HOW TO IMPROVE A FICO OF 500 OR LESS……
Step #1
Order a copy of your credit report / after a credit turn down it is free.
Experian Equifax Trans Union
PO BOX 2104 PO BOX 740421 PO BOX 1000
Allen, TX 75013-2104 Atlanta, GA 30348 Chester, PA 19022
1-888-397-3742 1-800-685-1111 1-800-888-4213
The important thing to remember nothing is written in stone. Many items you thought would follow you the rest of your life can be legally removed or improved on your credit record. There are many companies that charge for this service, you can do this on your own or with the help of your loan officer.
Step #2
Pay your bills on time
Step #3
If you have missed any payments, get current and stay current.
Step #4
Payoff debt as opposed to moving it around.
Keep balances low on revolving credit.
Step #5
Once you are current on your normal bills (excluding collections, liens and judgments) start writing letters disputing everything that is wrong on your credit report. Note any inaccurate late payments/wrong social security number/address/date of birth…any incorrect item that should be fixed or removed.
**A sample letter is attached. In addition, submit any proof of errors (cancelled checks, payoff letters, etc.) with your letter of dispute.
Step#6
Wait approximately 2 weeks. You will get updated reports. Verify any incorrect information and send another set of letters.
Step#7
When you are financially able to work on paying off your collections, follow these steps.
Prepare for battle-these people are not customer service oriented and can be a little on the abrasive side, keep your goal in mind and keep cool. Collection companies will usually settle for a lesser amount than you “owe”. This magic number may have late fees, processing fees, administration fees, you took too long to pay us fees, etc.. A good place to negotiate from is usually 50 % to 60% of the total bill. It is easier to negotiate a lower payoff when you are paying the collection off in full as opposed to setting up a payment plan. If you are met with resistance, ask politely for a supervisor or manager. When you payoff the debt make sure you state on the check that this constitutes payment in full. Use paper checks for a better paper trail-not electronic. Plus there can be no “accidental over charges”. Get terms in writing before paying off/ have a fax available and be ready to overnight funds.
Write down everything- names, dates, times and terms you have negotiated. Document everything, these are not happy jobs and turnover is great. Protect yourself by writing it down!
Act Businesslike-Stay calm cool and collect. You have to keep your goal in mind.
Here are a few items noted in the Fair Debt Collection Practices Act that you need to know before you call:
Collection agents may not:
q Call before 8:00am or after 9:00 pm
q Talk to anyone but you or your attorney about your debt
q Threaten to garnish wages or seize property unless they actually intend to do so.
q Threaten to sue unless they are actually taking action
q Use obscene language
q Annoy or harass you with repeated calls
q Call at work if you have asked them to stop
q Lie about their identities – note this when you are trying to document your call and they will not give their identity
SAMPLE LETTER FOR BORROWER
February 28, 2017
Equifax
PO BOX 2104
Atlanta, GA 75013
Dear Customer Service,
I am trying to obtain a home loan. I recently had my credit pulled and was denied credit due to errors on my report. Please research these items as soon as possible. Please be advised; as per the Fair Credit Reporting Act Section 611, you are required to remove erroneous and/ or incorrect information from my credit profile. You are currently reporting the duplicate and/or inaccurate information as follows:
Creditor Acct# Report Date Open Date
Countrywide 21458 06/03 11/02
***THIS ACCOUNT HAS NEVER BEEN LATE
Sincerely
John/Jane Doe
SSN# 555-55-5555 | 
