-creditreport.com/tra...rt_request.pdf
For for non-Quebec: http://canadian-creditreport.com/tra...rt_request.pdf

Experian: Preliminary research indicates that Experian does not operate in Canada?

Credit Reporting Info
http://www.justice.gov.sk.ca/Credit-Reporting-Act
http://www.ehow.com/list_6551097_cre...ws-canada.html

Q:I have a collector calling my family members (or other people that are not me or my spouse) trying to track me down and they are saying things about my debt and what not. Can they do that?
A:I took this from a credit reporting website:

Public embarrassment and the prospect that your personal information might be shared with others are real concerns when dealing with a collection agency. The FDCPA includes provisions intended to safeguard privacy.

The FDCPA says discussions about the debt can only be held with (1) the individual, (2) the creditor, (3) an attorney representing one of the parties, and (4) a credit bureau. Public airing of your business intended to shame you into paying a debt is not allowed. Debt collectors:

Cannot exchange (with other agencies) information about individuals who allegedly owe a debt.
Cannot distribute a list of alleged debtors to its creditor subscribers.
Cannot advertise a debt for sale.
Cannot compile a list of debtors for sale to others.
Cannot leave messages with third parties, asking them to have the debtor call the collector.

ETA: Check out this page to see what to do if the agency doesn't knock it off and keeps acting illegally http://www.privacyrights.org/fs/fs27-debtcoll.htm#7

You can file a complaint and/or sue them.

Letter Templates
* Pay for Delete Template to send to collection agency: in Post 83 (see my comment about verbiage change)
* Validation Letter to collection agency: in post 494 I AM NO LONGER E-MAILING THIS
* A "Hey I'm trying to pay you please answer my questions" letter to collection agency: in post 129
* A "Hey these people aren't answering me, please remove this from my report" letter to the credit bureau: in post 217

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Old 02-07-2012, 05:49 PM   #2
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Re: Who Needs Credit Report Help?

Thank you!
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Old 02-07-2012, 05:51 PM   #3
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Re: Who Needs Credit Report Help?

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Thank you!
You are very welcome
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Old 02-07-2012, 06:09 PM   #4
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Re: Who Needs Credit Report Help?

Listen to this mama! She is AWESOMELY knowledgeable about this stuff!!
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Old 02-07-2012, 06:11 PM   #5
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Re: Who Needs Credit Report Help?

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Originally Posted by All Fleeced Out View Post
Listen to this mama! She is AWESOMELY knowledgeable about this stuff!!


You are sweet mama.

I'm glad Transunion got your items removed so quickly. If you need anything else, just let me know.
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Old 02-07-2012, 06:12 PM   #6
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I have just done this. I actually do give my credit card number over the phone even though I probably shouldn't. I guess I'm too trusting
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Old 02-07-2012, 06:15 PM   #7
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I have just done this. I actually do give my credit card number over the phone even though I probably shouldn't. I guess I'm too trusting
Well, credit card is okay if it doesn't have a large limit and it's not the only one you have, you know? My concern would be people with large credit limits, or people with only one card getting their card maxed out and then having to wait months to get it straightened out. Or giving an agency you bank info and they wipe you out completely and you then cannot get that money back for heaven knows how long.

It is much safer to send a cashier's check or money order.
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Old 02-07-2012, 06:15 PM   #8
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You are sweet mama.

I'm glad Transunion got your items removed so quickly. If you need anything else, just let me know.
Lol - I told DH that I got 2 items off his report for him, and he was like, "That can happen?!" I just told him, "You're welcome."
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Old 02-07-2012, 06:27 PM   #9
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Originally Posted by All Fleeced Out

Lol - I told DH that I got 2 items off his report for him, and he was like, "That can happen?!" I just told him, "You're welcome."
Yep. Most people just don't know.

I want to make it clear now, before anyone brings it up, that I am NOT advocating not paying your (general your) debts. However, these agencies have rules they are supposed to abide by, and they need to start abiding. If a company validates your debt, please pay it. But if they can't validate it, then they need to either get the documents to do so, or they need to leave you alone.
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Old 02-07-2012, 06:50 PM   #10
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Yep. Most people just don't know.

I want to make it clear now, before anyone brings it up, that I am NOT advocating not paying your (general your) debts. However, these agencies have rules they are supposed to abide by, and they need to start abiding. If a company validates your debt, please pay it. But if they can't validate it, then they need to either get the documents to do so, or they need to leave you alone.
^^ Yeah that.

The only ones she told me to dispute were the ones my DH didn't know about. (Which means his ex-wife opened the accounts when he was deployed.) I'm sure they don't just go removing random items on the credit reports because you dispute them, though wouldn't that be nice? lol
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