Credit Repair 101: Stop disputing your credit

Phoenix Star Loans: In this age of technology, we've become spoiled as a group, and we're impatient as hell.  We want everything...

In this age of technology, we've become spoiled as a group, and we're impatient as hell. We want everything now; instant gratification for whatever happens to be ailing us at the moment. This fact is especially the case when it comes to our credit when we've decided it's now time to buy our first home.

At some point along the way, some moron suggested online that disputing your negative credit items was the way to solve your credit issues. Well, I'm here to tell you that this is a load of BS.

Before we go on to the topic at hand, there are a few things that you need to realize:

  1. It doesn't matter why your credit is lousy; ALL credit is repairable.
  2. There's no ‘quick fix' to your credit profile.
  3. Disputing an account does not negate the fact you owe the debt, nor does it remove it from your credit report.
  4. There's no trick you can learn or program that you can buy to erase negative information on your credit report miraculously.
  5. With the proper guidance, you can repair your credit yourself, FOR FREE.

Again, there is no magic pill. The ONLY WAY to repair your credit is to be diligent and take your time to reverse the damage. To do that, you need to know how to do it the right way. Credit repair companies do NOT repair your credit; they make it worse, so don't go there. If you want to buy a home, you MUST follow the credit advice of someone relevant to your end game; and that person is a licensed and experienced mortgage broker. Only they can advise you on what is and isn't a deal-breaker to an underwriter when it comes to your credit profile.

At least three times a week, I have to tell a client that they can't buy a house right now because we need to work a little bit on their credit first. The reason they have to wait to buy a home is for one of two reasons. One, they've hired a credit repair company that's disputed all of their accounts. Or, two, they've on their own went into their credit profile and marked all of most of their accounts as disputed.

The credit bureaus created the dispute process to help those that fell victim to fraud, identity theft, and circumstances such as that. The dispute process is not for people to use just because their credit card company pissed them off, or, that don't like the fact that a medical collection pulled down their score.

As much as you probably don't want to hear it, here are the facts. Companies that report to the credit bureaus are highly regulated. Although reporting errors do happen, they are rare. If something is reporting on your credit report, it is with near 100% certainty that it's correct, it is valid, and you owe the money.

Ok, so with that established, if you want to begin working on repairing your credit profile so you can buy a home, disputing is not the answer. Here I'm going to show you how to clean up negative items on your credit the proper way.

Collection Accounts

Collections are accounts you haven't paid, and the original creditor has sold your debt to a collection company. What's most damaging about collection accounts is how they get reported to your credit profile. Collection companies submit your collection debt every month as if it were a brand-new account. Because of this practice, plenty of people who should have a 700 credit score instead have credit scores in the 500 range. The longer these accounts stay active, the farther down your score will go, so we need to get rid of some of these as quickly as possible.

Dealing with collections may seem like a daunting task, but it's not if you go about it in a specific and systematic way. The best and easiest way to handle these types of accounts is to tackle them one at a time, starting with the smallest balance.

When you have funds ready for payment, call the collection agency using the number on the credit report. When you call, tell them you want to pay the account in full right there over the phone, and in exchange for that, you want the account hard deleted from your credit report. A hard deletion means what it sounds like.., it disappears as if it never existed. Most collection agencies will do that for you if they're getting full payment during your call. Even if they're not able to delete the account, they'll at least mark it as paid in full. In either case, ask them to send you a confirmation letter of your agreement, but always request a hard deletion first.

When you get a collection account hard delete, the adverse reporting stops, but all of the past negative reporting for that account disappears as well. This fact is why you want to strive to get as many hard deletions as possible. For the accounts with the higher balances, if you do not have to funds to pay them in full for a hard delete, then you want to at least settle them for a portion of what you owe. Most collection companies will mark the account paid if you offer them a reasonable settlement amount over the phone right during your call.

Pay to delete as many accounts as you can, then settle the rest of them. Avoid payment plans at all costs; you want the adverse reporting to stop ASAP, so you want to settle out the accounts during your first phone call.

I recommend making sure you have close to the full amount before you call. That way, if they won't accept the lower amount, you have all of the funds for a deletion.

I also recommend that you do not play games and try to ‘wheel and deal' with these collection companies. Be reasonable when you make settlement offers. Settling a $300 account for $250 is entirely fair. Trying to pay a $1000 account for $50 is not going to happen, so don't even try it. If you're serious about getting your credit affairs in order, don't play games.


Charge-Offs are either installment loans or credit cards that you haven't paid. The creditor gave up on you and closed out the account. The account is no longer available to use, but the creditor keeps reporting each month that your account is delinquent.

Let's say you had a Capital One account back in the day that, for whatever reason, you stopped paying. Even though the account closed years ago, Capital One has been reporting you late every month. Most think that closed accounts can't hurt you, but this is a perfect example to the contrary. A closed and charged-off account damages your credit just as quickly as an open account can.

Clearing charge offs is essential, but unlike collections, these accounts do not have the hard delete option. Original creditor accounts, such as my Capital One example above, will not under any circumstances get hard deleted from your credit report. This myth is a BS story credit repair companies will tell you, and it's a total lie. Original credit accounts fall off your credit profile after 7 or 10 years automatically per law.

The proper way to handle original creditor charge-offs is to either pay them in full or, if the balance is just too high, then agree to a settlement amount. As with the collection accounts, you want to start with the charge-off that has the smallest balance. For example, let's say this Capital One charge-off is $300. Call them and offer them an amount to settle that day over the phone…, for instance, for $250. They will very likely agree and, in exchange for your payment, will mark the account ‘settled for less than the amount due.' Although the account will not get deleted, your credit score will start to rise because Capital One is no longer reporting adverse information to your profile each month.

Getting approved for a home loan takes more than a particular credit score. In fact, plenty of people with 700+ scores cannot qualify for a home loan.

What's on your report is more important than the credit score itself. Taking steps to make sure your credit report is clean and free of disputes is hands-down the best thing you can do to help yourself.

I hope this information was helpful! Feel free to contact us if you have any questions; we're happy to help!

If you have questions about any part of the mortgage process, feel free to contact us.

Wendy Ruhlig
Cell: 321.794.5626
Facebook & Instagram: @wendyruhlig
Havana Romaine
Cell: 321.704.3154
Facebook & Instagram: @havanaromaine

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