Debunking The Myth Of Seven Years
Struggling to reel in debt can be an uphill battle. Financial institutions with higher interest rates, penalties, and fees make recovering from your situation more difficult. It doesn’t need to be daunting. A derogatory mark doesn’t need to be on your report for 7 years. Here’s how to repair your credit, on your own, and fast!
Survey The Damage
Request copies of your credit report from each credit bureau and pick apart every mark reported. Track which creditor/collection agency reports to which bureaus. Most report to one or two. So make sure you are addressing derogatory marks across all three reports. Once you connect the dots, you can address each mark one by one. From the credit card you stopped paying on a year ago to a parking ticket you weren’t aware of… review each negative mark and make a list.
Catalog the hardships you’ve endured. Did you lose your job? Did your car break down? Were you struggling to keep up on bills or the cost of daycare? Whatever the circumstance, make that list thorough. It’s not self pity, it’s life. Its relatable. Write a cohesive script, then scrounge up every supporting document to back up your story. This is the foundation for repairing your credit.
Start With The Chump Change
Whether it’s a mystery or a mistake, a parking ticket, or a television cable box, call and dispute those marks. Find out when they report corrections, and which credit bureau they report to. If they refuse to work with you, and you feel the fault is not your own, ask the crediting bureaus to notate that negative mark as disputed. Taking the effort to have your disputes documented reflects that you care.
If the derogatory mark is your fault, own it. Call the collection agencies and negotiate. “I’ll agree to pay this now, if you reverse the fees.” Also insist they remove any negative marks from all the credit bureaus they report to once you pay the agreed amount. Collection agencies earn a commission on the funds they recoup, so they’ll have room to barter. Make sure they uphold their end of the bargain. If not, follow up.
Don’t let that next rep brush you off. Despite what they claim, there is always a record of your calls. That’s why it’s important to document everything on your end. Is the call being recorded? What’s the representative’s name and ID #? Notate the date, time, and duration of every phone call you made. Document every aspect of your efforts. Make helping you the path of least resistance.
Delinquent Credit Cards and Loans
Customer Service reps answer the phone prepared to deal with people who are angry, desperate, or afraid. Be the bright spot of their day. Don’t test their patience. Have every piece of information they’ll need at your finger tips. Remember, you’re calling to plead for the mercy with the powers that be. So ingratiate them. Ask them how their day is. Express appreciation for how hard their job is, and that you’re grateful they’re taking time out of their busy day.
Launch into your story. Own your mistakes while explaining the circumstances of your trials and tribulations. You’re trying to make good on your debts. You’re making every effort to turn your situation around. Be a breath of fresh air. You’ll likely strike a chord.
Negotiate Your Interest and Fees Down.
Recognize they hold all the cards and plead to their benevolence. If they can’t help you, there’s someone above them who can. All you have to do is keep asking questions.
“Is there someone who can help me?”
“Are there any programs designed to help?”
“Is there someone who might know?”
If all else fails, thank them for their efforts and ask to talk to a supervisor. Then start over with more composure and don’t complain.
Supporting Documentation
You’re going to get the addresses of a specific department to appeal to, and submit letters with supporting documentation, likely via snail mail. Print your bank records, medical records, unemployment checks, everything, and everything. It doesn’t matter what it is, put together every document that supports your story.
If you forgot something, you might get a rejection. Try again and track your progress. As time goes by, those negative marks will vanish one by one.
Back Taxes
Owe money to the IRS? If you can show your wages are less than your cost of living, you may qualify for hardship status, which will buy you time. Ask for an agent to walk you through filling out the forms with supporting documentation. After a couple of months, you can apply for “An Offer In Compromise”. It’s a program through the IRS, negotiating your debt down to what you can afford, and setting a payment plan for the settled amount.
Build It Back Up
Last, apply for low balance credit cards. There are a few pre-paid credit cards out there. The same approach applies. Find out what date they report to the credit bureaus. Max them out and pay them off each month before their report date. In three months, your score will improve even more.
Own your mistakes. Be courteous, be kind, be gracious, and acknowledge that you’re doing your best with the hand dealt to you. Luck is where you find it. Where there’s a will, there’s a way. Fortune favors the brave.