Some of the most devastating credit repair mistakes
- Disputes of derogatory accounts that actually INCREASE scores
Often creditors DELETE instead of dealing with disputes of old paid accounts. It is usually NOT possible to have closed accounts re-reported. Even the deletion of a charge-off can lower FICO scores because sometimes the account history increases the scores by more points than are lost due to the charge-off.
Most people mistakenly think that it could not possibly be a big deal to have a paid $50 medical collection on the credit report. However, credit scoring software does NOT rate according to amount or type of collection. I have seen collections for as little as $5 and credit scores were destroyed as if it was for $5 million. Fortunately, many medical collections can be deleted because they are for deductibles not properly billed or otherwise disputed charges.
- Payment of collections, judgments or liens.
PAYING a collection (not reported as tradeline), judgment or lien will NOT increase FICO scores and you lose your rights under the Fair Debt Collection Practices Act once a collection is paid. While accounts may have to be settled in some situations, there are legitimate techniques (NOT frivolous disputes) to try to get deletion first.
- Submission of false or frivolous disputes as by credit repair outfits like Lexington Law, Bradley Ross Law, Credit Attorney, etc.
Several CreditFactors subscribers also provide credit repair services and I am hoping that the industry will become more professional. However, at this time, I am NOT aware of ANY credit repair firm actually reviewing the myFICO reports and analyzing the reporting and FICO score factors prior to sending out random frivolous disputes.
After receiving frivolous disputes, the credit bureaus can legally refuse future disputes of truly damaging incorrect data and it is very difficult to prevail in court when the credit bureaus can document that you lied in your disputes.
Most credit repair companies strive to identify you as frivolous disputer to the credit bureaus by using colored fonts and certain wording. Since most credit repairers charge a monthly fee, it is to their advantage to be able to send frivolous disputes as long as possible and that’s also why they only dispute a few items at a time.
- Reviewing credit scores OTHER than FICO scores and following the CRAs’, Fair Isaac’s and Suze Orman’s advice
Only the FICO scores are used to rate mortgages. The scores sold by the credit bureaus are often much higher and nothing but a way to get your money while at the same time keeping your FICO scores low. Many of these scores have no other purpose than to deceive consumers and they are NOT used by creditors.
I also documented that Suze Orman tailored her advice to lower FICO scores, to benefit creditors and collectors and to increase profits for credit bureaus and creditors by damaging your credit rating.
If the delinquent accounts were charged off or discharged through bankruptcy over 2 years ago and the report has no new late payments or other new derogatory data, the FICO scores should be at least 650. If they aren’t, analyze the myFICO reports and find out why.
Do your research and learn what and how to dispute BEFORE you dispute.
There is no “undo” button.