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- Lesson 4 – Basic Credit Repair StrategiesVIDEO · 16 MIN·PREREQUISITE
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Lesson 4 – Text
Basic Credit Repair Strategies
(Text to Read)
Now that you have a basic understanding of the laws to use, let’s talk about how to use them! This lesson will cover all the basics of how to write dispute letters. We will cover some of the basic dispute strategies and most importantly, I’ll give you a solid understanding of my top 10 favorite letters and when to use them. You can download and keep my top 10 favorite letters on the bottom of this page!
Let’s talk about the basic strategies for repairing credit.
The first strategy is generally the easiest, sending letters directly to the credit bureaus for a few reasons:
1. You can dispute as many items as you like, but I highly recommend you don’t overdo it. You will usually get a better response by only disputing up to 5 items maximum.
2. The credit bureaus are required to contact the furnishers that reported the information for you, so you do not need to contact the furnishers individually – it’s all done for you. 3. After the bureaus contact the furnishers, they only have 30 days to respond. If they don’t respond in time, the items you disputed automatically get deleted.
In the next lesson, I will explain all of this in much greater detail. For now, just know that contacting the credit bureaus should be your first line of attack.
The next strategy is disputing directly with your furnishers, again “furnisher” means the companies (creditors and debt collection agencies) that reported the information to the credit bureaus in the first place. You have the right to dispute with these companies and they are required to investigate and report any changes to the credit bureaus.
This can be a long drawn out process for a few reasons:
1. Typically you can only dispute one item at a time unless you have more than one account with the same creditor.
2. Creditors and collection agencies are notorious for completely ignoring disputes and holding them accountable is generally more difficult with furnishers, especially some of the smaller rogue agencies.
I’ll get into the nuts and bolts of furnisher disputes in the next lesson.
Disputing with the bureaus and furnishers are the two most common and simple strategies when repairing credit. This is a basic disputing course, so I’m not going into details about the other strategies at this time but I’d like to at least give you an idea of what else is possible to help you gain an understanding of other strategies that also work wonders.
1. Creditor Interventions are also sometimes called a “goodwill intervention”. The letter works by sending it to the creditor asking them very nicely to remove a late payment. This normally works best on OPEN accounts that you have an excellent payment history and simply missed one payment. Even though they are not required to do so, many companies will respond positively and remove the late payment.
2. If you have completely exhausted your efforts in disputing a collection account, and you have little hope it will be removed, you always have the option of attempting to settle the stubborn debt. To do this, you need to strike a deal with the creditor by negotiating. Usually this is done over the phone or by mail, either way you want to make sure you have an agreement in writing before paying. 3. Once you have exhausted your efforts with both the credit bureaus and furnishers, and mistakes are still appearing on your credit report, you may want to consider filing a lawsuit. If the errors are not corrected, it may be time to get the help of a consumer protection lawyer. The Fair Credit Reporting Act (FCRA) and other laws we spoke about were put in place to help protect you. There are many consumer protection attorneys that will go to work for you on a contingency basis. You don’t pay them unless they win and when they do, you get paid and get the errors removed permanently.
One often overlooked strategy to credit repair is to build positive credit, which in turn reduces the impact of any negative credit on your reports. In lesson one, I went over a ton of ways to build and optimize your credit scores – put all of that into action so you can improve your credit from every angle possible.
The Anatomy of a Basic Dispute LetterCredit repair is all about sending letters. I’d like for you to really understand how dispute letters are built and what to include.
The good news is, Credit Repair Cloud has an entire library of the most effective dispute letters that have been time tested and used literally millions of times over. Still, I’d like you to have a deeper understanding in case you want to do it on your own without software. There are several things you want to insure are included in every dispute letter you send.
1 – The Heading – Include Identifying Information – Make sure your letter contains the accurate spelling of your first, middle and last name. You should also include your current home address and the last 4 your social security number. No need to include your full social, only the last 4 digits are necessary. 2 – The Inside Address – Include the Recipient’s Identifying Information – Depending on who your sending it to, include the recipient name and address. This is usually one of the 3 credit bureaus or a creditor or debt collector.
3 – Always include a Subject Line – This is a quick blurb that summarizes the contents of the letter. For example: “Validation requested for account that does not belong to me.”
4 – The Body of the Letter – This is the longest part of a letter and is usually divided into three subcategories: introduction, main content and summary. The introductory paragraph states the purpose of the letter. The main content conveys all necessary detailed information and has no set length requirements. The last paragraph summarizes the information provided, restates the letter intent and offers instructions regarding follow-up correspondence.5 – Furnisher Name(s) & Account Number(s) – Online credit reports will never show the full account number, so just add whatever is listed on the credit report, even if it’s mostly X’s and a few numbers. I’d like to point out that if you are mailing this letter to a credit bureau, the credit bureau will contact the furnisher to conduct the investigation – so getting this information is critical to the success of the letter.
6 – The Reason – Each item you dispute needs a REASON to remove each item. Credit Repair Cloud software makes this remarkably easy. You simply choose the reason from a drop-down list.
Some of the most common reasons:
- The information is inaccurate, please remove it!
- The following information is outdated and I want it removed from my report.
- The following information is not mine.
It’s usually a sentence or two explaining why you want it changed. Pretty easy right?
7 – Instructions – This is where you need to explain what you want to happen. You need to place a sentence or two to clearly describe the outcome you want as an instruction to the recipient.
Some Common Instructions Include:
- Please correct or update the information on my credit report.
