For example, if your address is listed as 333 S. Anywhere Blvd. on one application for credit, and 333 South Anywhere on another account, the credit scoring system sees each difference as a separate address. This can make you appear to be unstable and raise a red flag. Be sure to verify the data being reported.

Step 5: Dispute inaccuracies immediately by starting an immediate investigation by phone or online of any credit items you want to dispute.

If they're a big creditor such as a Visa Card, the dispute may show a "pending" deletion on Experian right away, in other words, any bad item may be temporarily suspended pending investigation.

Credit Repair Tip #3: Know Your Credit Scores

It's possible that you already know your credit scores, but it still helps to know exactly what they represent. This way you will know what areas need credit repair. As mentioned in Credit Repair Tip #1- Credit Score-What is it, about seven years ago a company called Fair Isaac developed a system to "predict" who might go into credit failure by analyzing the data on people's credit reports.

This system has gained more popularity in recent years and now each of the three main credit bureaus licenses Fair Isaac's system for generating credit scores. Equifax calls the score based on this technology your FICO score. Experian calls it your BEACON score. TransUnion calls it your EMPIRICA score.

Why does this score matter?

Well, before credit scoring came into being, you were considered to have great credit if you didn’t have too many bills and paid them on time. Today it’s different. Since people applying for a mortgage or car loans are nothing but a "number" to the companies that loan them money, that score is important. If you have too many bills, you may have a problem even though you may be a fine upstanding citizen and pay just about every bill on time.

The Fair Isaac algorithm for predicting credit failure may "mark" you as a poor risk using its predictive analysis. Even if you've paid your bills for many years and someone else has claimed bankruptcy in the past three years, the "bankrupt” person may be the one to get the credit! It is not fair, but to understand the system you must think like the "computer" thinks.

Picture this--the person who has just claimed bankruptcy has no debt, and is forbidden from filing bankruptcy again for another seven years. Furthermore, they may be applying for a house or car, which is a “secured debt”--meaning that the loan they’re applying for, is "secured" by some kind of property. The lender likes this security or collateral as they can take that house or car away and sell it, which is a secure situation for them.

You on the other hand may have lots of "unsecured debt"--including credit cards that are not secured by any property. So, in short, you may be a great person and even a great credit risk, but if you have a poor credit rating, you may not be able to get a loan unless you go through the process of credit repair.

How do you find out your credit score?

There are three credit reporting agencies: TransUnion, Experian, and Equifax. TransUnion will tell you your score over the phone for free. The other two bureaus will "sell" you a look at your score on the phone or online for a fee. You can also pay a fee for your full credit report from each of the three bureaus by mail, on the phone, or online--and each credit report will show your score.

Remember, once a year you can obtain your credit report from all three credit bureaus for free, but it may not have your scores on it. Finally, if you have recently been denied credit, you are entitled to a free copy of your credit report.

Credit Repair Tip #4: Why You Should Dispute Your Derogatory Items

There are some credit repair consultants who will charge you $700 or more to "fix” your credit. In fact, all they're doing is disputing derogatory items on your credit report in order to get them removed from your record. Why does this credit repair tip work? It can work in two ways:

1. If the item is inaccurate. In other words, you in fact don't deserve to have this item on your report and it's inaccurate. For instance, lets suppose there is an open collection on your credit report for $150, but you really paid it two years ago. If you dispute this item with the credit bureaus as inaccurate, you're exercising your rights under the Fair Credit Reporting Act to get this item taken off. Your creditor is required by law to verify items and report back to the credit bureau within 30 days. See dispute letters, Collector Letter For Validating Debt.

If they find the item is old or inaccurate, they will tell the credit bureau and your item will be deleted. Sometimes you have to help prove to the creditor that the item is inaccurate (i.e. showing them a cancelled check for payment), to have the item deleted off your credit report. You are now underway in your credit repair.

