Watching: Lexington Insider: A look at disputing your credit.

Hello, I'm Gavin the Credit Coach and this is the first in a series of videos called “Lexington 360” – a three-hundred and sixty degree look at the inside workings of the nation's largest and most well-established credit correction law firm. In this series we'll explore the three major components of the Lexington Law service, and we'll take a look behind the curtain to see how it's all done.

Today, we'll be focusing on the backbone of any good credit correction effort – credit bureau disputing. As you may already know, your credit worthiness is one hundred percent dependent on a three digit number – your credit score.

Generally speaking, a 700 credit score is the bottom-limit of traditional credit worthiness. Anything below that and qualifying for credit is difficult and expensive.

Your score can be hammered down by bad marks such as:
Negative listings including late payments
Judgments, collections, bankruptcy
And even creditor inquiries.

Addressing a low credit score is more complex than most people think. Removing negative listings is important – but it's not the only component of credit improvement. Lexington Law employs a three-prong approach.

The first prong involves the credit bureaus – these companies collect and house your credit information. Contrary to popular misconception, they're not part of the government and they're definitely for-profit companies.

By sending a series of carefully written dispute letters to the three credit bureaus, the firm works to trigger an investigation into the questionable negatives on the client's report. If the information is found to be inaccurate, or if the information isn't verified, then the negative items are removed or improved.

At the same time, if you're a Concord-level client, the firm conducts phased interventions with the creditors who reported the questionable information to the credit bureaus in the first place.

Many of these communications result in the removal of more questionable negative listings from the credit report – either because the credit company decides to give you the benefit of the doubt or because they cannot backup the information they previously reported.

If you're a Concord Premier-level client, the firm also goes to work with you on improving the host of other factors that also impact your credit score. We call those factors “scoremakers”. Removing negatives isn't enough to get maximum score impact. We must go deeper into the credit report to touch all the factors that will make up that all-important three-digit credit score.

These scoremakers include your “maxed-out ratios,” the amount of good credit, your account balances, your types of credit and even your credit inquiries.

As you can see, the Lexington Law Concord Premier service takes on all three of the major areas of your credit report and, therefore, all of the major factors affecting your credit score.

Today, we'll focus on the first piece of the Lexington pie: credit bureau disputing.

I'm here with the Lexington Law Attorney Roundtable and we're talking about credit bureaus and a person's right to dispute questionable, negative credit.

So, in a nutshell, what are a person's rights?

John Heath: You know, that's a great question. The American consumer has several rights available to them under federal statute to dispute items that are unverifiable, inaccurate, misleading, obsolete, and yes, even biased on their credit report.

Kevin Jones: One thing to keep in mind, is that it is the bureau's duty, or their burden, to prove that an item is supposed to be on a client's or individual's credit report. If they can't verify that the item is accurate, it must come off under federal law.

Gavin: As part of your service, you create dispute letters on behalf of your clients then you send them to the three credit bureaus. What's so special about your letters?

John Heath: Our letters are a result of several years of practice and experience. They're designed for specific purposes in dealing with the credit bureaus and items that may be inaccurate, misleading, unverifiable, obsolete and biased on your credit report.

Jeff Meyer: We're able to track the effectiveness of these dispute letters and we're able to adjust them if we notice that they're being not as effective. So we're able to change, we're able to adjust to the climate as we go. We have in the past, been able to see what works and what doesn't. And we take what works, and we put them in the letters, and what doesn't work, we take that out.

Gavin: Kevin, your thoughts?

Kevin Jones: We've been in this business for over 18 years. We've literally represented hundreds of thousands of clients with their credit issues. We've sent out millions of dispute letters to the credit bureaus with incredible success. We've been around for long time, we know what we're doing and we're going to be around for a long time to come.

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Let's see the process in action:

The credit reports are either sent in by clients are they arrive electronically at the firm's office or at one of the satellite law firms around the country.

Considering both the instructions of the client and considering the firm's proprietary dispute algorithm, listings are selected for dispute and some listings are selected to be disputed later.

Past experience has proven that disputing all questionable listings at once often triggers a “stall” response from the credit bureaus, so it's important to choose wisely which listings will be disputed and when. Then, dispute letters are written on the client's behalf and prepared for mailing or for electronic distribution.

Once the credit bureaus receive the letters, the clock is ticking. The bureaus must send notice to the creditors, the creditors must look into the client's dispute and then respond within thirty days. If any part of this hand-off fails, then the listings must be deleted or improved.

Often, this is a convenient opportunity for creditors to simply give the customer a second chance, especially if that creditor wants to maintain good customer relations. If the credit card or bank does nothing, then the negative listing is automatically removed and everyone is happy.

After thirty days, the credit bureaus' responses to the dispute letters should be on their way. Then, the process gets REALLY interesting.

Gavin: So what do you do if the credit bureaus or the banks decide to resist the client's request for the questionable negative listings to be removed?

Jeff Meyer: Well it depends. It depends on the individual circumstance. So, sometimes they are and sometimes they're not. And the thing that troubles me the most is that it appears to me that the credit bureaus have some sort of vested interest in keeping people's scores down, or perhaps by keeping negative items on there, because they do go to great lengths to resist efforts to try and get your negative listings off. The business and economics of it seem to supply an incentive for them to ignore your disputes – your legitimate disputes.

John Heath: As we discuss this, you can see that each case is very fact-specific, and has, certainly, different facts. And as any good attorney will tell you, there are, just absolutely, no guarantees. Except for one: That we'll work hard, for you, our client. With that in mind, you know there are negative listings usually removed. Certainly, we've had a great success rate, with our past clients. And again, we can promise that we'll work hard for you.

As you can see, there's a lot going on behind the scenes to make credit bureau disputing so effective.

Of course, as we mentioned at the beginning, credit bureau disputing is only one part of the full-suite of credit correction services. Tune in to the next two episodes of Lexington360 to see how the attorneys and experts of Lexington Law take credit repair “next level” with creditor interventions and credit score tailoring.

Until next time, I'm Gavin, your Credit Coach. And remember; together we can do this.