The following is a guest post by Larry Klein. He found an innovative way to end his credit bureau dispute fast and in his favor. Let’s check out Larry’s story.
If you have a credit bureau dispute it can drive you nuts. You probably didn’t do anything wrong but the bureau reports that you did. You show proof that they made a mistake yet they do nothing to correct the error. It’s like you are talking to a wall. Besides frustrating the heck out of you, mistakes like these can really be costly:
a. False dings against your credit still hurt your credit score. That means it can be hard to buy a home, a car or get an education or a job.
b. If you have a lower credit score you’ll have to make higher monthly payments on everything you buy on credit. That could run into hundreds of dollars that are just wasted every month.
This problem is not benign.
Their System Is Your Problem
When you report that there is a mistake on your credit report the bureaus (King Rat) just take your complaint and pass it along to the creditor. That means they email the bank, lender or retail store and wash their hands. The creditor typically sends a notice back to the credit bureau saying that their records are correct and that there is no error. That’s the end of the story. If you are the consumer in this case, you’re out of luck.
That’s why all those internet posts that tell you to contact the credit bureau to fix credit errors aren’t all that helpful. The credit bureau is powerless to do anything that the creditor doesn’t tell them to do.
If you read between the lines, you’ll see that if you want results, you have to go to the creditor rather than the credit bureau. That’s where you need to apply the muscle.
How To Get The Creditor To Listen
This is the key. Unless you put some elbow grease into this, the creditor isn’t going to give you the time of day let alone fix an error they made. They’ll just tell you that according to their records the report is accurate. It’s enough to drive you postal. I know because it happened to me twice.
Once American Express tried to pull this on me. Another time it was Citicorp. In both cases I wasted several months trying to fix the error using their system like a good consumer. First I contacted the credit bureaus and then I went directly to the creditors. I even hired a legal firm which advertises that their “specialty” is fixing credit report error problems. All they did was replicate what I had already done. That was extremely frustrating and I was about to give up. But I decided to give it one last try.
I sued the creditors in small claims court and it worked. It was much easier than I thought it would be too. I got my credit report fixed in less than 60 days. I also received $2,500 from Citicorp as a settlement. Cool beans.
Neal’s Notes. Larry is a sharp cat and I’ve known him for years. He’s written a nice little e-book on how to use the small claims court process to get your credit report fixed. I read through it and it has some golden nuggets that make it very worthwhile if you are struggling with a dumb creditor and credit bureau who won’t fix a mistake. I do want to mention that I am an affiliate of this product and if you purchase it, Larry is going to throw me a few shekels. That being said, I think it’s worthwhile and a small investment to make with a potential large payoff.
This solution of using small claims court is tremendously effective for several reasons:
- It is fast. It takes maybe 4 hours of your time compared to weeks and months of delay when you do this the old way.
- In some states, the creditor can’t get rid of you easily as they would like. Normally, their legal department handles formal complaints. But in a few states, their overpaid lawyers are not allowed in small claims court.
- This means that the creditor has to respond to your suit with non-legal employees. This is a pain in the rear for them and it costs them a lot of money. They don’t have a system for this and they don’t have time for it. As a result, many creditors wake up and just fix your credit report.
- Even if your state allows lawyers to respond they have to come in for a hearing and they don’t want to do this. Your creditor doesn’t want to fly out a high-priced lawyer and incur all those costs. Again, a law suit gets the ball out of their court and out of their system. When you go this route it makes it very attractive for your creditor to play ball with you and fix the darn error.
- When you file a formal legal action it gets the attention of the people who matter. Until you take that step you have to deal with low level bureaucrats who have no interest in fixing the problem. All they want to do is fill out their time sheets and get home to watch Scooby Do reruns.
- But once the right people get wind of the problem they realize the best course of action is to just take care of it and fix your report.
- It is cheap. It will cost you less than $100 to file your small claims suit. As a result, you’ll get the attention of the right people and make yourself a thorn in their side. It’s a fantastic trade-off.
Bringing a small claims law suit is an easy process but you have to make sure to do it correctly. Unfortunately you can still waste a lot of time and money if you don’t complete the court paperwork right. You have to file your claim correctly, get your claim to the right people (this is key but it’s often overlooked) and follow up at the right time and in the right way. That’s what I learned when I had to fix my credit report. Despite these hurdles, suing a creditor in small claims to fix your credit report is absolutely the best way I know of to get your credit report disputes taken care of.
Have you ever encountered this problem? How did you fix your credit report? How long did it take?
Kinecia Aly says
Hi, I mailed dispute letters with my drivers license and social security card copies attached to all 3 major bureaus via certified mail with returned receipt. January 22, 2018 equifax received the disputes. January 26, 2018 I called to ensure everything was going well, they say yes we received your disputes and it is in process. Well, I noticed my scores hadn’t updated since January 28, 2018. Fast fwd to February 14, 2018 I call Equifax and they say they have no credit file for me and ask if my creditors actually report to them! I spoke to 7 people. 8 now because I’m on the phone as I am typing. I disputed negative items but I still have student loans reporting that are in good standing. They can’t tell me anything. Also my information was compromised in their breach. Can I sue them?
Neal Frankle, CFP ® says
In your place I’d consult with an attorney or read this:
Victoria Ayon says
I was wondering if I could sue the credit reporting agencies, as in the mid to late 90s I had my credit froze my score was 720 out of a possible 750 I wanted to buy a home. My identity was stolen twice in the late 90s and 2000s of I found out about it in 2008 I called CRA to inquire about what I should do they suggested I get a new ss number and they would look into it well here it is almost 10yrs later and they haven’t done anything and it is beginning to piss me off.
Neal Frankle, CFP ® says
Why did you wait so long?
Ed Johnson says
what is the link to purchase the book that Larry wrote, and you are getting an affiliate check for? Thanks, I would like to buy that book…
How do you establish an amount to claim in a small claims suit under $5,000. I owe 900.00 to a creditor and have paid them faithfully every month. They negatively reported on my credit report because they said “I didn’t commit to a payment agreement”.
Can I sue for more than the 900.00?
Neal Frankle, CFP ® says
If you can prove damages, it might be possible to sue for more than $900 but I am not sure. What are your damages? Typically, you can sue to make them fix the report and that’s it. Here’s a good source for more info