2. The item is accurate but the item gets deleted anyway--this can happen for several reasons:

a. The creditor got paid and doesn't care to respond to the dispute from the credit bureau. They let the item get deleted by not responding. This happens mostly with small collections that were paid. But guess what! Each collection item deleted can be 20-25 points in your favor each. So, in other words, you can get items deleted when you dispute and the creditor doesn't try and prove the item accurate. This often happens with collections and student loans that have been paid off. The percentage of the time that this happens is about 30%.

b. You can talk to your creditor directly and ask them "do you delete?" In a collection agency, about 50% of the time they will "delete" - in collection lingo that means to delete the item from the credit bureaus once you pay. Sometimes you have to pay a little deletion fee. But remember, every collection taken off your credit is worth about 20+ points! Ask your collector if they delete.

c. If the item is accurate but your creditor doesn't "delete." By calling the creditor and explaining you're buying a house or car, sometimes they will temporarily delete the item from your credit (this lasts about 6 months). They do this because they don't want to be hassled or sued over the item.

They know the purchase is important to you and don't want the hassle of you calling, writing, and disputing again and again. About 30% of the time creditors will delete your item temporarily.

This happened with a client who had an AT&T Visa (two 60 days late) and Bank of America mortgage (one 30 day late). He was able to get them changed. If creditors know you're buying a house, they'll often play ball to avoid hassles and lawsuits. If they don't play ball, fax them the same dispute letter (Credit Bureau – Several Disputed Items – Example #2) every week asking them to delete. Send it to the credit manager in charge. Also sent a dispute letter every 30 days or so until the creditor grows weary and they delete (see dispute letters Creditor/Credit Bureau – 2nd Letter – Follow-up after 30 Days and Creditor/Credit Bureau – 3rd Letter – Follow-up after 60 Days).

Dispute and use persistence. That's what the professionals do. Now you can do it too.

If necessary, you can send a letter explaining you are going to file a complaint with the Federal Trade Commission (“FTC”). See dispute letters, Intention to File Complaint with FTC – 1st Letter, 2nd Letter and 3rd Letter.

Credit Repair Tip #5: Example of Raising Your Score in 24 Hours

Let's suppose you have a loan application pending with little time to fix the disputed items. Let me share an anecdote of what happened to a friend of mine: He was applying for a loan on a six-unit and went to a loan broker who told him his "middle score" was 622. (Mortgage lenders pull all three reports and look at the middle score).

He had a 580 with TransUnion, a 622 with Equifax, and a 634 with Experian, thus his middle score was 622. Just to let you know, 620 and up is considered light to medium risk and you can get just about any loan including low or no income verification loans, just at a higher rate than normal.

So what was the game plan here?

To do credit repair on the Equifax score since it was the middle score, and thus the most important score. It just so happens that it if you follow our steps at credit repair made easy can boost your Equifax score: just start a credit item investigation online or by phone! He went online, paid with his Visa at www.equifax.com (click on personal at the top), started disputing negative items online, and his Equifax score temporarily increased while the items were getting investigated (keep in mind you can obtain your credit report free once a year). See how credit repair helped him!

Also, since he had a Visa card with two 30 day late payments on it in the past 24 months, he called the Visa company, explained that he was in a dire situation and that his payment had been delayed a couple of times because of their pay by phone equipment, and they started an investigation internally and temporarily deleted his derogatory items. The result was a quick boost to his credit score. His Equifax score jumped up to 650, a 28-point increase. Credit repair worked!

SIDEBAR___________________

Although, Equifax at this time may not be boosting the scores when you start an investigation, but TransUnion appears to be! This may change, but I left this Credit Repair Tip in the book as credit bureau policies change regularly and it still makes sense to at least try the above to see if your score changes in your favor.

Credit Repair Tip #6: Know How to "Pull" Your Credit Report, and How Not To

If you pull your credit report yourself, there will be no negative consequences in the form of "inquiries", or a "mark" against your credit. However, if any car dealer, mortgage lender, credit card company, or any other type of creditor pulls your credit report, it counts against you as a credit inquiry.

At present, these inquiries stay on your credit for two years, and are difficult to get removed. For example, my husband ran a report for an individual and found he had over 100 inquiries within a one-month period. Because of this, his credit score was so low he could not qualify for a mortgage.

This emphasizes the importance of not having to many inquiries, especially if you’re working over the Internet. If you're applying for mortgage refinance or new home loan, you can apply for up to six home loans in a 30-day period before your score changes. Just to be safe, if you are curious about your credit reports always pull them yourself.

