Know credit scoring model
There is two widely used credit scoring model used in the USA, namely Fair Isaac Corp’s FICO and Vantage scoring model. Both models range between 300 and 850 – the higher the score, the better. The average FICO score in the United States is currently an all-time high of 695. Although there is a different scoring model exists, which causes this figure to fluctuate by a few points in between 660 to 720. We will also discuss how to dispute credit report with the credit reporting agency using a simple letter format. Feel free to skip ahead if you already know this.
Remember George Orwell’s dystopian novel 1984?
Big Brother was always watching the citizens of Oceania. Everything they did was monitored and judged harshly. The credit bureaus work very much like Big Brother, but you have the power to overcome and make your financial dreams come true.
The three credit reporting agencies
There are mainly three major credit reporting agencies typically used by lenders – Equifax, Experian, and TransUnion. Each has different methods of determining your FICO score, and some present you with an educational credit score that differs from the actual FICO score your lender will pull.
Even official FICO scores are different, depending on the type of lender. Auto lenders use FICO Auto Scores, while credit card issuers use FICO Bankcard Scores and mortgage lenders use FICO Score 8.
To calculate your FICO rating, Equifax uses FICO Score 5, Experian uses Fico Score 2 and TransUnion uses FICO Score 4. Different lenders query different credit agencies. And they also report your payments and credit history to different agencies too. This means a debt, credit card, or default could show up on one, two or all three of these agencies.
Get your free credit report
Your credit score affects your life in many ways. So the only way to protect yourself and your money are trying to stay on top of Big Brother. All three agencies are required by federal law to provide you with a free annual credit report at your request once every 12 months. You also have 60 days to report a free copy if you’re denied for credit, insurance, or employment based on bad credit. To order, visit annualcreditreport.com or call 1-877-322-8228.
You need an itemized list of everything showing on the reports
It’s not enough to just see your score. Also, you need an itemized list of everything showing on the reports. So that you can dispute any mistakes or misreported items. Keep in mind there are laws about what can appear on your credit report. Disputing these can double the rate your credit score rises, so you’ll achieve your goal of financial freedom much faster. Here are all the things that you need to dispute a credit report. Feel free to skip ahead if you already know this.
Major agency’s Dispute departments contacts
Of course, disputing items on your credit report can be a bit daunting. Here’s the contact information for each credit agency’s dispute departments:
Phone: (800) 864-2978
Mail: Equifax Information Services LLC
P.O. Box 740256
Atlanta, GA 30374
Phone: (888) 397-3742
P.O. Box 4500
Allen, TX 75013
Phone: (800) 916-8800
Mail: TransUnion LLC
Consumer Dispute Center
P.O. Box 2000,
Chester, PA 19016
Disputing items on your credit report
The Consumer Financial Protection Bureau has an easy format with phrasing that will force these agencies to respond. It recommends mailing a copy of any documentation you have, along with your credit report from the agency and a copy of your driver’s license or government-issued ID card.
Using this simple letter format, you’ll strike fear into the heart of Big Brother:
Be sure to request a receipt copy so you have proof that your mailing was received. Therefore this simple step is the secret to winning against collectors in court. So it can save you literally thousands of dollars or more on your debts.
This is especially necessary with Equifax, which is known to be the most difficult of the three agencies to deal with. So if these agencies don’t respond the way they’re required to by law (which we’ll discuss in more detail below), don’t hesitate to fight Big Brother with an even bigger partner – the government. Because credit score Affects your life in many ways. What to do if the credit reporting agency refuses to fix your credit report. I provide a lot of information about this on the page what next if the dispute with CRA’S not solved within 30 days.
You can also dispute the debts directly with your creditors, which is what the next section (force-creditors-to-validate-debt) is all about. Now we’re going to discuss the secret to defend yourself against collectors. Get excited, because your life is about to change!