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Can I create a new credit file with another Social Security Number?

Using an alternative social security number (usually an EIN or employee tax identification number) was once a common strategy employed by credit repair companies. Federal law later made it illegal to perform these "file segregations" as a business. The technique is called "file segregation" because by using another social security number and new identification you cause the credit bureaus to generate another report for a person that doesn't really exist, and then use that new report to obtain credit.

Does the 7-year limit start over after paying a debt?

Under the old Fair Credit Reporting Act (FCRA), credit bureaus would start the 7-year cycle over again when the consumer decided to pay off a negative account. This created a catch-22 since it provided little incentive to pay the debt.

What if a creditor refuses to delete an item?

A creditor or collection agency can delete any item that they originally reported to the credit bureaus. While some have agreements with the credit bureaus not to settle on the condition of deletion, they will come around if you persist. Keep negotiating. Always operate on the premise that somewhere in the organization there is at least one person able and willing to settle. If deletion is a must for you, hold out until you get what you want.

Can I settle with the original creditor?

Once an account is forwarded to a collection agency, the original creditor to whom the debt is owed will usually refrain from discussing the debt with you directly. Because a collection agency receives compensation on collected debts only, they typically have an agreement with the creditor under which the creditor is required to refer the debtor back to the collection agency.

Generally speaking, a collection agency is more inclined to negotiate than is the creditor. If you want to settle, deal with the collection agency.

Can I get collectors to stop calling me?

Yes. If you send a letter demanding that a collection agency stop calling, they must honor your wishes. However, this does not barr them from pursuing legal action against you, nor will they be prohibited from reporting the negative information to the credit bureaus. A collection agency typically seeks other means of collection rather than return the account to the original creditor.

Note that a collector calling from the original creditor is not required to cease communication. The rule only applies to third-party collection agencies.

Can a collector force me to pay?

Generally speaking, once a creditor seeks a judgment against you they can collect in one of several ways: garnishment of wages, liens on property, attachment of bank accounts, or seizure of property. Most often, creditors will not attempt these methods of recovery simply because they are too expensive. Most collectors will not incur the costs to chase a "dime with a dollar."

Note that not all states allow these methods of recovery. Since these rules vary from state to state, you should consult a local attorney for the final word.

What if I dispute a debt and they ruin my credit?

Please see the section entitled Do it Yourself for information on how to repair or restore your credit.

What if I dispute a debt but they still come after me?

If you don't agree that you owe a debt, you must first notify the creditor or collector in writing. In your notice request copies of any proof that you owe the debt, such as a signed contract or promissory note.

If the debt is part of an open-ended charge account such as a credit card, and if you contact the creditor within 60 days of receipt of the bill, then certain rules apply under the Fair Credit Billing Act that can work to your advantage.

What can I do if a credit bureau won't fix a mistake?

For starters, dispute the inaccurate information with each of the credit bureaus reporting the information. Prepare for the worst. If the information appearing on your credit report is truly inaccurate they will probably verify the information anyway, especially if the listing is more serious as in the case of a bankruptcy.

What if one bureau removes an item but others do not?

The credit bureaus work entirely independently of one another. Although new federal laws require that the credit bureaus communicate changes to one another, in practice this is more the exception than the rule. For all practical purposes, you should assume that you must get each negative item deleted three times.

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