Have you ever disputed the WRONG thing and wrecked your credit score?
Well, on this week's Podcast, I will help you avoid one of the biggest mistakes in credit repair!
In the 20 years since releasing my first credit repair software, I've helped thousands of people repair their credit and file Millions of credit repair disputes.
During that time, I learned which disputes work, which don't, and why.
But it wasn't always easy. When I was starting, there weren't free courses that taught you how to read credit reports. There wasn't a community of Credit Heroes to answer questions or software to speed up the process.
We had to learn by trial and error. And the most common mistake I saw was people disputing and removing EVERYTHING from their reports.
They thought it would wipe the slate clean. But it backfired BIG TIME.
They realized not all disputes lead to credit repair success.
I learned not to dispute and remove items from credit reports unless I knew exactly how it would impact the credit scores. And today, I'm going to share the secrets to effective disputing, what to remove, and what not to dispute!
HOW THIS RELATES TO US
For those of you new to Credit Repair, quality disputing is an art form. You can't fix a credit report with a wrecking ball. It takes focus and precision.
Knowing what to dispute and what not to dispute is the difference between long-term financial health and a major setback.
For credit repair business owners, disputing correctly can make or break your client's trust in you. So, dispute with care. You'll have happier clients and more referrals!
THE THING TO REMEMBER
The Fair Credit Reporting Act ensures your legal right to an accurate credit report and gives you the power to dispute any errors you find. But just because you can dispute doesn't always mean you should.
WHY THIS IS IMPORTANT
If you're trying to repair your credit or you're knee-deep in client credit reports, it's easy to get trigger-happy and want to dispute everything.
But here's the thing: if the credit bureaus believe you're disputing everything all at once, including legitimate items, they often use it as an excuse to throw out the disputes, mark them as frivolous, and stall the process.
But the stakes are even higher than that!
If you dispute the wrong negative item, it can actually do more harm than good to your credit score.
WHAT YOU NEED TO KNOW
The key to fast and effective credit repair is knowing which items to dispute and which to leave alone. In my experience, the negative items you need to be most cautious about are the ones tied to open accounts. I'll explain why in a minute.
First, if you have access to your credit reports, I recommend opening them and following along because I will walk you through each section.
If you don't have access to your credit reports, you can request free copies at AnnualCreditReport.com.
Okay, let's dive in!
As always, your first step in any dispute is to review the PERSONAL INFORMATION section and make sure everything is accurate across all three credit bureau reports.
A huge percentage of reporting errors are found in the personal information section. They're easy to spot, simple to dispute, and they result in quick credit score boosts! I call these low-hanging fruit disputes.
But as you move beyond the Personal Information section, this is where disputing gets a little more complicated.
When you review the ACCOUNT HISTORY section, don't dispute anything marked as "Positive," "In Good Standing," or "Paid as Agreed."
If the account is "Positive," "In Good Standing," or "Paid as Agreed," it's usually considered Good Debt. And Good Debt is extremely valuable. It's how we build our credit history and improve our credit utilization, which makes up 2/3rds of our credit score calculation.
If you dispute accounts "In Good Standing," you risk wiping out your "Good Debt" and causing serious damage to your credit score.
The only situation where you would dispute these types of accounts is if you don't recognize them. In those cases, they may be a sign of fraud or identity theft, so prioritize their removal over everything else.
Now, if an item in your ACCOUNT HISTORY is reported as "Negative," "Not In Good Standing," or "Delinquent," like collections or charge-offs, these items are fair game to dispute.
You can send basic Round 1 letters to the bureaus requesting verification of the debts and the removal of any unverified items from your credit report.
If you don't have a Credit Repair Cloud account and need Round 1 Dispute Letters, you can download them for free by clicking the link.
Still with me? Great!
One of the most common questions I get from people new to credit repair is how to handle disputes for OPENED and CLOSED accounts.
Well, let's say one of your open accounts has a history of late payments. Those late payments will live on your credit reports for seven years. Getting the account in good standing is a priority. So, you may want to either dispute the late payments with the credit bureaus or work with the creditor to update the account from "Late" to "Current" or "Paid as Agreed." Simple.
Closed accounts are handled differently. Let's say one of your closed accounts has a good payment record, showing you have a positive credit history. These accounts improve credit scores, help your chances of getting approved for loans, and live on your reports for 7 to 10 years – don't dispute or remove them!
Next, let's talk about INQUIRIES.
You might think inquiries mean quick dispute wins and credit score boosts. And that's usually true, but if you dispute an inquiry tied to an open account, it can be a secret recipe for disaster!
SOFT inquiries don't impact credit scores. HARD inquiries have the smallest effect of any negative item and only impact scores for two years.
But most people don't realize that if you dispute and remove a hard inquiry tied to an open account, it can cause that entire open account to be removed from your report.
For example, the last time Credit Repair Expert Bruce Politano was here. He shared a story about a client who disputed an inquiry tied to an open account, and it tanked their credit score!
The inquiry was tied to the client's oldest credit card account. So, when the client successfully removed the inquiry, they unintentionally caused the entire credit card account to be shut down, shrinking the client's credit history and credit utilization. The client's credit was eventually rebuilt, but it was a big step back instead of a giant leap forward.
Ultimately, a credit report with no negative items is better than one with negative items, but removing the wrong ones can do more harm than good.
If a negative item shows up on your credit report and its impact is low, it's about to fall off, or it can be updated to a positive account; don't remove it.
If you want access to our advanced disputing courses and six months of software for FREE, sign up for our Masterclass!
MY FINAL POINT
Not all disputes end in success. Knowing what to dispute and what not to dispute is the difference between long-term financial health and a major setback.
I'LL END BY SAYING
If you still need a Credit Repair Cloud account, check it out. It's the software that most Credit Repair businesses in America run on. Sign up here for a Free Trial!
And if you'd like to change lives and grow your Credit Repair business, check out our Credit Hero Challenge!
It's an amazing program, and we've got another challenge starting in a few days, so grab your spot right now at CreditHeroChallenge.com!
So take care, Credit Hero!
And Keep Changing Lives!