If you find several hard inquiries on your report and you didn’t authorize them, send a letter to the credit bureau to remove. See Remove Creditor Inquiry Letter in the sample of dispute letters.

Contact the credit reporting agencies/bureaus to obtain one, or look them up on the web at:

Experian www.experian.com Equifax www.equifax.com TransUnion www.transunion.com

Credit Repair Tip #7: Only the Past 24 Months Really Count

In today's lax credit lending environment, lenders are not looking at the past seven years as before but are instead looking at the last 24 months. This could be good or bad news: if most of your mistakes are in the past - previous to the 24 month cut off then it is easy to qualify for credit.

But if you've been a saint for the last seven years and in the last 24 months you've made a few mistakes it's going to cost you dearly. It’s important for you to know that the past 24 months are what count the most. Even people with bankruptcies more than 24 months ago can apply for credit and often get it.

Credit Repair Tip #8: Pay Collections for the Quickest Results It helps if you think the way the "computer" thinks: people who are about to default on their loans start by getting behind on their phone bills, credit cards, and other accounts. Any unpaid collection or 30+ day late on your revolving accounts can lead to 30 or more points deducted from your credit score.

The good news is paying collections is one of the fastest ways to improve your credit score. The best way to do this is to call the collection company and ask the question:

Do you delete? When you ask this question you're talking in "collectors language." You are asking if the collection agency will completely remove your debt from the credit reports if you pay your debt. About 50% of them will.

Sometimes a collection agency even has an up to date computer system that can remove your debt from the credit bureaus immediately, thus clearing your credit record in 24 hours. If the collection agency doesn't "delete", pay them anyway. The "collection paid" status is much better than a collection owing on your credit report.

Credit Repair Tip #9: Keep Disputing All Items, Again and Again

It's important that you know the most powerful word in credit repair: DISPUTE. Under the Fair Credit Reporting Act, you have several rights to amend your credit report. One is the right to "dispute" any items you think are inaccurate.

For instance, a collection you think is not yours or a revolving account you think you're never late on, such as a credit card. You have the right to call, mail, or go online to dispute all items you think are inaccurate.

Credit Repair Consultants that charge $700 or more will actually just dispute every derogatory item on your credit report until your creditors get tired of the disputes and take the item off. Most creditors such as collection agencies or credit card companies know that customers who are disputing their credit items are vigorously looking to buy a home or car and they don't want to get in the way. Even if the derogatory item is correct. Many times creditors will remove it temporarily so that you can apply for your loans.

Many times derogatory items will pop back up on your credit report within six months or so, since computers automatically update information to the credit bureaus.

However, disputing your derogatory items and being persistent is the most important credit repair strategy of all. I have some sample dispute letters if you need them.

Credit Repair Tip #10: Dispute Items Online or Over the Phone for the Quickest Results

All three credit bureaus are available online. All you need is to have purchased your credit report or obtained your annual free one and have your confirmation or file number handy from this online purchase. Also, you can call each credit bureau

Credit Repair Tip #11: Know Your "Middle" Score

More and more these days, mortgage lenders are using third party credit reporting agencies that take all three of your credit reports and report the "middle score". For instance, if on TransUnion you have a 680, on Equifax a 720 and on Experian a 734, Equifax is your middle score.

The mortgage lenders will look at the middle score and determine your credit risk based on this number. 621 is cut off for "good" credit risk, everything below is "bad." It's definitely preferable to have a 700 or above - especially for home loans.

Credit Repair Tip #12: Know How to "Rapid Re-score" Your Credit

If you're applying for a loan through a loan broker, which many people are these days, the brokers have access to a service called Factual Data. For a fee per "trade line" (or per derogatory item), you can apply for a "Rapid Re-score" if you know some of your credit items are old.

