Once you have gone through the initial process of disputing negative items on your credit and have obtained the results from the credit reporting agencies, you may have some remaining negative items that need to be addressed.
Deal with each negative element individually
It is very important that each questionable item is treated individually, except for erroneous personal data. If you try to get the credit reporting agency to fix several items at once, it will be easier for the agency to claim that your request is frivolous or irrelevant. If you are disputing multiple items, send each letter at a different time and each in a separate envelope.
The offices may try to intimidate you into believing that your application is frivolous or even illegal. But credit reporting agencies must assume that all disputes are in good faith, unless there is clear and convincing evidence that it is not. A general dispute (meaning all information is disputed) may be considered evidence that the dispute is frivolous, if you do not provide any allegations related to your specific file.
If you have evidence to support your claim, please submit it.
I do not recommend that you submit proof of a disputed item during the initial dispute process. This is because the dispute will be entered into the credit bureau system and an electronic request will be sent to the creditor to investigate the item in question. If it is not corrected once the creditor responds, that is when you must provide written documentation to support your claim.
What if you know they’re wrong, but can’t prove it?
If you don’t have proof, but you are absolutely sure where you stand on the matter, ask the bureau to provide proof from the creditor. As long as you are not abusing the service, they will work with the creditor to provide you with that proof. If that doesn’t give you the results you’re looking for, you can add a Statement of Dispute to that account or to your credit report in general.
Accounts with late payments:
If you have remaining accounts with legitimate late payments, then calling your creditor and requesting a courtesy removal of the payments could yield results. If you’ve been a good customer in the past, they may be doing you a favor and agreeing to remove the late payment from your credit report. It’s definitely worth a try.
Account collection:
Paying off collection agencies or other debts from more than two years ago won’t help you much.
This one is pretty weird because it seems like the right thing to do, and in fact, paying off your current debt can definitely help improve your credit score.
However, credit scoring systems look at the last date of activity on your account, and if the collection (write-off is what it’s often called) is more than 2 years old, it starts to lose its negative power.
When you make that partial or full payment, guess what happens?
The date of the last activity clock resets to the day you pay part or all of the payoff, sending your credit score plummeting!
In this case, it’s better to pay nothing or negotiate a one-time settlement with the collection agency in exchange for removing all derogatory information.
If you choose to pay off these debts, you basically have three options:
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 will play you is if you have the money to pay as soon as you trade the reduced amount. Most collection account companies can/will take as little as half of the amount you owe and call it a “liquidation.” This is not always the case, but it is true most of the time. Start small and, if necessary, work your way up in small increments at a time until you reach an agreement you can both live with.
(If you call closer to the end of the month, they will be more eager to settle with you, because collection agents work on monthly installments of what they can collect at the end of each month.)
2. If you don’t have the money to pay right away, 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, once you’ve paid it off, you will no longer have a balance on your credit report, which will help your overall score.**
3. You can leave it alone and it will be automatically deleted seven years after the original delinquency date of the original account. There are two things to keep in mind if you decide to do this. First, the balance carried by this account reflects negatively on your score, and to a large extent during the first two years. After that, it has less of an impact, but it still has an impact. Two, if the account has a large enough balance, the company may choose to go to court and sue you to get a judgment against you. If they do, it also becomes a public record item and has an even worse impact on your score.
**Note: If you choose 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 the credit bureaus don’t update to say you paid the bill. I’ve had clients call the company back after the fact, only to find out that the person who did the fix no longer works there and no one has any idea what you’re talking about.
By making sure you receive this letter in advance, you can use it, along with proof of your payment (cashier’s check, money order, etc.) to send to the offices as proof that you paid them according to the arrangements you both agreed to. .**
Judgments and Fiscal Links:
Both pending judgments and collection accounts continue to add interest for as long as you have a balance, and it’s not cheap, so be sure to keep that in mind when making your decision about what to do with it.
If you own a home, a judgment will be attached to the county you live in, so if you refinance or sell during the seven-year period listed on your report, you’ll still have to pay it off and it will be much more then. Judgment creditors aren’t as eager to play “Let’s make a deal” when they know you’re refinancing or selling your home, because they know they’ll get paid no matter what. Be sure to keep this in mind and try to resolve the situation before you find yourself in the position of having no choice but to pay the full amount.
If you have judgments or tax liens remaining on your credit report when it’s returned to you by the credit bureaus after you’ve tried to dispute as much as you can, then all you can do is negotiate payments or payment terms on these items, hopefully in a reduced amount.
o For judgments, you will need to contact the attorney who originally filed the judgment and see if they will accept a lesser amount. (Your contact information will appear in the upper left corner of the original judgment documentation.) Again, be prepared to send them money right away if you’re going to try this approach. No one is going to play “Let’s make a deal” without knowing that they have the financial resources to pay the negotiated amount immediately. Don’t forget to make sure you get it in writing before you send them a penny.
o Once the lawyer has received your payment, they must 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 where the judgment was entered. This Satisfaction will appear on your credit to offset the original concept. This is the ONLY way to offset it on your credit report, so be sure to follow this important step.
o Regarding tax liens, you will need to contact the appropriate tax authority and see if they are willing to negotiate a reduced settlement, or at least set up payment arrangements with you. Tax liens also continue to add interest and are not cheap, so you really need to take care of these as soon as possible.
o Once each bond is paid, the tax authority will issue you a Bond Release, for you to record to offset the original bond on your credit. After that, it’s just a waiting game for them to drop their report. They will have less of an impact as time goes on, and a zero balance always looks better than an outstanding balance.
Note: ALWAYS keep copies of Judgment Enforcement and Link Release. These are the only tests that matter, every time they come into question. This is very important!
Summary – Credit Myth to Remember
“Negative items must legally remain 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 delete any information they want, whenever they want. There is nothing legally preventing these companies from removing inaccurate information at any time.
They have to remove it after 7 years, but it could possibly be sooner with your intervention, so let’s get to work!
