Have you recently applied for credit but were turned down because of a default notice on your credit file? If you have loans with banks or other financial institutions and you do not make your payments, you are considered to be in default. Creditors are required to send you a notice when you are behind in your payments.
This notice is to tell you that if you do not bring your account current they put a hold on your account and may place a default notice on your credit report. This is a pre-default warning notice.
The default notice is placed there to let other financial institutions know that you are in default on your payments to them. If you apply for credit with this on your file you will be turned down. This negative mark on your credit report will keep you from being able to get any kind of credit. This notice is placed on your file and stays there for six years. Only under certain circumstances can this notice be removed.
To have this notice removed from your file the bank must have failed to issue you a pre-default warning notice. If the default notice was placed in your file without previous notice then the bank is in violation and the notice must be removed. Another reason the notice could be removed would be if the debt is several years old and the creditor is unable to give you copies of your signed agreement proving you are in default.
Some companies may not have files saved before a certain year and if no copies are available the notice must be removed when challenged by the debtor. In either case you should follow these steps to make sure you are following proper procedure.
First things first: check your Credit Report
Check your credit report at least once per year. Mistakes do happen and you only have a limited amount of time to dispute some entries before they become permanent. Get a free online copy of your credit report by doing a Google search for “free credit report”. You pay a yearly membership fee and get results from all three credit reporting agencies joined in one report. You will also be notified when you are eligible for another free report.
Checking your credit report will also give you the name and contact information of the creditors that have placed the default notice.
Contact the creditors who have applied the default notice(s)
When you have obtained the necessary information call the creditors and ask them for information about the default notice. Ask them when the pre-default warning letter was issued and what address it was sent to. Take notes during the call and ask for the name of the person you are speaking to and record the date the call was made.You can ask to have the notice removed but most likely they will refuse. They may also try to get you to settle the debt by paying but this will only revise the default notice to show that you made a payment it will not remove the notice. You must put your request in writing to have the notice removed.
Write the company a letter asking them to send you copies of your signed loan agreement, a copy of the default warning letter and any other documentation proving the validity of the debt. The company has 30 days to respond to your letter. They may refuse to send the information but remind them that they are legally required to do so. If they have not responded in 30 days send a follow-up letter threatening them with legal action.
They may remove the notice not wanting to face violation charges in court.
