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Friday, February 13, 2009

Dispute Credit Reports

By Justin Hutto

Disputing negative marks on your credit report is the most effective method of improving a low credit score. A better payment history accounts for up to 35% of your score. Disputing negative marks helps because it will show a better payment history.

To dispute a mark you need to contact the bureaus and send a dispute letter. A letter must be sent to each credit bureau. Often upon receipt of your letter the bureau will respond with a letter requesting more information about the item.

This is a stall tactic the bureaus use. They have found it more cost effective to delay instead of actually investigating the dispute. It is common for people to give up at this point and continue to pay outrageous interest rates.

In time, the bureaus will investigate the mark only if another dispute letter is sent with the requested information. While investigating, the bureau will contact the lender to verify the disputed mark.

The mark must be removed from your credit report by the bureau if the lender cannot verify it. Lenders frequently do not want to spend money and time verifying an uncollectable debt. Therefore, for the best results, we suggest you wait until the lender has received a payment for the outstanding debt.

For instance, the lender has no more use for a charged off credit card account that is sold to a collection agency. As a result, the lender will not take the time to verify the account when they are contacted by the bureau.

You can create a dispute letter and dispute your credit yourself or you can hire a service to dispute it for you. It is much easier to eliminate a charge off once it has been sold rather than outstanding.

The benefit of a service is that it provides you with more options to remove a mark if it is confirmed. Services can ask for creditor direct interventions, debt confirmation, escalate dispute information requests, and in severe cases, an attorney can go to court and fight on your behalf.

Your credit score is a very important number, as it impacts your finances, place of employment, residence, and many more. Approximately 25% of Americans have an error on their report and is costing them money in higher interest rates.

In conclusion, you can remove negative items from your credit report and stop paying the high cost of bad credit. This is accomplished by disputing your credit yourself with a dispute letter or by hiring a service to do it for you.

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