Okay, so you’re about to apply for credit and there are some negative items hurting your credit. And you know that because of this stuff you are going to either be turned down flat or you are going to pay through the nose.
So what can you do?
A Simple Trick To Boost Your Credit Score
Under the Fair Credit Reporting you can challenge negative information on our credit report. You probably already know that. The process is totally free and it takes 30 days or less.
Okay, here’s what happens when you file a dispute with the credit reporting agencies Equifax, Experian and Trans Union. The bureaus are required by law under the Fair Credit Reporting Act to tag the item you are disputing as “in dispute.”
The "XB" Code
So when you dispute an item on your credit report an “XB” code is placed on the problem credit item by the credit bureaus. What XB means in simple terms is that the credit bureau received your dispute and it is actively investigating the information you are challenging. And it attaches and XB code to the item.
Now, here's the why triggering an XB code can boost your score. You see, when the XB code is attached to late payment, charge off, public record, or collection, the FICO credit scoring system treats the account differently than it would if the account was not in dispute.
And the cool thing is that while the account is in dispute and the XB code is attached, your credit score will not be harmed by the XB coded item. For example, if you have a credit card account with a high balance, and it’s lowering your credit score, you can dispute the balance and FICO will not consider the high balance. If you have a 60 day late payment and you challenge that negative item on your credit report, the late payment will not affect your credit score - good or bad - while the XB code is attached to it.
Now, here is the “catch.” Timing is everything. You have only a limited window of opportunity until the negative item is investigated and the problem credit starts lowering your credit score again. You must time the dispute so that it takes effect while you are applying for credit.