Contact the Credit Source and the Repository Simultaneously

Most credit advisors tell you to notify the credit repository, point out the change you deserve, and formally, in writing, seek compliance with your request. This is good advice except for one critical fact: Credit repositories primarily report only that information given to them by your creditors. Unless the repository has botched the data it's been given (quite possible), the repository must contact the (mis)reporting creditor. If the creditor does not respond within 30 days, the repository must remove the disputed item.

However, if the creditor says, "Sorry, no mistake on our part," the record remains as is. The problem is back in your lap—but now 30 days may have passed by. To head off this potential delay, contact the original source of the (mis)information at the same time as you contact the creditor. Ask the original source to give new, corrected data to the repository. Upon request, some creditors will reverse derogatory entries for customers they do not want to lose—or as a perk to encourage payment or settlement.

On the other hand, if you deal with a hostile or indifferent creditor, you could face a prolonged battle. In that case, the loan underwriter will either waive the black mark upon suitable explanation from you; offer you a higher-cost, less-desirable loan; or decline approval until you obtain the creditor's correction or release.

To close their mortgage in a timely fashion, many borrowers have had to pay disputed claims. Act early and you prevent forced settlements on eat-crow terms. Carefully review your credit report now. Avoid last-minute pleas under deadline conditions.

Borrowing Basics

Borrowing Basics

Some small business persons cannot understand why a lending institution refused to lend them money. Others have no trouble getting funds, but they are surprised to find strings attached to their loans.

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