Yesterday, a client called and asked about refinancing, so the first thing I did was run his credit and his wife's credit, because they're co-borrowers. Within seconds, I see the wife has a 730 FICO score, but the husband is lower, at 719. They're both still high enough to qualify for the best rates, but just barely.
"Let's see what's dragging you down," I tell him, and then, as I scan the readout, "Uh oh, you have 10 late payments. On an auto lease. That you paid off in 2006."
Of course, he flips out. He says he has no idea why Bank One reported 10 lates. So I say, "We have to get them off your credit report." Then I tell him how:
The first thing I tell the client to do is to dig out proof that he paid that auto lease bill during every single month that the payment was reported late. Next, I tell him to make copies of the canceled checks—or in his case, all the old monthly checking account statements that list the online payments his bank sent—and to send copies to the creditor along with a letter requesting removal of the delinquents.
I tell him to send a letter with the standard wording I tell all my clients to use:
Dear So-and-So, Recently when my credit report was run, I found you reported this account no. xxxx as delinquent. As you can see, by my attached records, this account has never been late. All payments have been made on time. Please stop reporting this account as delinquent and send me evidence you have done so. Please feel free to contact me directly with any questions. Thank you. Sincerely.
You want to get a letter from them saying they're taking it off. That's the holy grail. The phrase "send me evidence" is key.
By law, the creditor has to respond within two weeks. If they say, "No, it was late," then at least you have something to argue about. But they might just go ahead and correct it, because the payments were made, and you have so much evidence that you made these payments that they'll have a tough time arguing about whether the payments were late.