Derogatory Items Remaining After Credit Repair?

Once you have gone through the initial process of disputing negative items on your credit and have gotten the results back from the credit bureaus, you may find that you have some negative items remaining that need to be dealt with.

Deal With Each Negative Item Individually

It is very important that each questionable item is dealt with individually, except for erroneous personal data. If you attempt to have the credit reporting agency correct several items at once, it will be easier for the agency to claim that your request is frivolous or irrelevant. If disputing multiple items, send each letter at different times, and each in a separate envelope.

The bureaus may attempt to bully you into believing that your request is frivolous, or even unlawful. But the credit reporting agencies are required to assume that all disputes are bona fide, unless there is clear and convincing evidence that it is not. A blanket dispute (i.e. all information is challenged) may be considered evidence that the dispute is frivolous, if you fail to provide any allegations concerning your specific file.

If You’ve Got Proof To Back-Up Your Claim, Send It In

I don’t recommend that you send in proof of a disputed item during the initial dispute process. This is because the dispute will be entered into the credit bureau’s system and a request will be sent electronically to the creditor to investigate the item in question. If it's not corrected once the creditor responds, this is when you should supply written documentation to support your claim.

What If You Know They're Wrong, But You Can't Prove It?

If you do not have proof, but are absolutely sure of your position on the matter, then ask the bureau to furnish you with proof from the creditor instead. As long as you're not abusing the service, they will work with the creditor to provide that proof for you. If that doesn't get you the results you are looking for, you can add a Statement of Dispute to that account or your credit report overall.

Accounts With Late Payments:

If you have accounts remaining with legitimate late payments, then calling your creditor and asking for a courtesy removal of the payment(s) might yield you results. If you've been a good client in the past, they just might do you a favor and agree to remove the late payment from your credit report. It's certainly worth a try.

Collection Accounts:

Paying off collection agencies or other debt from more than two years ago won’t help you much.

This one is pretty strange because it seems like the right thing to do, and in fact, paying down your current debt can definitely help out your credit score.

However, credit scoring systems look at the last date of activity on your account, and if the collection (charge-off is how it’s usually called) is over 2 years old, it starts to lose its negative power.

When you make that partial or full payment, guess what happens?

The date of last activity clock resets to the day you make the partial or full payment on the charge off, causing your credit score to plummet!

In this case it’s better to not pay anything, or negotiate a one time settlement with the collection agency in exchange for removing all derogatory information.

If you choose to settle these debts, you basically have three choices:

1. “ Let's Make A Deal” is the name of the game when you have a collection account. Know that If you want to play this game, then the only way they'll play with you, is if you have the money to pay as soon as you negotiate the reduced amount. Most collection account companies can/will take as little as one-half of the amount you owe and call it “settlement in full”. This is not always the case, but it's true more often than not. Start low and if you have to, work your way up in small increments at a time until you come to an agreement that you both can live with.

(If you call closer to the end of the month, they'll be more eager to cut a deal with you, because collection agents work on monthly quotas of what they can collect by the end of every month.)

2. If you do not have the money to pay immediately, then try to set up payment arrangements with the company for a reduced total amount, to be paid back within a certain period of time. If you do this, after you've paid it off, it will no longer carry a balance on your credit report, which will help with your overall score.**

3. You can just leave it alone and it will get deleted automatically seven years after the original date of delinquency of the original account. There are two things to note if you decide to do this. One, the balance this account carries, reflects negatively on your score, and heavily for the first two years. After that, it has less of an impact, but it still does have an impact. Two, if the account has a large enough balance, the company may choose to go to court and sue you in order to get a Judgment against you. If they do that, it becomes a public record item as well and has an even worse impact on your score.

**Note: If you choose either option #1 or #2 above, GET IT IN WRITING before you pay them a dime. This way you have proof of your negotiated agreement in case they don't update the credit bureaus to say you've paid the account. I've had clients call the company back after the fact, only to find out that the person who made the arrangement, no longer works there and no one has any idea what you're talking about.

By making sure you get this letter up front, you can use it, along with proof of your payment (cashiers check, money order, etc.) to send into the bureaus as proof that you paid them per the arrangements that you both agreed to.**

Judgments and Tax Liens:

Both judgments and collection accounts continue to accrue interest for the entire time you have an outstanding balance, and it's not cheap, so make sure you also take that into account when making your decision as to what to do with it.

If you own a home, a judgment will attach to the county in which you live, so if you refinance or sell during the seven year period this is on your report, you'll have to pay it anyway and it'll be a much higher amount then. Judgment creditors aren't all that eager to play "Let's Make A Deal" when they know you are refinancing or selling your home, because they know they will get paid off no matter what. Make sure you keep that in mind, and try to take care of the situation before you're put into the position of having no choice but to pay the full amount.

If you have any judgments or tax liens remaining on your credit report when it comes back to you from the bureaus after you've tried to dispute everything you can, then the only thing you can do is negotiate pay-offs or repayment terms of these items, hopefully at a reduced amount.

· For judgments, you'll need to contact the attorney who originally filed the judgment and see if they'll agree to a lesser amount. (Their contact information will be listed on the top left corner of the original judgment paperwork.) Again, be prepared to send them money immediately if you're going to attempt this approach. No one is going to play “Let’s Make A Deal”, without knowing you have the financial resources to pay-off the negotiated amount immediately. Don’t forget to make sure you get it in writing before you send them a dime.

· Once the attorney has received your payoff, they are required to send you a Satisfaction of Judgment immediately. Remember, it is your responsibility to file this document with the County Recorder’s office in the original county that the judgment was filed. This Satisfaction will show up on your credit to counter-out the original judgment. This is the ONLY way to counter it out on your credit report, so be sure to take care of this important step.

