CREDIT REPAIR- MY STORY
Repairing my credit has been much more rewarding than I had imagined. Back in 1991 I started what became a very enjoyable hobby. At first I was angry. Angry about what I viewed as sinister, shyster collection agencies marking me as a deadbeat. I would probably still be angry and frustrated if I had not been able to do something about it. What I found was that the process was extremely simple and inexpensive.
But there are a few catches. For instance, if you are a bonified deadbeat who intends to cheat people out of their money the system has some very effective ways to flag you as such. However, if you have a zero balance on a debt that you may have had trouble with in the past, it is very easy to remove that entry from your credit file.
THE DAMAGE
In 1984 my wife delivered our first child 10 weeks premature. It was a very scary time for us. The doctors were telling us our son may not make it through to the next day. All the while the medical bills were piling up fast. When our son was 1 week old we received a letter from our insurance carrier explaining why they would not insure our baby and that I was soley responsible for any and all expenses incurred by the baby. They ended the letter with "have a nice day" which was very comforting. NOT!
Well, our son lived through the ordeal and once we got him home (months later) we started our battle with the insurance company. Turns out they were pulling one all along! After a letter and phone call to the state insurance board our insurance carrier suddenly found the "mistake" they had made and insured the baby. Of course the service was poor to say the least. We ended up owing tens of thousands of dollars in medical expense to the various doctors, medical companies, and hospitals involved with our son's recovery. And they all wanted to be paid in full right now.
We couldn't do that, of course. We were just barely getting by as it was. I made next to nothing on my job and my wife had to stay home with our sickly baby. Not being able to pay in full we contacted the various medical companies, hospitals, and doctors and worked out low monthly payments. Almost all of them turned us over to collections anyway. They told us it was their "policy" to turn all accounts over to collections if older than 6 months. It didn't matter that we had never been late on a payment. They ruined our credit. Not just mine but my wife's too.
Feeling like there was no other choice, we loaded up our credit cards by paying off all of the doctors we could. That turned out to be a crushing blow to our credit. Future creditors discount most bad medical debt when considering you for a loan. We didn't know that at the time. Now we had monthly minimums on those credit cards that we couldn't pay. That helped ruin our credit rating altogether. Never pay medical expenses with credit cards.
THE TURNAROUND
Well, we paid off those bills! It took us years but we did it. We were encouraged to file for bankruptcy but we steadfastly refused. I guess we felt like we were from the old school. But even though the debts were paid our credit was still in ruins. By then it was 1991, my career had taken us to a more comfortable financial level and we wanted a nice house. We could get a mortgage but it was gonna cost us dearly. We were considered a high risk due to our credit rating and if we wanted a new house we were gonna pay out the nose in interest. Well we were not that financially comfortable and we didn't get that house. It still upsets me even after all these years. My bad credit changed the course of my family's life! We didn't get the house, the neighborhood that came with it, the friends that may have been there, the school district, etc... It was extremely frustrating. That is when I decided to fight back. My problem was that I didn't know how.
THE RESEARCH
Our first step was a meeting with a lawyer who specialized in credit repair. My wife had seen a TV commercial and had made us an appointment. $2,500.00 would make all of our credit problems disappear. However, there were no guarantees and of course the $2,500.00 was to be prepaid. We declined. We had a nice long chat with the lawyer, though, and I picked up some of my best credit repair tools from our little chat. I left the meeting confident I could clean our credit up just as well as any lawyer.
I fired off a letter to Experian (One of the big 3 credit reporting agencies) challenging an entry made by a bill collection company. This account was the only one I had not paid off. There was $1000 still owed and I refused to pay! The original debt was to the hospital that cared for our premature baby. We struck a deal when he was 2 days old that if my wife and I would head up a blood drive the hospital would not charge us for any blood transfusion our son needed. We had one heck of a blood drive but they charged us anyway. I was too mule headed to pay it and this debt haunted us from 1984 till 1999. I received a letter back from Experian stating that they had indeed verified the debt and nothing changed on my credit report. I felt helpless.
A couple of months later my wife saw a classified add in the paper. It was a credit repair company. $400 later we had them working for us. So we thought. They disappeared! The whole company! Gone! Our bad credit, however was still there.
Thankful we had only lost $400 rather than $2500 I was convinced that noone would do it for me. I MUST do this myself! I bought countless books and computer programs and really researched credit repair. What I found was that almost ALL of the other entries on my credit report, except for the one I had already tried to remove, were simple to eradicate.
EUREKA! REPAIRED CREDIT!
The most important thing I learned is that bad credit entries with zero balances are easily removed. When you challenge an entry the Credit Reporting Agency (CRA) must verify the entry with the creditor. It costs the creditor money and time to verify the entry. If your balance is zero, your account is probably not even in the creditors computer files. It then gets really costly for the creditor to find the file only to see that it has a zero balance. It simply isn't worth the cost for the creditor to check accounts with zero balances. Therefore they don't reply to the CRA and the negative entry is removed.
On the other hand, if you have a bad credit entry with a balance owed it is much more difficult to remove. In my case the $1000 blood drive debt stayed on my credit report for 14 years. Why didn't it come off after 7 years? Well, up until 1999 creditors had a loophole that could ruin a person's credit for life. My son was born in November of 1984. The $1000 bad debt was reported in 1985. Seven years later in 1992 I was very excited that this was about to go away. It didn't! The creditor sold the note to another collection agency just prior to the 7 year deadline and they immediately reported the $1000 bad debt to all 3 CRA's. As you can see this can be done for the rest of your life.
I was able to have it removed in 1999 by utilizing a trick I picked up from all of the research. We put a statement on our credit reports explaining why we had not paid the debt and why we would never pay the debt. By doing this the liklihood of another collection agency purchasing the note was remote. It also gave me great satisfaction to know that the creditor who bought the note at the 7 year mark, ruining my credit another 7 years, wound up eating his investment.
After removing all of the easy, zero balance negative entries on all three credit reports there were still a couple of obstinate creditors that kept verifying the entries; even though the balances were zero. The hardest one to remove was an entry for a 30 day late pay. We had missed the last payment on a loan in 1990. After the bank sent us a nasty-gram, we paid it off ($81) and that was that. However, the bank reported us as a 30 day late pay. It must have been 3 years later I set up a meeting with the bank president (it was a small bank in a small town). I asked him to remove the entry from our credit report. I also showed him how the mistake happened and tried to convince him that I was honest and trustworthy. I did not go in there pounding my fist on his desk. Nevertheless, he was firm in stating that the bank reports em as they see em. I couldn't argue with that. I told him thanks, went home and kicked the side of the house. To my amazement, the next time I checked my credit reports the entry was gone. I guess he changed his mind. I assume being professional and courteous paid off, in spite of not hearing what I wanted.
Well, thats my story. Yours may be different. Just remember that you can clean up your own credit file legally, ethically, and easily. As long as you are not trying to swindle a creditor out of their money the process couldn't be easier.
