Erasing Negative Items From FICO Report
The best way to rebuild your FICO score – Is to delete negative credit items from the credit score. One of the most critical stages in getting the best home mortgage rates, is having a better FICO score. For most people a low FICO score means paying high mortgage interest rates (see how FICO score affects mortgage rates) and this can be avoided.
Having Negative Items On Your Score
There are three credit report agencies (CRAs) – Experian, TransUnion, Equifax. Their job is to receive information and to calculate it on a regular basis, and be able to produce a creditworthiness figure – known as FICO score.
These three credit report agencies are getting the information on your credit behaviors, credit balance, credit history and amount of debts from the creditors and credit companies which you use.
These three credit report agencies are getting credit inquiries upon your credit score by lenders (mortgage lenders for example) to help the lenders evaluate your credit payback possibilities and to help them with the risk management regarding ‘giving their money’ to people who will not be able to follow the scheduled payment plan.
If you have negative items your score gets a direct blow, and the lenders can see the exact negative information, behind the ‘cold’ figure. This means that when two people request a mortgage and they have the same low score, one can be denied because the negative items look more risky to the lenders than the other person with the same score but for different reasons.
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Many Credit Reports Contain Serious Errors
When you make a purchase you give your information to the merchant, mistakes can happen there. The deal is authorized by the creditor when the merchant fills the information to get it approved, errors could be added there. The creditors collect information and send it to the CRAs – errors can be added there.. data could be outdated, misspelled, not updated, human mistake, like a wrong field being filled or left empty.
Computers make mistake when information is transfered, or when saved in different format files (Doc – Docx…) and so on..
How To Delete Negative Items From Report
Negative items includes late payments, missed payments, partial payments, or any other form of default on the account.
1. The first thing you must do, is to request your annual free credit report from each of the three CRAs. Since you can never know with whom your potential lenders will ask an inquiry from, you must make sure to remove negative items from all three agencies.
2. Scan the report line by line thoroughly! Search for every mistake you can find. Look at misspelling, outdated information, wrong information, inaccurate information, mis leading information. The credit report should be updated each 90 days, in most cases it is not that up to date… so if you began to fix your credit, there might be enough negative credit items to dispute.
3. Protect yourself from identity theft by checking your credit report regularly. By the new 2011 FACTA, creditors should give you some kind of alert notice when they find any clues to identity theft by noticing that something is amiss with an account. But it is still your responsibility to see that these negative items do not get added to your credit report.
4. Act fast when you get any evidence that a negative item has been send by creditors to the credit bureaus. By the new 2011 FACTA the creditors must send you a notice after negative information is send to the CRAs. Check the information, do not neglect, you will not be notified again concerning other negative items being sent!
5. Write dispute letters on any inaccurate or wrong data that you find. By law the credit bureaus must investigate and verify each and every claim with the creditors – If they fail to verify – The negative credit item will be removed!
6. Challenge their verification process. If they contact you and say that the negative item has been ‘verified’ you can (by the FCRA law!) request them to disclose the verification method upon which they reached the verification result. If they do not send you their verification method in 15 days they are violating your rights! You can send a second time negative item dispute which might be approved.
7. Add a personal statement to each negative item which you did not manage to remove from the FICO report. The credit bureaus allow you in case that the negative item stays to add a consumer statement (personal comment) which will be seen by the lenders beside to the negative item. There you should explain why it is there so the lenders understand your ‘side of the story’ and not rely only on ‘un paid debt’ negative reflection.
Avoid Credit Repair Amateur Mistakes
Since in this review on how to remove negative items from credit report is only for informational use, and is not a professional advise, making an amateur mistake at any stage. Know that companies may decline to investigate a dispute they find to be “frivolous” or “irrelevant.
The best advice is to invest (not much) in credit repair software or online credit repair program , to guide you through this procedure.
See this recommended Credit Repair University Program, you will have to invest less than $50 (one time fee) but the alternative is worse.. You are probably paying more than that each month to greedy credit companies, and paying to others to do it for you will cost $500+ so do your math .. don’t be cheap where financial education is required.