Repair Your Credit By Disputing

Reader and blogger DDL sends in a story about a “friend named Max” and his successful credit repair strategy. Max raised his credit score 100 points by employing the following technique:

Then, one day, Max read the provisions of the Fair Credit in Reporting Act (FCRA). The FCRA (in so many words) dictates that every person has the right to dispute the accuracy or validity of any item on their credit report with the three credit reporting bureaus (Equifax, Experian, and Transunion). From the date that each bureau receives notice of the dispute, the bureau has 30 days to investigate the dispute. If, at the conclusion of 30 days, if the bureau cannot verify the accuracy of the information in that person’s credit report, or the investigation just doesn’t get completed in time, the offending item is automatically deleted. Gone. Done. Case closed.

Max started his journey with a credit score in the low 500s, and now, in a matter of months, it had crested above 600. Eventually, and through great discipline, Max managed to eliminate every negative item on his credit report, simply by asking for proof that they belonged there in the first place.

As a result, Max’s credit score improved to the point where he was able to buy a new car and move into his first house. Before losing contact with Max, I could tell that he had learned from the foolish mistakes of his youth and appreciated the opportunity to reboot his credit history.

Well, what do you know? Apparently no matter how large a scary beetle on your credit is, you can squash it. Well. You can try..—MEGHANN MARCO

How to Lawfully Reset Your Credit History [Make Your Nut]
(Photo: metavariable)

Comments

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  1. evagation says:

    Thanks so much for the information. I knew that anybody is allowed to dispute an item on their credit report, but I did not realize that the bureau must then verify the disputed entry. I was under the impression that your dispute was simply “filed” with your credit report and that was the extent of the matter.

    Good to know that’s not always the case.

  2. rbb says:

    Playing devil’s advocate – is it fair to dispute legitimate items on the hope that they are removed on a technicality (i.e., hoping they miss a 30 day deadline)?

    Just how many of the items that Max disputed were legit? If so, would he have gotten the loans if they were left there?

  3. heartcxre says:

    Thanks so much for the information. I’ve got some credit issues at age 20, supporting only myself and I now have some newfound hope because of this.

    Now for another question: If you dispute an item and they are able to prove it legit, would this end up hurting the credit score further?

  4. jblake1 says:

    Perhaps Max should be a good consumer and pay his bills or file bankruptcy if he can’t. Gaming the system doesn’t help other consumers.

  5. Falconfire says:

    is it fair to dispute legitimate items on the hope that they are removed on a technicality (i.e., hoping they miss a 30 day deadline)

    Odds are unless its a little credit agency or bank it will never make it that far. If you have deliquency due to big bank cards like say a BoA Visa or Discover Card, they will deny your claim within 3-4 days.

    But it goes without saying, if they cant take the time to prove to the credit agency that the black mark is rightfully there, then you shouldnt have it there in the first place fucking up your credit.

  6. OrtizDupri says:

    Perhaps Max should be a good consumer and pay his bills or file bankruptcy if he can’t. Gaming the system doesn’t help other consumers.

    I have two “late” charges on my credit report, both of which are due to the company/agency charging me the money. I was unable to contact both in regards to repayment (and apparently they didn’t even attempt to contact me), until suddenly, a “late payment” charge shows up on the report. Irritating at best.

    So now I plan on disputing those two items – being an honest person, I don’t plan on disputing anything I really owe or are late on, but as far as shady businesses that have their names on my credit report, I’m all over it.

  7. drrew says:

    Just wanted to say, if the information shouldn’t have been there, bravo, he should have it removed.

    If they were legitimate entries, he’s screwing the rest of us who actually pay our bills on-time and who pay higher fees and costs due to deadbeat borrowers.

    After reading the entry….he’s simply screwing the rest of us. The credit bureau dispute process is one of the few consumer protections out there in relation to your credit report. Advocating that you cheat the system doesn’t help anyone because if the dispute fraud becomes widespread enough, they’ll simply no longer allow disputes at all.

