* “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 knowledge of your rights will improve your credit report.
However, When it comes to dealing with collections agencies, you have a very important right as outlined in the Fair Debt Collection Practices Act(FDCPA): The right to have a collection account "validated."
Section Section 809(a) of the FDCPA requires a collector, within 5 days of the first communication, to provide the consumer a written notice (if not provided in that communication) containing:
(1) the amount of the debt (2) the name of the creditor (3) a statement that he will assume the debt's validity unless the consumer disputes it within 30 days, (4) send a verification or copy of the judgment if the consumer timely disputes the debt (5) identify the original creditor upon written request
This process is quite different from the "verification" process referred to above. When a credit bureau asks a creditor to "verify" information, the investigation that follows can be pretty cursory. The creditor reviews its records and any information supplied by the consumer and then decides whether it (the creditor) was right or wrong.
When a collection agency is asked to validate a debt, by contrast, the process can get pretty involved. The collector must prove that the debt is your responsibility, and also that they have the legal right to collect it from you. Furthermore, the collector has to cease all collection activity until they provide this evidence to you. If the agency can't validate the debt, it must end its attempts to collect on the debt and stop reporting the collections account to the credit bureaus.
Note that your right to validation applies specifically to collection agencies, not to the original creditor. Collection agency records are presumed to be less reliable than those kept by the original creditors. Collectors are often guilty of going after the wrong people or misstating the amounts owed; the validation process is meant to protect consumers from those practices.
To validate a debt, the collector needs to present documentation - obtained from the original creditor - proving that you do indeed owe the money. Validation can be a powerful weapon in your fight to clean up collection actions on your credit report. Many times collectors don't have the documentation required, especially if the debt has been passed around from one collection agency to another, as often happens. Frequently, they have little more than a computer printout to back up their claims, and the Federal Trade Commission has made it clear that such a "mere itemization" isn't sufficient proof to constitute a validation of a debt.
The validation process can not only help you eliminate collection accounts that don't belong to you, but it might help you get rid of some that actually do. That last statement might surprise you, particularly if you've heard the credit bureau company line that you can't legally remove true, negative information from your credit report.
You will find that sometimes - not always, but sometimes - you can get accurate information removed from your file, especially if it has to do with an old collection account. Now, the bureaus and Fair Isaac will tell you that this isn't "playing fair" - that the integrity of the credit system depends on credit reports reflecting the most complete picture possible, including all available negative and positive information.
Cleaning up credit report requires changing ones spending, saving and bill payment habits. One can achieve a good credit report from the agency if you know how to improve bad credit report. Companies that provide credit cards to people with bad credit are required to make monthly reports to major credit bureaus, which maintain credit history of millions of people across the country.
Credit card companies usually have an integrated system that enables them to be well connected to these bureaus to verify the credit rating of people applying for bad credit cards. Cleaning up credit report is a learning process. It requires a lot of changes in your financial habits. Every time an individual is evaluated while applying for credit, the lenders analyze an individual's credit worthiness before approving for a fresh credit.
How to Improve Bad Credit Report?
There are easy ways of cleaning up ones credit report. You need to do this especially if you have a bad credit record. The first step is to analyze how such a report happened. If it was for not making any payments to the credit card bills, the right move is to complete the payments towards the debt and close it. The right step towards cleaning up credit report would be to cut off all that made it bad in the first place. A late payment usually becomes a problem at a later stage. If money is limited, then one must curb the spending.
An unorthodox solution to solve a bad credit situation is to apply for more credit from known companies, which are flexible in paying back. By borrowing small sums, one can make quick easy payments in small amounts. This will enable you to impress other people whom you can approach later on. The next step would be a close investigation of ones credit report provided by the bureau.
Negotiating Credit Reporting
The information provided by the credit bureaus can sometimes go wrong, as they have to maintain the ratings of millions of people. Credit can be denied on the basis of the credit report. One should get a copy of the report from the bureau and review it. The information should be thoroughly examined for all possible errors. If any derogatory information is provided, one can contest the issue and bring it to the notice of the bureau. The bureau must reinvestigate, make necessary changes and send the corrected copy to all the creditors who have analyzed the earlier one in the recent past.
Negotiating credit card reporting and cleaning up credit card report are very important steps to ensure timely and hassle-free loans.
Both Michael Saunders & Ryan Arsendatama are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.