Credit Repair – More Than Disputing
Credit repair is the process of improving your credit scores by removing derogatory information from your credit history and optimizing several key factors which are used to calculate your credit scores in order to increase your overall credit rating.
Credit repair is not simply the process of disputing all derogatory accounts in your credit reports.
In fact, in some cases, disputing some accounts may actually lower your credit scores.
According to FICO, accounts active within the last 6 months impact your credit scores much more than accounts with their last activity from years past. In order of most impact to your credit scores to least impact on your credit scores, it goes, accounts active within the last 6 months, accounts active within the last 2 years, and accounts active within the last 10 years.
For example, if you dispute an old collection account which has not reported any activity in over 4 years, unless deleted from your credit report, the collection account will update the information in their trade-line and report a new “Date Last Reported” to your credit report. This account will now have a reporting date with very recent activity which may actually lower your credit scores.
Instead of disputing the collection account, it’s a far better idea to contact the collection agency directly and ask them to Validate the Debt which they are reporting in your credit reports, pursuant to the FDCPA (Fair Debt Collection Practices Act). If the collection agency fails to validate the debt, they will remove the account from all 3 of your credit reports. But, if they do happen to validate the debt, you won’t have to worry about them updating their activity in your credit report with the credit bureaus and lowering your credit scores.
The same thing applies if you are paying off an old account with no recent activity because once paid, the agency will have to contact the credit bureaus to update the balance and status of the account changing the date last reported. And instead of you having an old unpaid collection from 4 years ago, you will now have a paid collection reporting new activity as of this month.
If you’re going to pay off or dispute any accounts in your credit report, make sure that you focus on the accounts reporting recent activity and if you have old accounts reporting activity from years ago, try something like debt validation first before initiating any disputes or doing any settlements.
Ultimately, the goal of credit repair is not just the removal of all of your derogatory accounts, the goal is to increase your credit scores as high as possible.
Use every tool given to you by the FCRA, FDCPA, and FCBA laws to work on removing derogatory information from your credit reports and improving your credit scores, not just disputes.
And if you need assistance, CreditFirm.net is here to help.
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