  8. LAGirl says:

    when i decided to buy a house in 2005, i pulled my credit reports for review. i was SHOCKED at the number of mistakes on all three. each report had different errors.

    for example, my student loans were in deferment status for a short period in ’99/’00. this was before i consolidated them (@ 4%), so they would show up as 6 separate loans (for each semester a loan was taken out). i discovered that each loan was showing several late payments during the deferment period. this was obviously an error, since i was NOT making any payments at that time. this meant 6 accounts with several late payments! my credit was taking quite a hit.

    i wrote each credit bureau a very clear, detailed letter, carefully explaining the mistake, and asked that they remove these late payments. what sort of reply did i get? a form letter. a form letter that didn’t address anything in my letter. it only said that they had confirmed the accounts were mine, and legit. WTF???!!

    all that negative info should be gone by now, since it’s been 7 years. as a matter of fact, i need to pull my credit reports and see if that’s happened.

  9. LAGirl says:

    p.s. that bug picture is creeping me out!!

  10. jblake1 says:

    LAGirl writes:
    all that negative info should be gone by now, since it’s been 7 years. as a matter of fact, i need to pull my credit reports and see if that’s happened.

    sounds like you’re really on top of things like managing your credit and paying your mortgage. 7 years later.

  11. EnderVR46 says:

    I had some bad stuff on my credit from when I was a minor (wasn’t mine) added to my files. When I applied for credit at 18 I found them and started a fight that lasted 3 years. The file was from a best buy credit card that started when I was 15. I’d send in what was required and they’d send back a form letter as described by LAGirl above.

    Finally I sat down and read through the FCRA and contacted Best Buy. They told me to contact the company that bought the bad debt as they no longer had the file. I did and finally convinced them I did not have a credit card at 15 so they gave me a letter that proved it was not my debt.

    I gave the letter to Best Buy and the big three reporting companies and after a few weeks I was clean.

    They also had my birth year and a few other small items wrong. I guess you can’t rely on a data entry clerk/temp to get it right every time so watch your report. I now have a sub. to TrueCredit and check my reports and score on a weekly/monthly basis.

  12. thrillhouse says:

    While its not uncommon to have errors on your credit report – many are just dumb clerical errors – I can’t say I would advocate disputing legit black marks for the sake of repairing your credit score – especially if its done dishonestly.

    If they were erroneous, then by all means, get them cleared up. If they were correctly reported delinquencies, then maybe he shouldn’t be so anxious to get into more debt, and just take his lumps.

  13. The writer seems to imply that you could just dispute everything to see if the companies respond in time. There is a major drawback to this line of thinking. If you dispute an item and it is found to be legitmate, the seven year removal clock is reset from the date it is confirmed. This can be a big mistake if you are only a few months away from an item being 7 years old.

  14. humphrmi says:

    A lot of companies in the 80′s and 90′s charged money to do this for you – basically challenging every neg entry in your credit report and hoping that some percentage get missed, raising your credit score.

    I thought I had heard that some new Fed law meant to shut these services down now allow credit reporting agencies to dismiss outright all of your claims if it appears that you are doing this.

  15. exilio says:

    Whoever deemed it was fair for a ding on your credit to sit there for years? Who gets to decide what’s fair? Someone is actually going to defend the credit agencies? The same people that charge you extra interest if you are less likely to be able to afford something? The same people that insidiously raise your APR because you applied for a competing card? The same people that give you a ridiculously low monthly payment so they can squeeze every bit of interest out of you they can?

    These are the righteous people you are defending? If this guy wants to “game” the system, I say go for it, because the system “gamed” him and millions of others first.

  16. Apeweek says:

    I agree, game away. In fact, file your disputes on Dec 1st, so the 30-day window expires over the holidays.

  17. MikeWas says:

    “If you dispute an item and it is found to be legitmate, the seven year removal clock is reset from the date it is confirmed. “


    This is wrong, wrong, wrong. Check the FTC Opinion letters: http://www.ftc.gov/os/statutes/fcra/

    The seven years begins from the date of first delinquency, and disputes do not change that.