For instance, an individual had a collection item from five years ago reappear on his Equifax credit report, and had a new $100 collection appear the week before he was applying for a new home loan (Murphy's law). The first collection agency was called and asked to fax a "deletion letter." The same was done with the other agency. Knowing that the first and second mortgage on a home had been paid off since it had just been sold, the Rapid Re-score service from Factual Data would be a good way to boost the credit score on all three bureaus within one week or less. The only disadvantage with Rapid Re-score is that you must ask your mortgage lender to start this process. If you change mortgage lenders, you won't be able to see the new score on the new lender's reports.

Credit Repair Tip # 13: High Balances on Unsecured Debt-Knock Them Down!

Remember that lenders can't tell how much you earn from your credit report. But they can tell whether you're "maxed out" on your credit cards. Being maxed out is a sign that your spending may be exceeding your income.

According to the credit scorers, this is a strong possible sign of future credit problems. You may have the best of intentions, but have a poor credit score because of your high credit card balances. Your credit card balances being near your credit limit may be the reason for as much as 35% of your low credit score.

If you have high credit card balances in combination with late payments or collections, look out! This is seen as a dangerous combination. See the way to knock down your credit card balances in Credit Repair Tips #14, 15 and 16.

Credit Repair Tip #14: Dispute Your High Balances

Balance information is often 60 to 180 days old, especially on automobile debt. For instance, let's suppose you've been paying your car payment faithfully for two out of three years. Maybe your car cost $5000 and you've paid your loan down to $2000. However, the credit bureaus are reporting that your loan balance is still $4000. Car companies often don't have up-to-date "software" that updates your credit information on time.

Since the loan balance data at the credit bureaus could be, as much as six months old, you may not be qualifying for the loans you deserve because of high balances. The remedy is to dispute with the three credit bureaus online, by mail with a dispute letter, or on the phone to update your loan balances on your credit reports. Even though the credit bureaus will tell you that this is a thirty-day process, many times things are updated in ten, two or even one day.

Credit Repair Tip #15: Call Your Creditors and Ask Them to Update Your Balance with the Credit Bureaus

Some of the more sophisticated creditors such as MBNA America Visa or American Express can quickly "update" your balances with the credit bureaus if you really need them to. They prefer to wait for the computer to update your balance every 30 days after your due date. But, if you call them and say you're applying for a home or car loan and need the better credit score, they should be able to report an updated balance to the credit bureaus within 24-48 hours.

Credit Repair Tip #16: Apply for a Credit Watch Service

Although there are things you can do to improve your credit score in 24 hours, it's better to belong to a credit watch service that watches all three bureaus for you and reports any change in your score to your e-mail.

For a total of $12.95 a month, this is a good value, as it can save you hundreds or thousands of dollars in loan fees, pre-payment penalties and interest that "bad risk" people have to pay for their loans. Apply for this service and have a better credit score, and better bottom line.

For example, Experian has a site called www.creditexpert.com with a product called Experian Credit Manager that features daily monitoring of your credit report with alerts in your email. Equifax has a product called Credit Watch with daily alerts available regarding changes on your credit report. TransUnion has a site called www.truecredit.com that offers weekly alerts regarding changes on your report.

Credit Repair Tip #17: Get deletion letters from Your Collection Agencies

About 30-50% of all collection agencies will generate a "deletion letter" to show that your collection item has been removed from their system. The reason you need this deletion letter is because the credit bureau may continue to show the collection item for seven years even if your collector's system no longer shows it. As part of your credit repair, you need that deletion letter.

Also, if one of the credit bureaus shows the collection and the other two don't, its possible that the other two will pick up the collection and report it. In other words, you want to mail or fax a deletion letter to all three credit bureaus to delete the item once and for all. Two of the three bureaus, TransUnion and Equifax will accept a faxed version of the deletion letter. This is all part of credit repair.

Experian wants a faxed or original letter with letterhead and a signature sent to their mailing or Fedex address.

Mailing Address:

Experian, 701 Experian Pkwy, Allen, TX 75013

Credit Repair Tip #18: Get Payoff Letters for Your Paid Off Accounts and Fax Them for Quickest Results

Sometimes you have paid off an account but it still shows on the credit report. For instance, a friend sold his house recently and his first and second mortgage were still showing when he applied for a new home purchase loan. Because he already had several credit cards, its best to show his mortgage loans as paid off to show as little debt as possible. He called the payoff departments for both his first and second mortgage and got payoff letters to prove those debts were paid. He then faxed these payoff letters to the credit bureaus that accept faxes, TransUnion and Equifax, and Fedexed the letters to Experian. Obtaining payoff letters is a good way to continue your credit repair.

