Myth Dealing with debt should be your first priority when helping clients build credit.
Fact Focusing on getting good stuff going can be a more effective strategy for building credit.
If you have gone through Steps 1 through 4, you are now ready to help your client delve deeper out of debt. Solutions to dealing with debt:
- Dispute inaccurate info on your report. Write letters to the credit bureaus to dispute this information. Click here for information on how to do this.
- Negotiate with collection agencies. Paying off collections incrementally is not recommended as it could re-activate an od account and lower an individual's score. Instead, try to negotiate a lump sum payment with creditors to pay off an old debt once and for all.
- Use EITC or tax money to pay off collections in one lump sum.
- To find free tax prep solutions, check out the IRS website for programs OR
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United Way also has free tax prep programs for low income families.
<<Step 4: Know the Goal
Disputing Inaccurate Information on a Credit Report
The FCRA gives consumers the right to dispute information on their credit report that they believe to be incorrect. It is recommended that before taking a dispute directly to the credit bureaus, a consumer takes it to the relevant lender to try to resolve the issue. If the disputed information is incorrect, the lender can then communicate with the credit bureaus to get it taken off of the consumer's credit report. You can dispute inaccurate information on a credit report with the credit bureaus by telephone, mail, or online:
Experian's National Consumer Assistance Center P.O. Box 2002 Allen, TX75013 1-888-EXPERIAN
Equifax Information Services LLC P.O. Box 740256 Atlanta, GA30374 1-800-685-1111 TransUnion Consumer Solutions P.O. Box 2000 Chester, PA19022-2000 1-800-916-8800 The US Federal Trade Commission recommends including the following information in a dispute letter:
- Your complete name and address
- Clear identification of each item in your report that you wish to dispute
- State the facts, provide an explanation of why you dispute the information
- Request that the information be removed or corrected
- Indicate what documents you are enclosing
- A copy of your report with the disputed items circled (optional)
- Send your letter by certified mail, and request a "return receipt"
- Also, keep copies of your dispute letter and enclosures
Sample dispute letters
How to negotiate with creditors
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