How I turned around my sister's credit

[Ryanwb]

If you're in credit hell, here are some tips and guidelines you can use

Two months ago my sister came to me in dire need. She just dumped this infectious waste of a boyfriend and was in financial ruin. Her credit score was 502, she couldn't get a car loan and she had no place to live.

Last week I got an e-mail from Experian saying they deleted nearly the last of the negative entries on my sister's credit report. Here's how I did it.

First off, after she told me her score was 502, I pulled her free credit reports, she had 17 items in collection Most of them were for under $500.00 while 1 was for $2000.00 (an apartment eviction). She had $6000 in debt and $4500 from a car accident settlement and income tax returns. We both felt this was the only opportunity she may have for a while to get this fixed so instead of buying a car with the $4500.00 we decided to put it too good use.

I called every single collection agency and started negotiating with them. here is my advice when dealing with these people

• Always negotiate: If you can't get a reduction in total amount owed, ask for them to remove the negative entry on the credit report instead. One company settled with me for .45 on the dollar
• Do not appear weak and do not get angry with them, you must be in control
• If you use your income tax return to pay debts you are entitled (by law) to a 10% settlement reduction.
• Always get everything in writing

After two solid weeks of hitting the phones everyday, getting letters in the mail, I started paying out money. I wrote checks so I could manage the money with a paper trail. After two weeks the items started hitting the credit report as "paid, closed". I was able to get 5 of the companies to remove the negative credit item from the report during the first round of negotiations, leaving 12 total negative credit entries.

Next my sister needed to establish new credit, so I took $300.00 from her pay check and ordered two, $150.00 secured credit lines. Basically her money was her credit line. This was recommended to me by the loan officer from the place she originally tried to get a car from.

After all the items hit the report as paid, I called each company back and requested they remove the negative item from her credit report. Most refused, but I got 2 to do it. Total of 7 negative entries removed, 10 more to go.

this brought me to the last step, which, according to my father may seem shady, but it worked. I disputed each and every paid item on her credit report as "unknown". I read about this tactic on the internet, it seems most companies are understaffed and are interested in only researching accounts that are unpaid. So when the credit company comes calling, they usually don't respond.

It took the entire 30 days, but last week I got the notice that 8 of the 10 were deleted. The two remaining were "updated" but not deleted.

My sister was able to get pre-approved for a car loan at her credit union and is on the road to leaving my house.

if anyone has any questions on how to clean up your report, let me know.... I've been through hell and back

 

[dreamcastrocks]

I'm going to try the unknown.

I have quiet a few on my report that may get removed.

 

[Ryanwb]

I'm going to try the unknown.

I have quiet a few on my report that may get removed.

They have to be paid, but I had an 80% success rate. Again, it's a little shady but so is being dinged for 7 years even after you paid something off (this was my thinking of the situation).

Also, you could try calling and ask them to remove it since it's paid. The worst they could say is "no".

I also disputed something again after it came back as "updated" and the second time it got removed. I don't know the validation process involved but I assume you can use it to your advantage

 

[Mulli]

They have to be paid, but I had an 80% success rate. Again, it's a little shady but so is being dinged for 7 years even after you paid something off (this was my thinking of the situation).

Also, you could try calling and ask them to remove it since it's paid. The worst they could say is "no".

I also disputed something again after it came back as "updated" and the second time it got removed. I don't know the validation process involved but I assume you can use it to your advantage

I might do the unknown thing.

 

[AZZenny]

Ryan, that's really impressive -- not just that you did it, and the persistence it took, but for really thinking through how to help your sister instead of a quick fix. Now... you've just got to help her stay there.

I read about a woman a few years ago who was so spectacular at getting companies to do the right thing -- accept return items past the date, make up for errors they initially denied, stop citing obscure fine print --- that she actually incorporated herself and hired out to individuals and she said what you said -- prepare your documentation and what you want to accomplish; be firm, professional and never sound rude, cocky, or threatening; take careful notes of names and job titles and so on; and most of all -- tenacity and patience. If it wasn't worth doing that, she said, then it probably isn't worth bothering with in the first place.

 

[HeavyB3]

So, how old is your sister? Hehe j\k


PS. Good job with that.

 

[Linderbee]

Great job, Ryan. That was a really really nice thing to do for her.

Growing up = brothers suck

As adults = brothers rule

 

[Shane]

Growing up = brothers suck

As adults = brothers rule

Growing up = sisters suck

As adults = sisters still suck

 

[Yuma]

Great job. Thank you for posting this information! This is probably one of the most practical and useful posts on this entire site. Most posts here are fluff.

 

[Gaddabout]

Best. Post. Ever. Way to go, Ryan! Can we sticky this?

 

[Ryanwb]

Best. Post. Ever. Way to go, Ryan! Can we sticky this?

