You’ve been taking good care of your credit. You’ve been diligent about paying all your bills on time, keeping your credit card balances low, and avoiding inquiries into your credit. Then suddenly, your previously good scores take a nose dive?

Two possibilities could be the cause of your troubles:
•    You’ve become the victim of Identity Theft
•    A ghost from the past has come back to haunt you

To learn which possibility is causing your credit score reduction, you’ll need to get a copy of your credit report and read it carefully.

Read the section that reports recent inquiries. If you haven’t authorized an inquiry, but someone has made a “hard inquiry,” it means that someone else is attempting to get credit in your name. Explore further, because they might be using your good credit at this very moment. Go over every account listed, checking to see that it actually belongs to you.

If you find an account that isn’t yours, contact the credit reporting agency and follow instructions for disputing the account. You’ll also have to file a report with law enforcement agencies, because you’re now an official victim of identity theft.

Something else you might find is an old ghost – in the form of a collection on a debt you didn’t even know you had.

This can happen when people move and mail is not correctly forwarded. Utility companies send a final bill but payment is not forthcoming because you never receive the bill.

After a while, your account goes into their bad debt file and because utility companies don’t routinely report to the credit bureaus, it never shows up on your credit report. Then, perhaps years later, the debt is sold or forwarded to a collection agency. They still don’t have your current address, so don’t write you. Instead they report it to the credit bureau under your social security number.

The good news is that an old debt such as this is far easier to resolve than identity theft.

First contact the supervisor at the collection agency. Explain that this debt came at you out of the blue and that you intend to pay it off. Ask to have it removed from your credit report in exchange for prompt payment.

Of course, if you believe the debt is not valid, you’ll need to send a request for verification. Use certified mail, with a return receipt requested. If you still believe it is not a valid debt after receiving their response, dispute it with both the collection agency and the credit bureau that reported the collection.

If the bureau can’t confirm it as a valid debt, they’re required to remove it from your credit report.

CreditScoreQuick.com

This entry was posted on Wednesday, July 27th, 2011 at 8:59 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.