THE BLOG

4 Credit Fixes That Actually Work (That Nobody Uses)

02/17/2015 12:07 pm ET | Updated Dec 30, 2015

It can be frustrating trying to correct your credit report. You can do everything by the book and still come up short. As a result, many consumers just give up.

I can understand the frustration but it's usually an expensive mistake to throw in the towel. Government studies show that 1 in 5 credit reports contain material errors. If your credit report has mistaken, don't become just another statistic and don't stop fighting. Here are four unconventional tactics you can use to stick it to the credit man and get the results you want.

1. Write Original Dispute Letters

The internet is full of template credit dispute letters that are free to download and easy to use. If you go this route you will save time and money. The only problem is you probably won't get anywhere with the credit bureaucrats.

That's because credit bureaus and creditors get thousands of letters every day. Most of these organizations use scanning software which identifies template complaints and send a stock response letter without much human consideration.

A better idea is to write your own dispute letter in your own words. This increases the likelihood that a live person will actually review your claim and consider it. By all means get an idea of what to say by reviewing sample letters but always put it in your own words.

Hint: Although some creditors and credit bureaus allow you to dispute credit problems over the phone or via the internet but don't fall for it. Unless you put your claim in writing you lose many of the protections offered by consumer protection laws.

2. Don't Follow The Suggested Path

Just about everything you read on credit repair tells you to first contact the credit bureau. They recommend you go to the creditor only after that fails. This advice is hogwash. It's also the reason why people get frustrated with the credit repair process and give up. It's very easy to go round and round with the credit bureau and get caught in a vicious loop.

Don't fall for that trap. Its fine to contact the credit bureau of course but you should also go after the creditor who reported the negative item in the first place. Remember, they have to prove the information they supplied to the bureau is accurate, verifiable and complete. Again, they have the burden of proof and they have to send you a copy of their proof. If they can't come up with the goods, they have to instruct the bureau to remove the negative information.

3. Use The Law

The only reason the credit bureaus and creditors respond to disputes is because they have to under the law. It's in your best interest to understand the basics of these laws and reference them when you write your dispute letters to both the credit bureaus and the creditors. Fortunately, you don't have to go to law school to leverage these rules.

The most important law to understand when it comes to consumer credit protection is the Fair Credit Reporting Act. This law governs how information about you is gathered, shared and used. Among other things, this law mandates how negative items are removed from your history and how credit bureaus are to behave.

The next law to reference is the Fair Credit Billing Act. This spells out what creditors can and cannot bill you for and how they are supposed to bill you.

Finally, there is the Fair Debt Collection Practices Act. If you fall prey to a collection agency, this law can help you get them off your back in a hurry.

Again, you don't have to be a lawyer to get some fire power from these laws. Once creditors and credit bureaus see your references to these laws in your letters, they'll know they are dealing with someone who means business. That might just be enough to get them to play ball with you.

4. Sue the Creditor in Small Claims Court

If a creditor won't clean up an error that they reported, you can almost always take them to small claims court to force them to get off their duff and do the right thing.

The nice thing about this move is that lawyers aren't usually allowed in small claims court. That means you've got more of an equal playing field. Also, suing in small claims is easy to do and very inexpensive for you. But it's expensive for the creditor and a pain in their back side. As a result, once you serve papers, the creditor might just stop fighting and clean up their error.

The trick about suing creditors in small claims court is that you have to make sure to fill out the court paperwork correctly and you have to get your claim to the right people. And you have to be on top of the follow up requirements and actually follow through.

There is a lot at stake when it comes to cleaning up mistakes others have made on your credit file. The credit bureaus and reporting creditors may seem like formidable adversaries. But use the law and a little elbow grease. If you do, you'll have a far better result in most cases.

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