Today I will tell you about a very little known secret on how to increase your credit score (FICO). The only downside of this tip is that it will only those of you who have been delinquent on their payments and are now being pursued by collections agencies. It also won’t always work, but when it does it can make a very significant difference. According to a recent Business Week article, it helped one person increase his FICO score from 513 to 600!
The idea behind this tip is based on a stipulation in the Fair Credit Reporting Act. It basically goes that for a creditor to list you as delinquent on your credit report they must be able to provide you with the original paperwork. Now what happens with collection agencies is that by the time someone is trying to collect from you, your defaulted loan has probably already changed hands a few times, and because of this the ORIGINAL paperwork is likely to be lost. If it’s lost, then by stipulation of the Fair Credit Reporting Act your defaulted obligation cannot be listed on your credit report. You’ve basically wiped out your defaulted obligation!
Again, as you can see, this tip will only help those people who’ve defaulted on previous obligations. And the more the obligations have changed hands, the higher the probability of this tip’s effectiveness!
Related Article: 7 Simple Tips And 5 Secrets to Increase Your Credit Score