After reviewing his credit reports, Edouardo made copies, then highlighted everything he saw as a negative listing. Most of them were medical collections, and were easy to spot. However, he does notice that one of the bureaus is reporting him as late on a payment to one of his credit cards, and he knows he paid it on time.

In addition, Edouardo has read that as part of the new FACTA legislation to protect consumers from identity theft, he was supposed to have been notified of the negative mark. He is sure he was never notified.

When you first receive your Trans Union and Equifax credit reports, you will be totally lost. The information is coded in a way that is not immediately readable by the average consumer. Each credit report should arrive with a key that interprets the codes and indicators on the credit report. Sit down with the credit report and the key and study it until you understand what each number and code means.

Don’t write on your original credit report — yet. Make all of your notes on a copy of the report. You will be sending your original report with your dispute letter, so you should make at least two copies of each new report. The original goes with the dispute, one copy is for notes, and the other copy is what you will send in to the credit agency.

Gather a yellow and orange highlighter pen. Whenever you identify a negative listing, mark the listing in yellow on your scratch copy of the credit report.

Very often, it is difficult to tell if an item on the credit report is negative or positive. The following table will help you identify every negative listing on your credit reports.

By Amy Debra Feldman • Bankrate.com

Your FICO score is the dominant method lenders use to assess how deserving you are of their credit. Whether you’re looking to get a mortgage, car loan or home-equity loan, you’re going to get scored. Named after Fair Isaac Corp., the firm that developed the scoring model used by the three major credit bureaus — Equifax, Experian and Trans Union — your FICO score is calculated using a computer model that compares the information in your credit report to what’s on the credit reports of thousands of other customers.

FICO scores range from about 300 to 900. Generally, the higher the score, the lower the credit risk. It’s very difficult to say what’s a “good” or “bad” score, though, since lenders have different standards for how much risk they will accept. “A credit score that one lender considers satisfactory may be regarded as unsatisfactory by other lenders for com- parable credit instruments,” says Fair, Isaac Senior VP Cheryl St. John. Scores also fluctuate depending on credit activity. Since credit bureaus only calculate your score at the lender’s request, it will be based on the information in your file at that particular credit bureau, at that particular time only.

The Fair, Isaac model takes into account five factors when evaluating your credit worthiness (You can estimate your FICO score using the free FICO Score Estimator): Past payment history About 35 percent of your FICO score is based on this, which includes la- te payments, delinquencies and bankruptcies. The fewer the late payment- s, the better your score — though a recent late payment hurts your sco- re more than one from five years ago. Outstanding debt

About 30 percent of your FICO score, this includes what you owe on your credit cards and how much you owe on installment loans, compared with the original amounts of the loans. Someone who uses a high amount of av- ailable credit (say 75 percent) is a greater risk than someone who uses only 25 percent according to Fair, Isaac. How long you’ve had credit How long you’ve had accounts and how often you use them, this accounts for about 15 percent of your FICO score. New applications for credit According to Fair, Isaac, “research shows that opening several credit accounts in a short period does represent greater risk, especially for people who do not have long-established credit history.”

This makes up about 10 percent of your FICO score. Types of credit Making up about another 10 percent of your FICO score, this includes cr- edit cards and loans, including installment and mortgage loans. Bear in mind, however, that U.S. law forbids personal information such as ethnicity, religion, sex or marital status from being reflected in your FICO score. The main benefit of credit scoring, lenders argue, is that an automated system allows for faster decisions. Keep in mind, too, that a credit bu- reau score isn’t the only factor lenders take into account when conside- ring your loan application.

“A consumer can have a very good credit sco- re and still not be approved for a loan due to other reasons, such as insufficient income or down payment,”

Fair, Isaac’s St. John says. Other factors, such as length of time at your current employer and the value of other collateral can also influence a lender’s decision.

Step 2 covered how to identify items, both positive and negative on your credit report. Now you have this list, you should rank each item according to the amount of damage they are doing to your overall credit picture. Rank the most damaging information first, followed by the next most damaging information, followed by those items which are neutral. Do this for each credit report, as remember, they may not all have the same information on them. They may even have duplicate information. If this is the case, you will need to write to each credit agency individually for each duplicate item.

The items here are listed in order of descending importance with the first item being the “most damaging” to your credit.

Bankruptcy
Foreclosure
Repossession
Loan Default
Court Judgments
Collections
Past due payments
Late Payments
Credit Rejections
Credit Inquiries

Also, if your creditor has NOT notified you of negative information they have recently placed on your credit report, they are currently in violation of the Fair Credit Reporting Act. You can use this to pressure the original creditor to remove the listing by reminding them they are in violation of the FCRA by not notifying you.

source:http://www.creditinfocenter.com/repair/Repair.shtml#3

It’s a good idea to include all of the above information whenever you correspond with the credit bureaus. And do remember to sign your request. You should provide:

- full name
- birth date
- Social Security number
- current address
- former addresses in last 5 years
- photocopy of driving license, showing current address
- photocopy of Social Security card

If you have a letter denying you credit, employment, or insurance within the last 30 days, a copy of the letter should be provided, since this will allow to obtain a free copy.

If you ordered your credit report, within 10 to 30 days you should receive a copy of your credit report from each of the agencies.

If you are disputing items on your reports, the credit bureaus are required to respond in writing within 30 days of receipt of your letter. Also Note: It’s always a good idea to send your correspondence via registered mail so you have proof the credit bureau received your request during disputes. Registered or certified mail generally costs under $2 at the time of this writing.

What should you challenge?

Everything, and you should always shoot for a complete deletion. Don’t bother challenging the information within a collection listing, charge-off, court record, repossession, foreclosure, or settled account. As the basic nature of these listings is negative, changing the information within the listing will yield no improvement. Severely negative listings, such as these, must be disputed on the basis of complete deletion or not be disputed at all.What items are the toughest to get off your report?

You will have the toughest time getting bankruptcies and foreclosures off of your credit report as these things are so easy for the credit bureaus to verify. In the case of a bankruptcy, you most likely will have a few trade lines saying “included in Bankruptcy”. If you want to challenge your bankruptcy, you need to clear off all credit lines mentioning a BK FIRST.

James E. decided to challenge each and every one of his collections, as well as his credit card late payment. He wrote a letter that:

- listed each of his negative listings by name, collection agency and amount of the delinquency
- Under each of the list accounts, he said he was disputing the accuracy.
- He also included his Name, SSN, Address, and a copy of his driver’s license.
- James E. sent his letters via Express Mail, which gives him a receipt for the mailing, and guarantees delivery.
- Total expense for Express Mail: $36.

Here is an example letter.
http://www.creditinfocenter.com/forms/sampleletter5.shtml