Thanks! There are a number of fallacies out there on the web and hopefully someone can use as a starting point for issues.

For example, the old, "Medical bills don't show up on your credit". Believe me, they do. Also, "if it gets charged off, there is nothing you can do." Well someone will buy your debt and just taking with people will get you pretty far. I was literally stupified about where to start with all this, but I just called a lot of people at these collection agencies and asked a lot of dumb questions. The credit bureaus are no help at all, you can't even speak to a human if you try. I got a number off the Consumerist.com and they just hung up on me.

This one guy at a law firm really, really helped me out a lot with some tips of the trade like getting things in writing, coming prepared with a game plan and working with them to settle, even calling at the end of the month when collection agents need to get their dollars recovered up so they will settle for much less.

Definately make the system work for you and calling back repeatedly to get someone who will actually help you isn't a bad idea either!

 

[100%CardsFan]

I work for a MAJOR bank and have been negotiating 15% settlements. You could do alot better than 45%. Beleive me ..they will take it. They might tell you they wont but make sure you call on the last day of the month where they HAVE to meet a monthly goal and they will take anywhere from 10%-20%. Let them know your family member is loaning you the money and it is only good for today. I settled 65k worth of debt for under 10k for my mom

 

[kps0001]

I recently paid to have my credit "repaired". I just didn't have the time to do all the disputing and follow up. I learned a lot during the process and have studied a lot of the FCRA.

There were a bunch of erroneous items on my report but a lot of valid ones, some had been taken care of some not. My credit score jumped 85 points in 6 months. I pretty much can get whatever I need to on credit now, not that will. However, it is nice knowing I am not getting reamed by interest rates if I do have to finance something.

I really don't feel bad about having the negative items that were valid removed. Maybe the wrong mentality but I am willing to get what I need by paying for it. I would have paid a lot more for years to come had I not had those items removed. There are a lot of horror stories about these "credit repair" business being rip offs but there are many legit ones out there.

The burden of proof lies upon the creditor to show any item reported as valid. There is about a 7 item checklist in which they have to provide every item. If even one item is missing they have to remove the item. It is your right under the FCRA to dispute and make the creditor prove the item as valid. Disputing with the credit bureaus is only the first step. If the credit bureaus find it to be valid you then start disputing with the reporting creditor. This is when I really saw things dropping off.

Anyway, nice work Ryan and certainly good info to share. I am currently helping one of my friends repair her own credit.

If anyone is interested in the place I used I would be happy to give you the name and number via PM. It was costly but well worth it in the long run.

 

[Linderbee]

bump. I'm highly motivated to get my credit cleaned up, and I knew Ryan had made a thread about all he had done for his sister, so I went looking for it. Just thought it might still be useful info for anyone else.

dcr & I want to buy a house this summer, and I have GOT to get my credit fixed so we can qualify. I already got a secured credit card, and will be using my tax return (if I'm so lucky) to pay off what I can. Want to get that done so I can start calling at the end of March.

 

[AZZenny]

A friend of mine put it in terms of a reverse diet, for a mutual friend who just can't seem to get her finances under control -- either more 'calories' need to come in, or fewer get expended, only it's dollars not carbs or fat grams. In the same way you hunt for that hundred calories a day to cut fairly painlessly, look for about $5 a day cost that you can trim. So that Vente Cappucino on the way to work is maybe $4.50, and you can make a good drip coffee to take for 25 cents.
Then, like any truly effective diet, it has to become a lifelong habit.

Good luck, Linderbee!

 

[Ryanwb]

bump. I'm highly motivated to get my credit cleaned up, and I knew Ryan had made a thread about all he had done for his sister, so I went looking for it. Just thought it might still be useful info for anyone else.

dcr & I want to buy a house this summer, and I have GOT to get my credit fixed so we can qualify. I already got a secured credit card, and will be using my tax return (if I'm so lucky) to pay off what I can. Want to get that done so I can start calling at the end of March.

If you do pay off creditors, let them know you are using your tax return and you get an automatic 10% off (as I stated prior). I wonder if you could negotiate a settlement, THEN tell them the source of the money and get it further reduced.

In any regard, good luck! It's a process for sure, I had to buy a fax machine for home to work through this

 

[dreamcastrocks]

If you do pay off creditors, let them know you are using your tax return and you get an automatic 10% off (as I stated prior). I wonder if you could negotiate a settlement, THEN tell them the source of the money and get it further reduced.

In any regard, good luck! It's a process for sure, I had to buy a fax machine for home to work through this

I have been arguing with one of the collection agencies to remove something for the past few hours. They agreed to not place anything on my credit if I made payments, I made all of the payments and they still put it on their anyway.

I filed a dispute stating that they agreed to remove it.

Let's see if it works.

I had about 4 other things on there that I disputed.