Some have had relationships with “High Interest” finance companies for many years. Perhaps they have financed music equipment when they were young. However, I found out that having these “High Interest” Lenders on your credit report hurts your score! Many consumers are unaware of this and may not realize that they're walking around with a lower credit score because of this. These “High Interest” Lenders charge high interest rates and they may be seen as a "lender of last resort" by the credit scoring gurus. Always think carefully before taking a loan that looks like a last resort.

Credit Repair Tip #20: Consolidate your debt on a Higher Limit Card

Remember, it's not how much credit card debt you have, but how much credit card debt you have in comparison to your card limit. Its good if your balance is 50% or less of your credit card limit. If you have credit cards maxed out at $5000 each, and you get offered a $20,000 credit card, it might be better to transfer balances onto the $20,000 card. Just one note of caution: don't max this one out as well!

Credit Repair Tip #21: Have Three to five Lines of Credit

If you have a mortgage, a car loan, and three credit cards you have five lines of credit. Three to five is seen as ideal. More than that may be seen as excessive.

Credit Repair Tip #22: Homeowners are Preferred

When you're filling out a loan application it’s always seen as preferable if you're a homeowner. Homeowners are seen as more predictable since they move less often, and it's easy to find them because lenders know where they live.

Credit Repair Tip #23: Find out Which Credit Bureau Your Car Dealer Uses

One trick is to know which of your credit scores is the highest. For instance, if your Experian score is 680 and the others are lower, call different car dealers or auto finance companies until you find the one that uses Experian. You then use that dealer and get a better loan!

Credit Repair Tip #24: Pay before the Grace Period on Your Credit Cards

This trick is worth money in the bank. If your credit card balance is over 50%-75% of your credit card limits, your credit score will hurt to the tune of 50-80 points!

Having high credit card balances is a real killer. As part of your credit repair, it makes sense to pay down your balances, especially before you apply for credit. However, picture this: on your credit card payment due date (mine is the 18th), your credit card company automatically sends the balance information to your credit bureaus via computer. That means if you pay down your balance but after the due date, even if within the grace period, the balance doesn't show as lower for a whole month longer. Even if you "ride" the credit bureaus through your fax machine, it might take a week or more to update the balance - as long as 30 days. Pay before your due date (before the grace period) and you will have a better credit score. Period!! Now you’re getting the hang of credit repair.

Credit Repair Tip #25: Tough Creditor? Do a Credit Audit!!!

Under the Fair Credit Reporting Act you have the right to ask tough creditors for proof that you were late, didn't pay, etc. Write them a letter giving them 10 days to give you proof you were late, including all cancelled checks and backs of checks, etc. Tell them they must remove the derogatory item if they can't provide proof.

If they do not provide proof, write them another letter telling them they must delete the item. Make sure you send all letters with a mailing receipt. Then send a copy of your letters to the credit bureaus saying the creditors were not able or willing to prove you were late. For some people this works like a charm.

Credit Repair Tip #26: It's a Sue Happy country. Sue!

You can take an ornery creditor to small claims court, claiming monetary damages and injury for the item you believe is wrong. You take the creditor to court in your city, and if they haven't provided proof of your lateness, or if you feel you have another claim, you can invite them to small claims court in front of someone "older and wiser" that can decide the issue for you. The company may see this as a nuisance suit and usually chooses just to delete. As a sample, use dispute letter Creditor/Credit Bureau – 3rd Letter – Follow-up after 60 Days.

You can also hire a lawyer who specializes in the Fair Credit Reporting Act. There are some attorneys that will write letters and file suits for you. Since they tend to be picky about suits they want to take on, you might just take the creditor to court yourself in small claims. If the judge issues an order in your favor, make sure you ask for an injunction from reporting the negative item on your credit report in the future.

If you would like dispute letters written in powerful legal language to write to your creditors, you can request my E-book, "Credit Dispute Letters".

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