· As for tax liens, you'll need to get a hold of the correct taxing authority and see if they're willing to negotiate a reduced payoff, or at least set up payment arrangements with you. Tax liens also continue to accrue interest and it's not cheap, so you really should take care of these as soon as possible.

· Once each lien is paid off, the tax authority will issue you a Release of Lien, for you to record to counter out the original lien on your credit. After that, it's just a waiting game for them to drop off of your report. They'll have less of an impact as time goes by, and a zero balance always looks better than an outstanding balance.

Note : ALWAYS keep copies of Satisfaction of Judgments and Release of Liens. These are your only proof that matters, anytime they come into question. This is very important!

Summary - Credit Myth To Remember

“Negative items have to legally stay on your credit report for at least 7 years.”

Collection agencies and other companies have been saying this for years, but nothing could be further from the truth.

These companies can remove any information they want, whenever they want. There is nothing legally stopping these companies from removing inaccurate information at any point of time.

They do have to remove it after 7 years, but it could possibly be sooner with your intervention, so let’s get busy!

For a Simple 8 Step System to Repair Your Credit, visit http://RepairCreditTrauma.com

Can You Sue A Car Dealer For Excessive Hard Credit Inquiries?

The credit-scoring model recognizes that many consumers shop around for the best interest rates before buying a car or home and that their searching may cause multiple lenders to request their credit report. To compensate for this, multiple auto or mortgage inquiries in any 14-day period are counted as one inquiry.

· In the newest formula used to calculate FICO scores, that 14-day period has been expanded to any 45-day period. This means consumers can shop around for an auto loan for up to 45 days without affecting their scores. But the old 14-day rule might still apply at some lenders that aren't using the new version.

· The newest FICO version went online at all three credit agencies -- TransUnion, Equifax and Experian -- in 2004, Typically it takes lenders months to adjust their processes so they can accommodate revised formulas -- and some lenders never adjust.

· The FICO score ignores all mortgage and auto inquiries made in the 30 days before scoring. If you find a loan within 30 days, the inquiries won't affect your score while you're rate-shopping.

How To Avoid Multiple Hard Auto Inquiries

If you want to avoid multiple hits to your credit while you’re shopping for an auto loan, you’ll need to set aside a two week period to completely concentrate on getting your financing in place.

· Find Out What Your Credit Score Is

In order to shop for a loan without being dinged for multiple credit inquiries, you’ll need to know what your credit scores are. This will also help you to determine whether you are “bankable” or if you’re going to have some difficulty getting financing.

You can get an estimate of your FICO Score to give you an idea of the current range of your scores, or you can purchase a 3-in-1 Report with FICO in one easy to read report for just $39.95 so you’ll know exactly what your credit scores are.

· Get Preapproved At A Bank:

Now that you know what your credit scores are, call around to local banks in your area and ask, “What is the minimum credit score one needs to have to be pre-approved for an auto loan?”

If you know that your credit scores fall into their “approval guidelines”, then ask what are their interest rates and terms, such as how much down payment are they going to require.

Once you’ve determined the lender with the most favorable terms, go into that bank and apply. Some banks even have an 800 Phone Loan Center or on-line application process available so you don’t have to go anywhere.

Once you have been pre-approved by the lender of your choice, you normally have 30 days before the pre-approval expires.

If you decide to go this route, not only are you getting the best interest rate around without generating multiple credit inquiries, but you’ll also find out how much you’re approved for, which will make shopping for an auto easier in the long run.

· Getting Auto Financing If You’re Not “Bankable”

If your credit scores fall below what you’ve found to be “bankable”, you’re going to need to find financing elsewhere. There are several ways you can do this.

1. You can go through an on-line Vehicle Financing Network. These networks have access to multiple lenders and their guidelines. They will have to pull your credit in order to find out what your scores are themselves, but then they have access to many auto loan financing companies specializing in consumers with “less than perfect credit”. Once they’ve determined which lender you have the greatest chance of being approved with, they’ll forward your application along.

2. Go auto shopping and when you find the car you want, the dealership will be more than happy to submit your loan application to multiple lenders. Remember, if you decide to go this route, you have 14 days of unlimited credit pulls to count as 1 pull.

If you continue to do this month after month, you’re going to see about 5 points deducted off your score every time your credit is pulled.

The Answer To The Original Question – “Can You Sue A Car Dealer For Excessive Hard Inquiries?”

Civil liability for knowing noncompliance: “Any person who obtains a consumer report from a consumer reporting agency under false pretenses or knowingly without a permissible purpose shall be liable to the consumer reporting agency for actual damages sustained by the consumer reporting agency or $1,000, whichever is greater.”

What this boils down to is…..READ WHAT YOU SIGN! If you applied for financing with a car dealership, then you must have filled out a loan application. Did the paperwork that you signed say that they would submit your application to multiple lenders?

If you did not grant them permission to pull your credit, then you may have a case to sue for $1,000, but in my view, it’s going to be way more hassle than it’s worth. The easiest way to handle the situation to your benefit, is to dispute the inquiries with the credit bureaus that are reporting them.

If the creditors that pulled your credit cannot prove “permissible purpose”, then the credit reporting agencies will remove these inquiries. If the creditors come back stating they had permissible purpose, you have every right to ask them for the documentation to prove it. Again, if they cannot come up with that documentation, the credit reporting agencies will have to remove the inquiry.

Once the inquiry or multiple inquiries are removed, you should see an increase in your credit scores. It’s a tiny bit of work on your part, but way easier than trying to sue for $1000.00.