A 611 letter is also referred to as a pay-for-delete letter and it is a method that can be used to eliminate information from your credit report once an account has been charged off. Here are the things that you should not forget when it comes to 611 letters and the ways how to use them.
What is a Charge Off and What does it mean when a company uses it
If you, for instance, do not meet the payments on the credit for a long time say 120-180 days, the creditor will likely charge off the account. This means that the company has written off the debt and depreciated it as an expense, which is not true.
However, if the creditor decides to write off the debt to clear the account in the books, you are still legally bonded by that debt. They can pursue the debt from the creditor or any other debt collection agency provided to recover the debt. The bad records are reportable to the credit bureau for up to 7 years from the time of the first missed payment.
What is a 611-letter
FCRA section 611 mandates CRAs including Equifax, Experian, and TransUnion to take reasonable measures to verify information that was disputed by consumers. Should the agencies conclude that the information under dispute is false, misleading, unreliable, or stale, then they are required to expunge or amend it.
This is where a 611 letter comes in in response to the TP’s refusal to provide goods and services to an individual. A 611 dispute letter is a written communication through which you formally request the credit bureaus to review your reports and specifically the charge-off entry. In today’s letter, you mentioned section 611 as your reason for disapproval.
It is to try to negotiate with the original creditor to delete the record of the charge off with the credit bureaus or change the status of the account in consideration of the amount of money paid. This effectively makes them ‘disappear’ or be removed from your credit history where they originated from.
What is the Reason for Sending a 611 Letter
Successful 611 letters can help to increase credit score, while charge-offs have a very negative impact on it. Here are some key benefits of getting a charge off deleted from your credit reports: Here are some key benefits of getting a charge off deleted from your credit reports:
- This will be good for your credit report because the charged-off balance is now deleted, hence increasing your credit utilization ratio. This ratio forms 30% of the FICO credit score.
- This means that paying off your credit card will make it appear that there are fewer late or missed payments if the whole tradeline has been removed. Payment history is another factor that may also affect your scores in a very significant manner.
- For up to seven years you don’t have a major derogatory mark on your credit history.
- This means that one gets the opportunity to receive an instant credit score boost of up to 100 points and above.
Fewer instances of credit checks will get you approved for loans, credit cards, rentals, and all those services that check your creditworthiness.
In summary, a 611 pay-for-delete agreement can be a wonderful tool to increase your credit wellness by changing charge-offs that are hampering your scores. Just be sure to not settle for insulting amounts and to always obtain any agreements for removal in writing before making the payment to the collector or the original creditor.
After reading this article, one would understand how to write an effective 611 letter.
Follow these steps when drafting a 611 dispute letter:
- Know the charge-off accounts that you want to challenge – You need to obtain your credit reports to get a full credit history list and focus on charge-offs. Any old, false, or unsubstantiated credit reference that needs to be targeted in the credit report.
- Find out the address to write to the credit bureaus – Each of the bureaus should receive separate letters of dispute from you. The address of each bureau can easily be searched from any point in time.
- Write your 611 letter – It is recommended that your letter be addressed to the credit bureau you are sending it to. Quoting Section 611, make a formal request to investigate the listed charge-off inaccuracies.
- Give your name – State your complete name, the address where you are currently living, your social security number, and your date of birth to ensure they link your letter to the credit file.
- Write account details – This includes the name of the creditor, account number, account opening date, and the amount as well as the date when the charge-off was made. The bureau will need this to find the tradeline in question for the credit report of that individual.
- Describe why you’re challenging it off – This is where you should explain why you think this particular charge off should be eliminated or altered. Some of the reasons that creditors give are that you never in fact ever opened the account, the information provided in your credit report is misleading or inaccurate, or that the account is too old to be collectible.
- Request the negative entry to be permanently deleted – If the bureau investigation was unable to verify the information, misleading, outdated, or false you should formally request that the negative item be permanently deleted from your credit file.
Retain photos/photocopies; send original letters – Ensure that you retain photocopies of the letters you write and send the original ones via certified mail, return receipt requested. This provides delivery confirmation.
Writing to Follow up if Your Dispute is Rejected
However, if the credit bureau replies that the dispute you have made is frivolous and cannot be removed from the charge-off list, you still can take further action. Consider these next steps:
- Request reconsideration if you are organizing a lot of evidence to support the removal. Or attempt argumentation once more but with more details.
- The next step is to get in touch with the creditor who initially sold the debt or the debt collector and negotiate a pay-for-delete deal. Suggest that they make a partial payment of less than the total amount due if they request the credit bureaus to delete it from your credit reports. Never agree to pay even a single penny without first getting the deal in writing.
- When talking to the creditor, one should ask the creditor to change the account status from “charge off” to “paid” or “settled. ” It will not erase it but can reduce the effects.
- The complaint should be made to the Consumer Financial Protection Bureau (CFPB) arguing that the credit bureau did not investigate the dispute properly. The CFPB might use pressure to ensure that doubtful listings comply with all the necessary regulations.
It is recommended that the declarant maintain the pressure when sending the letters by continuing to send them repeatedly. But the good news is that with little effort one can even delete the verified charge-offs in the long run. It is enough to challenge and formally appeal to section 611 of the Civil Procedure Code only.
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