NEW YORK (MainStreet) — As many as 40 million Americans have errors on their credit report. In fact, one of the first things consumers are supposed to look for when they pull a credit report is errors. The problem is that once you find the errors, it’s hard to know how to go about removing them. Sure, lots of people will challenge them for you -- but how do you go about actually getting items in dispute off of your credit report?
Going It Alone
John Heath, directing attorney of Lexington Law, is quick to point out that you can hire a credit repair company. However, much of the time, the company do anything for you that you can’t do yourself. He advises that those choosing to go it alone start with the original creditor.
“You have three reasons you can challenge something on your credit report,” he explains. “If it’s not yours, if it’s not accurate or if the reporting is questionable.”
In the event that the reporting is not accurate, a creditor must remove the item from your credit report. If the creditor doesn't, you have grounds to file a lawsuit under the Fair Credit Reporting Act. Heath points out that this is “expensive and time-consuming,” so your best bet is to try and get it removed through a straight challenge.
“Tell the creditor that they’re trying to collect an invalid debt, that they’re violating the Fair Debt Collection Practices Act and that if they don’t remove the item you’ll hire an attorney,” Heath says. In many cases, that can be enough to get false items off.
What About Questionable and Inaccurate Items?
Todd Mark, vice president of community relations with Consumer Credit Counseling Services of Greater Dallas, notes that there are basically two types of credit errors when you get right down to it: actual errors and things that you think are errors, but are actually accurate.
“False information is easy to get removed,” he says. “The truth is a lot harder.”
In the case of patently false information, Mark urges you to bypass the creditor entirely and go straight to the credit reporting bureaus.
Heath concurs. “In a case where you’ve asked to validate a debt and the company was unable to, you need to send that evidence to the credit reporting bureaus,” he says.
Even if they ask for more information, go through the credit bureaus. It will all get sorted out one way or the other and you’ve done your due diligence. Don’t forget to include any supporting documentation that you might have supporting your side of the case. “If you’ve tried to validate the debt and they’re asking for more information, you now have a piece of evidence to submit to the credit bureaus.”
Should You Negotiate?
In a word, yes -- just don’t pay someone else to do it for you.
Mark points out that a company offering to negotiate your debt down to nothing is a huge red flag that you should be running in the other direction. “We don’t do debt negotiation,” he explains. “We do, however, counsel our clients on how to best negotiate for themselves.
The bottom line when negotiating with a creditor is to get it in writing, especially if your objective is to get the item removed from your credit report. Mark points out that while creditors aren’t supposed to do it, they still will a lot of the time. Why? Simply because it means they get their money faster and in a larger lump sum. At the end of the day, the worst they can say is “no.”
Heath points out that this kind of direct appeal -- asking for what’s called a “courtesy adjustment” -- can often make all the difference in the world. In any event, it’s not going to make your credit report worse. “I’d go to them and say that you’re trying to enter into a new relationship and that their reporting is preventing you from doing that,” Heath says.
At the end of the day, when you submit and request an inquiry, the credit bureaus have 30 days to complete their inquiry and rule one way or the other. After that, they either need to send you evidence that the debt is valid or remove it entirely.
--Written by Nicholas Pell for MainStreet