Perhaps one of greatest marketing geniuses of our time is the marketing guru who came up with the names -

Consumer Credit Bureaus and Fair Issac.

The very names imply that the the information provided is fair and that the credit bureaus  are consumer friendly and ready to advocate on the side of consumers.  Many consumers believe that the Consumer Credit Bureaus (CRA's) were developed to protect consumers.  Reality is that the CRA's are paid by the Creditors or Furnishers of Information (FIO) to compile and report the information that the FIOs send them.  Therefore, the Credit Bureaus are more inclined to develop procedures that protect the person paying them, the creditor, over the consumer. 

Ditto that with Fair Issac.  Fair Issac developed FICO scores and the very name implies that the tool used to develop the score is without bias.  Fair Issac makes their money from lending institutions.  Lending Institutions have it in their best interest to keep the FICO scores in the mid range in order to keep profits high.  There is nothing fair about Fair Issac!

Understanding this concept is a critical part of managing your credit score.  Whether you have excellent, fair or poor credit you need to develop a strategy to manage your credit in a way that give you more power.  Assuming that credit bureaus will advocate for you in a situation where the Creditor is furnishing incorrect or false information could harm your credit score.

Here are a few tips to go by if you find yourself in a situation where you need to communicate with the Credit Bureaus:

1.  Always send communication Certified Mail, Return Receipt Requested.  The CBA's have 30 days to validate the information (45 if you use a free credit report - so never dispute items from a free credit report - pay the extra money)

2.  Do not send copies of receipts or bills  to the CRA's.  This automatically validates the debt and you  will never be able to dispute the debt.  Instead, challenge incorrect information via the mail.  No need to go into great detail, simply state that you dispute the information reported.  By law, CRA's are required to report only accurate information. 

3.  Once you have disputed an item, do not give more information.  Wait the full 30 days for the CRA's response.  If you add more information to a dispute, the CRA's are able to add an additonal 15 days to the process.

4.  If the item comes back as verified, immediately request in writing that the CRA give you exact procedure used to verify the debt.  Most of the time you will find that the CRA did not actually contact the FIO, but instead just checked it against the computer database.  Well, of course the information is going to come back the same.  If an item is disputed the CRA is required to actually contact a person at the FIO to verify the information.  You are entitled to that information and have a right to demand it from the CRA.  This is not something that is offered up freely.

Part of my service as a Loan Consultant is helping my clients manage their credit.  Taking control is the first step to success.  There are simple strategies that you can take to put yourself in a position of power when it comes to your credit.  Please contact me for a credit review.  I'll be happy to provide a customized review of your credit and give you strategies to improve it. 

There is nothing better than helping  credit challenged clkients buy or refinance their home. 

Request My Free Report - 7 Strategies to Managing Your Credit.

Your Lender For Life,

• Kate Bourland
• New Key Home Lending
• 530-244-4345