Tuesday, May 21, 2013

Why it is Hard to Remove Collection Accounts

Why is it so hard to remove collection accounts?
You send in a dispute letter to the three national credit bureaus because you don’t recognize the collection account on your credit report. Almost 30 days later you receive an updated report from each bureau stating that the account is, “verified as belonging to you”, or that, “This item has been reported correctly”. You have no more information than you did before. You’re confused. At this point some people give up; some send another dispute thinking the results will be different. If all this happens, you are among the lucky ones.

The credit bureaus are not on your side.
The bureaus have a vested interest in not having your credit report changed or your credit scores improved. Their real clients, the ones that give them the vast amount of profit, are their subscribers – your creditors. They continuously purchase tons of your personal credit information to make decisions who to market to and who to watch or cut off.

Stalling Tactics
This is why they send form letters stating things like, “We’re sorry we are unable to honor your request – we need more proof of your address (or, the proof you sent is not legible, or some such nonsense). We’ve sent clear copies that are enlarged (for the reading impaired -LOL) and still get this letter. Now and then they just don’t reply hoping you will forget about them. If you continue to pursue them you have lost at least another 45 days! It is all done to get you to give up and build your frustration so you won’t ever try again. Besides, who has the time?  

The credit bureaus don’t always do their jobs.
One day, a client came in with an order from a judge vacating a Judgment in 2008. You would think all you had to do was send the bureaus a letter with the document and, presto, the judgment would be removed. After the bureaus coming back TWICE that the account was accurate and verified, I wrote a strongly worded and threatening custom letter that finally got it removed. How they verified a judgment that no long existed is disturbing to say the least.

The bureaus are not the only ones playing games.
I have an acquaintance that use to own a large collection agency. At one of the national conferences for the credit repair industry, he confided in me that every Monday when he came into the office, he would go onto e-Oscar, (Online Solution for Complete and Accurate Reporting) the software owned by the credit bureaus to communicate back and forth with the data furnishers. He would reply to every dispute from the credit bureaus that the account information was verified as accurate. What he received was a two or three digit code that stood for a specific dispute, and, would send back the code stating the account was verified. He usually took all morning to do this without so much as peeking at any of the accounts. If you sent along documents supporting the dispute, they are never transmitted by the bureaus. I informed him this was an illegal activity. He argued, but eventually admitted it wasn’t quite the right thing to do. If he was taking this short cut how possible is it that others are doing the same? The mentality of some of these collection agencies, that are huge in size, is; if we can get away with it, so what – prove we didn’t investigate your dispute.

A new breed of Collection Agencies
It used to be that Collection Agencies got a percentage of the moneys collected. Today, more and more companies are pursuing a new model – they are debt BUYERS. Known as Junk Debt Buyers they buy huge amounts of consumer debt for pennies on the dollar! One company in a three month period purchased $2.3 BILLION dollars of consumer debt for $121,000,000. Another had, as of last September held more than 34,000,000 individual accounts and paid only 2.54 percent of their original $42 Billion dollar value. There is just too much profit at stake.

A more recent trick is to ask YOU to provide them all information, (even on accounts that are not yours). It is THEIR job to prove the debt, not yours.

With all these tactics is it any wonder anyone can get inaccurate or unverifiable information off their credit reports as required by consumer credit laws. The average consumer has little chance. This is why there is a need for Professional Credit Repair Companies like our company, Credit Scoring Advisor, to even the playing field and aggressively go after tradeline that should be removed. We average 70.2% success rate on removal of the accounts we go after.

At Credit Scoring Advisor we are the experts. We have trained and coached many credit repair companies throughout the United States and Daniel Sater, our founder, has spoken at numerous trade conferences on credit scoring and credit repair and have created several certification exams for the industry. You have continued access throughout our process to a recognized credit expert. Give us a call for a free consultation at 631-392-8685.

Friday, May 3, 2013

Frustrated by Mortgage Closing Delays by an “IN DISPUTE” account?

Frustrated by Mortgage Closing Delays Caused by an Account Being “IN DISPUTE”?

by Daniel Sater – Nationally Recognized Credit Expert         631-392-8685          www.CreditScoringAdvisor.com

The mortgage industry has gone through numerous challenges, changes, and restrictions over the past 5 years but it is pure frustration to have the “IN DISPUTE” notation come up at the last minute delaying a closing, and worse, cause possible anger and frustration on the part of the home buyer.

Homebuyers Seldom Check Their Credit Before Applying for a Mortgage
This situation happens more time than we would like to see due to the mortgage application and credit pull being the first time many buyers have looked at their credit reports and scores. In the US it is estimated that about 40,000,000 credit reports have errors or misleading information on them.

It is at this point that home buyers start writing the credit bureaus or hire a professional credit repair companies to assist them in removing inaccurate, incomplete or unverifiable information from their credit report as provided for by the consumer laws. If an account isn’t deleted the “IN DISPUTE” notation will stay with it forever.

The Requirement to Remove all “IN DISPUTE” Notations
Recently, Fannie Mae and Freddie Mac have decided that this notation has skewed the FICO scores and demanded that this notation must be removed.  One of the problems is that their assumptions are wrong. There are two dispute notations; the first one is a temporary notation the credit bureau reports during investigation which suspends the scoring model from scoring the negative information. With the new software used to communicate between the bureaus and the data furnishers this may last 5 days. If the creditor verifies the information as accurate they will add a permanent notation of “IN DISPUTE”. Even with this notation the negative information is now scored!

How To Remove the “IN DISPUTE” notation quickly.
A simple letter to the creditor stating that, “This account is not in dispute. Please remove the Compliance Condition Code “XB” from reporting.”
This is the code at the credit bureau that enters on your report “Acct information disputed by consumer under FCRA” and “IN DISPUTE”. If you send a letter to the credit bureaus most likely they will refer you to the creditor and take no action.
We do this for our credit repair clients seeking a mortgage all the time, and now, any mortgage professional can do the same for their home buyer.

Daniel Sater is a Nationally Recognized Credit Expert who founded Credit Scoring Advisor, a national credit repair company specializing in Rapid Credit Repair for their clients. In addition Dan trains and Coaches numerous Credit Repair Companies across the country, he is a Speaker and Author. He last book, "The Top 20 Toxic Credit Mistakes" is available on the Credit Scoring Advisor website. He can be reached at 631-392-8685.