- Please remove this misleading information from my credit.
- Please investigate and remove this inaccurate information.
8 – Sign it! – Don’t forget to sign the letter! Our software will automatically insert your clients signature into the letter digitally.
9 – Identification – Also, always Include Identification for Round 1 Credit Bureau Disputes – The credit bureaus require you to supply supporting documentation verifying your identity and your address. This is done by including a government issued photo ID (like a driver’s license or passport) plus proof of address (like a utility bill, insurance statements, bank statement, etc) Again, once your establish identity and address verification, you do not need to send the identification with the following letters, only Round 1, and only when disputing with the credit bureaus. That’s it!
Now don’t forget, we are going to be using my top 10 favorite letters that we previously discussed during this important lesson. You should have them printed out by now to help you follow along!
Top 10 Most Effective Dispute Letters I’m going to introduce you to my top 10 favorite dispute letters.
Credit Repair Cloud has over 100 letters for every possible situation, however; this is a “Beginners Course” so I have chosen 10 of my favorite and most effective dispute letters and have outlined how to use them. If you learn how to use these 10 simple letters effectively, you will discover the fundamental building blocks of credit repair and be on your way to becoming an expert.
#1 – Round 1 Letter (Dispute Credit Report Items)
The “Round 1 Letter (Dispute Credit Report Items)” should always be the first letter you send, and it should always be sent to the credit bureaus. Why? As previously discussed, you can dispute as many items as you like, the bureaus will contact each furnisher for you and if they don’t respond within 30 days, it’s an automatic deletion.
#2 – Bureau No Response Letter
The title of this letter also gives away it’s meaning – when you send a letter to a credit bureau and they do not respond, the “Bureau No Response” letter is the letter to send! Why? The credit bureaus are required under federal law to conduct an investigation and respond with the results of the investigation within 30 day of receiving your request. Ignoring the request is unacceptable and unfortunately, you may need to remind them more than once to comply.
#3 – Bureau Re-investigation Letter
So you’ve already disputed items with a credit bureau at least once or twice and didn’t get the response you wanted. The “Bureau Re-investigation” letter is a good way to let the credit bureau know you are not giving up! It’s amazing to me how much a little bit of patience and persistence can yield results and this letter is exactly that – persistent! So, when they say no – what do you do? You ask again and again and again. The squeaky wheel gets the grease!
#4 – Bureau Warning Letter
When you contact a credit bureau and either receive a bad response, or no response at all – it may be time to fire a warning shot. The credit bureaus will all too often play games by responding inappropriately. They may accuse you of utilizing a credit repair company – which by the way is entirely up to you and 100% legal. In some cases they may simply deem your request frivolous or ignore it all together. When this happens, you must remain persistent and not take it personally; however, you should absolutely fight back. One of the best ways to do this is with a well crafted “Bureau Warning” letter. In the letter, you remind the credit bureau of your rights as a consumer, state the facts, include previous correspondence and/or any proof you may have – and most importantly, make it crystal clear that you mean business.
NOTE: All the letters I discussed so far were all geared towards the credit bureaus. Those 4 letters are really all you need for “basic” credit repair with the bureaus.
Let’s switch gears, the rest of my Top 10 letters are specifically for sending to furnishers. Again, furnishers are the companies that reported the information to the credit bureaus. They are typically creditors or debt collectors. #5 – Furnisher Dispute Letter
The “Furnisher Dispute” letter is virtually the same letter as the credit bureau dispute letter, the only difference is a slight change in the wording. You are using federal law to demand either deletion or correction to information that the creditor or debt collector reported about you to the credit bureau.
#6 – Furnisher No Response Letter
The “Furnisher No Response” letter template is virtually identical to the one you send the credit bureau, only with some slight wordsmithing. You are following up on a previous letter that was ignored.
#7 – Furnisher Re-investigation Letter
The “Furnisher Re-investigation” Letter is also very much like the credit bureau re-investigation letter. The name gives it away! Your asking the furnisher for another investigation!
#8 – Furnisher Warning Letter
The “Furnisher Warning” letter is very very similar to the credit bureau warning. There are slight changes to the content that make it more suitable to send to a furnisher. When they ignore you or don’t comply with the laws, this letter is sending a clear warning that you are not taking no for an answer.
#9 – Validation Letter If you’re facing an aggressive debt collector – this “Validation” letter can pause collection efforts and may deter debt collectors who don’t have sufficient information. If the debt is expired, you can include a sentence or two explaining that and it may not only stop collection activity but could possibly get it deleted from your credit report. Also, if you intend on paying the debt, you might want more information to verify you’re paying the right collector for the right debt. If the debt is nearing its statute of limitations, you may be better off ignoring debt collection notices than drawing more attention to yourself with a validation letter so don’t forget to check the chart I gave you in the previous lesson.
#10 – Estoppel By Silence Letter
The “Estoppel By Silence” letter is used when a debt collector ignores your request for validation (This is the last letter we just discussed) So, basically if you give the debt collector the opportunity to speak up and validation the debt, they fail to do so and their silence must mean that they agree with you. So, it’s always good to send this Estoppel Letter certified mail and include your previous validation demand letter. It can stop a debt collector dead in their tracks and sometimes result in a deletion from your credit report!
There you have it, those are my favorites for basic dispute strategies.
In the final lessons, I will show you how to use them! So, here we are again! Make a point to read all the text in this page, then complete the quiz, are you ready….. Get set,,….. Go!!!
End of Lesson 4
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