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Friday, February 13, 2009

How to Know if You Need a Credit Dispute Letter

By Kirk B. Mayors

What reasons would you have for writing a credit dispute letter? If you have received notice of poor credit you would write to dispute the credit report. And why did they decide you had bad credit? Well, assuming that you pay your bills on time, don't hold too many maxed out credit cards, are gainfully employed, and haven't had your car repossessed, then it must be a mistake.

Or, perhaps you're disputing a credit card billing error that led to a derogatory mark on your credit. Maybe you need to end bothersome phone calls from collection agencies who insist on pursuing you for expired or invalid debts. In general, a credit dispute letter is used to correct some kind of mistake that was made on a credit report; the credit reporting agencies are not free from error. You can even use a credit dispute letter as supporting documentation to negotiate lower monthly payments with your lenders.

Whatever reasons you may have for writing a credit dispute letter, you should be careful how you go about it. You want to take care not to anger the credit agency. If your letter is successful, you can restore credit far more quickly than you imagined. The thing to keep in mind is that if the information can't be verified, the agency is required to remove it.

Your letter should use a business-like tone, but it should be short, direct, and amiable. You don't need to include tons of personal details. Just stick to the facts, and send copies of the reports in question with the disputed items highlighted. Don't make any threats of legal action or hostility. If you are pleasant in your dealings with the agency, they are more likely to handle your claim quickly and with a satisfactory result. To get an idea of the type of letter you should write, you can look online for a credit repair sample letter that you can modify based on your own situation.

When you mail the letter, make sure it is registered or certified, and requires a signature card. That is proof that you handled it and in what time frame. Save copies of everything you do; originals, if you have them.

Something to watch for is to be very careful when you shop for big ticket items that require a credit card or loan. Do not give your name, address, and other information ? most especially your social security number ? until you are sure you will purchase the item. Otherwise, if you provide your information at multiple places, you might seriously hurt your credit with multiple inquiries for accounts that you never even open!

This is because whenever your credit report is pulled, your credit score is dinged to the tune of up to three points per inquiry! Now, if your credit score is a bit low, there are some strategies you can use to restore credit quickly. For one thing, make sure to bring any delinquent debts current. This will raise your credit score right away. You could even build a good payment history by charging something on a department store card, and paying it off in two payments.

Whatever else you may do, avoid being scammed by supposed credit repair companies. There are many of them online, and there are some less-than-honest attorneys too. Realize that credit agencies receive your information from all kinds of creditors, and there are no simple cures for bad credit.

But, if you feel a mistake has been made on your report, then you should write a credit dispute letter to either the lender, the credit reporting agency, or both. It's not hard to do, and it's the best way to ensure that your credit report contains accurate information.

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