What To Clear On Credit Report?
Hi all
I have a 2 questions that any input on would be greatly appreciated.
I know closing old credit card accounts is a bad thing concerning lowering your fico score. Though is there a point where you have too many old credit cards and lines of credit that just sit there doing nothing?
However, I have heard a few times now that getting things like old student loans removed is a good thing. This because it says "transfered to another lender". It has been paid long ago.
I have also heard of people calling up the 3 major credit agencies and successfully disputing items via the phone rather than go through the tedious process of snail mailing everything. Anyone have any experience in this?
Thanks for all replies in advance!
Kurtos
Get rid of anything with recent late pays.
Get rid of anything charged off.
If the student loans are I1 (paid/never late) and transferred to another lender, don't get rid of them. They're no problem.
Don't get rid of older cards. If they're still open, use them occasionally. Keep the history going.
You should review each entry on each report to determine whether there are any "negative" remarks. For example, a negative or derogatory remark can include the following: a statement that you were 30, 60, 90 or even 120 days late on a payment and the number of times you were late; a statement that the creditor "charged off" your account or sent it to a collections agency; or a statement that that your account was closed by the creditor. Also, if you notice a lot of "R9s" in your report, these are negative remarks because they indicate that your account was charged off or forwarded to collections.
If any of the entries are incorrect, or worse, are regarding accounts that you do not recognize, then you should write to each credit reporting bureau that reports a negative entry, and dispute such entry. You can state that the entry is wrong because you were never late, or that the account does not belong to you, or that the account had been paid off. Once the credit reporting bureaus receive your dispute letter, they are required by law to investigate your dispute. They must contact each creditor whose entry you dispute to determine the validity of your claim. This process generally takes about 30 days. The creditor either verifies the report or, if you are lucky, does not respond to the investigation. If the creditor does not respond or cannot provide documented proof that the entry is correct, then the credit reporting bureau must delete this entry from your report. If the creditor verifies the disputed entry, then the credit-reporting bureau will notify you.
If you still dispute the entry, you are then allowed to provide the credit-reporting bureau a statement of up to 100 words to explain your dispute. Your explanation will then be included in your credit report for future creditors to review and consider.
If you decide to settle or clear up some entries which have been verified, you should then contact the creditor directly and attempt to settle the account in exchange for a "neutral" entry, such as an entry that provides "settled, account balance is $0.00." Generally, a creditor is eager to settle a "charge off" account for as little as 50% of the original amount. However, there are occasions when it may be to your benefit to hire an attorney to help you settle your account with a stubborn creditor.
Finally, be wary of paying any companies out there who "guarantee" to clear up your credit report. For the most part, they are playing a numbers game with the credit reporting bureaus. In other words, they hope that the creditors do not respond to the bureaus' investigation, thereby forcing the bureaus to delete the disputed entries. Nothing, except death and taxes, is guaranteed in life, and you may just be throwing away your money instead of using it to settle your debts with the creditors.
Anything but I1, R1 (or zero),etc. is a negative. If you see a letter, the number you see after it should be zero or one or it's negative.
"5" is often worse than "9" because while 9's can be dead, done and gone, "5" looks like a current (and actionable) 120-day late, and is scored by FICO accordingly.