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How To Turn Late Payment Marks Into A Positive Rating
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How To Turn Late Payment Marks Into A Positive Credit Rating
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Credit Repair
How do you turn late payment marks into a positive credit rating?
Without the creditor's cooperation, negative entries cannot be deleted if the entries are accurate and the creditor cooperates with the bureau's request for verification. At that point, your goal is to persuade the creditor to either tone down or entirely delete the remarks on your credit report. Later, we will deal with the bad debts that you still owe and where you must be even more persuasive with your creditors. For now, we only want to turn those late payment marks into positive credit ratings. To do so, follow these simple steps:
1. Explain the problem in writing
Write to the creditor explaining your version of how the problem arose. Be specific. Submit details and full documentation. Appeal to the creditor's sense of goodwill. Whatever the reason for the credit problems, remind the creditor that you eventually paid. Appeal to the creditor and ask him/her to either remove the bad marks now that the account is settled, or at least put in a statement that the account is paid.
Each letter you send should be consistent with the others so if the creditor's new comments do appear on your credit file they will appear reasonable and consistent. Forget weak excuses for poor bill-paying habits. Use strong, understandable reasons. Send the letter by certified mail, return receipt requested.
If the creditor won't back down, you may still question the accuracy or completeness of the entry the creditor has filed against you. It is your right to add your version of the situation to your credit file. Your comments as to why the bill was not paid on time must be submitted under any credit request. Your comments may greatly reduce the damage of a particular entry.
You may not want to comment on any one particular entry, but instead have your credit record reflect reasons for generally poor credit. For example, if you have several negative entries, was the cause a layoff from work, divorce, personal or family illness, or IRS problems?
These unfortunate situations can happen to anyone and affect an otherwise excellent credit history. Advise credit inquirers if there was one specific event that changed your good credit. Refer to your prior on-time payment history. Convince creditors that these problems are not likely to persist.
2. Give the creditor 30 days to change your credit report
Creditors can remove negative marks. Give the creditor about 30 days to respond to your letter. Then, order another credit report to check if it has been changed.
3. Wait for a reply
Wait the estimated time established during your first effort to initially persuade the bureau to remove the negative marks. The bureau should reply within a few weeks with a new copy of your credit report.
4. Pick up the phone
If letters prove ineffective, try the telephone, which is a more personal way to interact with the creditor.
5. Don't give up
The initial call may have no affect. Don't be timid or give up. Keep trying. Talk to a different person if you feel the previous contact was not helpful. Companies often have many people working in customer relations departments and each person can react differently to your request.
Once a creditor verbally agrees to change your credit status, follow up the phone conversation with a letter confirming that agreement. Have the creditor sign the letter and return it to you. The letter is an important tool. If the creditor forgets or later refuses to change your status, you can then send the letter to the credit bureau.
How do you turn bad current debts into a positive credit rating?
Approach your creditors and negotiate repayment plans that earnestly demonstrate your ability to make regular payments. In response, your positive credit rating can be restored. Here's the strategy:
* Collection Agency Accounts - Deal with the creditor
When you deal with the creditor you usually have more flexibility to negotiate time or amount of payment. A collection agency receives a percentage of what they collect from you so they try to collect as much as they can. The creditor, on the other hand, may not expect full payment. And your future business may also be important. However, be aware that creditors can refuse to deal with customers after an account has been turned over to an attorney or collection agency.
The collection agency is usually more difficult to negotiate with. If you cannot avoid negotiating with the collection agency, the following suggestions for dealing with creditors can also be used for effectively dealing with the collection agency.
* Make an offer they can't refuse.
Suggest a payment schedule in exchange for a corrected credit entry. Or, agree to pay what you owe in 10-monthly installments if the creditor agrees to improve your credit rating. Be direct. Be specific. You could suggest that after a certain number of on-time payments, your negative rating will be raised to a non-rating, and then after several more timely payments, the non-rating will be lifted to a positive rating.
* Maintain an open account.
Ask the creditor to keep the account open while fulfilling your payment agreement. You are more persuasive if you offer to fully pay the debt with interest or an added service charge. Be certain that whatever you promise is within your budget so you can keep your word.
* Send a letter
State your verbal agreement in writing. Follow up with a certified (return receipt) letter to the creditor. You may want an attorney to review the agreement. Once the creditor signs and returns the agreement to you, it can become part of your credit record.
* Follow through on your promise
When you have a written agreement, you need only follow through and make the payments for your credit rating to be restored. Inform your creditor before you miss any payments, if your ability to pay should be threatened by an unexpected setback. Explore mutually acceptable ways to solve your temporary problem.
* Check your credit report
Verify that the creditor has made the promised changes, once the payment plan has been completed. Request your update after a reasonable time. If changes have not been made, remind the creditor of the agreement. If the creditor still refuses to make the agreed changes, you can then dispute the information on your credit report using the creditor's agreement to support the change.
How do you put negative credit history in a positive light?
You can't always erase negative credit information from a credit report. You can file a statement explaining the situation leading to your bad credit. Send the credit bureau a consumer statement of 100 words or less, which is then included in your credit report and sent to any prospective creditor. A consumer statement gives other creditors your side of the story and you can greatly mitigate the damage from negative credit information.
A consumer statement can considerably soften an entry that you filed Chapter 13 bankruptcy, when you explain that you eventually paid your creditors 100 percent of what you owed. Or, a rash of late-payments may be explained by documenting an illness that prevented you from working. This becomes even less a credit problem if your consumer statement further points out that you have paid on time before and after the event.
The credit bureau should publish the entire statement. Some bureaus illegally shorten statements that are less than 100 words. A longer consumer statement can be submitted, but the credit bureau can then reduce the statement to I00 words. However, it must then help you summarize the statement within the 100-word limit.
Demand that the statement be incorporated as part of your credit report, and become attached to it, and not just "in your file". Creditors will only consider the statement if it is on the report they read. Refuse to select a "prewritten" statement. You have a legal right to draft your own personal consumer statement.
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