Credit Repair: Part 1 – the Enemy

Bad credit. How do you fix it?Credit Repair

I had some crap on my credit report. It affected my employment opportunities, housing, and it was pretty much assumed to be a picture of “me”. That sucks, because I’m a very responsible and honest person, but creditors don’t play anymore. If you have a dispute, they ignore you and send the bill to a collection agency. Now you can wait the 7 years for it to fall off, and it will, but I’m not a patient man when it comes to some things. Like ice cream – I want it NOW.

I’ve been describing these facts and methods to a number of friends recently. This information was intended to be (and will be) added to the next edition of Darknet, Bitcoin, Fraud.  After explaining it a few times though, I realized I can’t hold this back any longer. It’s simply too important to hide.

This is how I fixed my credit:

I’ve tried to keep this simple. Since credit is important these days and identity theft is rampant, I thought it would be prudent to explain the process of recovery. The government has also swung in this direction, passing acts in the past few years to help US citizens gain some power in their arguments against creditors. It’s pretty straightforward, but let’s get a few things clear.
There are basically three different groups involved. The laws have changed for all of them, granting you more power, but you need to be able to speak with authority. Their business practices haven’t changed much; they’ll still threaten, harass, and blackmail you. I will show you how to easily defeat them, and use the laws in your favor.

First, here’s a rundown of the three groups; what each one does:

Group 1: Creditors are those businesses or entities that grant you credit. They give you something in exchange for your promise to pay. They must ensure that the person they’re granting credit to is you. You can’t walk into a bank and withdraw money without an ID. A social security number and birthdate just won’t do. They’ll tell you to hit the bricks. Sorry for your luck. BUT that’s also what other creditors must do. They can’t just go around willy-nilly handing out money insisting it was you they gave it to, without proof that it was actually you. Rewind to the bank – did they get your ID? Oh, ok. They didn’t? Well, that’s their fault, and if you decide not to pay then that’s their loss – not yours. They’ll get angry, give up, and turn over your account to a collection agency.

Group 2: Collection Agencies are just paper pushers that are skilled in the arts of lying and negotiation. They will buy your account from the creditor for a significant discount. They’ll probably give the creditor about $70 for your $1000 “bad debt”. Now to the creditor, $70 is better than nothing. They’d much rather settle with you for say $100, but sadly that time has come and gone. Pride and appearance usually get involved, clouding the battlefield and causing the creditor to give up on you instead of negotiating. Either way, fortunately for you the collection agency will usually accept any amount over that $70 once they believe they’ll get little more than that. This takes a certain amount of negotiation, stamina, and perseverance. It won’t be easy, but it’s do-able. Meanwhile, they list your delinquent account with a credit reporting agency, sit back, and wait up to seven years for you to cough up the full amount owed.

Group 3: Credit Reporting Bureaus like Equifax and Transunion merely report what Group 2 tells them. They sell this information to individuals and organizations that request it. The bureaus must report what they have, and they are the “front door” for any dispute. They are just “the messengers” – reporting what others have told them – and shouldn’t be “shot” despite the fact that they’re the people responsible for your credit approval. The credit reporting bureaus just assemble your credit score; that’s all they do. They must tell you who is requesting and reporting what. All the information you need to attack your problems is within their grasp, but they won’t help you very much aside from reporting that you contest the claim.

So now you know your enemies; let’s discuss the battlefield.

Next up…. who does what to who, why, and when?

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