Inmate Credit Repair, Build, & Maintain Good Credit While in Prison

by  Ask the Inmate

Credit is the track record of trustworthiness as viewed and documented by three regional independent credit reporting agencies.  These agencies are the go-to facilities where ALL areas of credit allocation are measured and subsequent decisions to grant credit or not are based.

Good credit is essential because so many things we want to buy must be financed.  Whether it's a home, car or even qualifying for a job (as most employers actually look at your credit report before hiring you), good credit is something you must have. Being in prison and working to maintain a good credit score can be challenging. Therefore we have assembled some easy references for you to use without actually paying a service to do it for you.  These are some easy steps to follow, but be mindful that the process is long and you must remain diligent in following up.  Credit repair agencies make their money because of the amount of time required to follow-up and they know how to navigate the minutiae of paperwork necessary to deal favorably with the agencies and improve your credit score.

1) Get a copy of your credit report by contacting the three major credit bureaus. Be sure to include your full name, address and social security number. They will mail your report to you (or to someone on the outside that you have designated) in prison, but you will need some documentation from your counselor or unit team manager that avows that you are who you say and that your identity is protected. You’re entitled to free credit reports from each of the three credit bureaus each year. Make sure you contact all three since not every account is always reported to all three.

Equifax Credit Information Services, Inc
PO Box 740241
Atlanta, GA 30374
800-685-1111

Experian
PO Box 2002
Allen, TX 75013
888-397-3742

TransUnion
PO Box 1000
Chester, PA 19022
800-888-4213

2) Once you have received all three reports from Equifax, Experian and TransUnion, read all of the information carefully and cross reference the accounts across the three bureaus. If you find false information in any of the three reports, contact the companies immediately to officially dispute the record by writing to them and informing them it is not accurate.  They will then contact the creditor on file for a response. If none is given, the information will be removed from your credit report. 

The Fair Credit Reporting Act (FCRA), 15 USC sections 1681 - 1681t, protects you against credit abuse that might result in unfair description of your creditworthiness. Knowing your six basic rights is essential if you are going to erase negative marks off of your credit report and regain a good credit status.

Right #1:  You are allowed to challenge the accuracy of your credit report at any time.

Right #2:  The credit bureau(s) must investigate in good faith anything that you challenge

Right #3:  The credit bureau must re-investigate the disputed information within 30 days (as a matter of law). There are exceptions to the time period if the bureau requests additional information

Right #4:  If the credit bureau cannot confirm the adverse information or finds any errors, it must promptly delete that erroneous information from its files

Right #5:  If the bureau cannot or does not confirm the information you have challenged within a reasonable amount of time, it must also delete that information from your files.

Right #6:    If a creditor verifies the information and the bureau responds in a timely manner, the negative marks must remain on your record.  But if you maintain that the information reported is in dispute, you have the right to submit a Customer Statement of your view of the problem.  If you, as the credit consumer dispute the accuracy of certain information in your report and receive no satisfaction from the bureau or the creditor, then the credit bureau is by law required to attach your explanation to every copy of the report it sends out.  If you ask for assistance the bureau will help you write your statement of 100 words.

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When negative information in your report is accurate, only the passage of time can assure its removal. A consumer reporting company can report most accurate negative information for seven years and bankruptcy information for 10 years. Information about an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer. Use the sample letter below to dispute inaccurate information in your credit report:

Sample Dispute Letter

Date
Your Name
Your Address,
City, State, Zip Code

Complaint Department
Name of Company
Address
City, State, Zip Code

Dear Sir or Madam:

I am writing to dispute the following information in my file. The items I dispute are circled on the enclosed copy of the credit report that I received.

This item (identify item(s) disputed by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment, etc.) is (inaccurate or incomplete) because (describe what is inaccurate or incomplete and why). I am requesting that the item be deleted (or request another specific change) to correct the information.

Enclosed are copies of (use this sentence if applicable and describe any enclosed documentation, such as payment records, court documents) supporting my position. Please investigate this (these) matter(s) and (delete or correct) the disputed item(s) as soon as possible.

Sincerely,

Your name

Enclosures: (List the items/documents you are enclosing.)

3) If you are delinquent on any of the accounts, this will need to be resolved before you can move forward on any of the additional steps below. You will need to write to each company listed. Explain that you are incarcerated and may not be able to pay the full amount. Ask them what, if any, options they will provide you to help you settle the account as paid. It is not unlikely to receive a settlement offer. For example, if you owe $1,000 on a debt, the company may offer to settle the debt for $200. This option is not always given, but it is more likely that they would work with you because you are incarcerated, and their ability to collect is hindered because of this. The company may request that you pay the entire settlement at the same time, or they may offer terms for a payment plan. If you are delinquent on any accounts, it's a win for both sides. The company is able to collect some money, and you are able to improve your credit. See a sample letter below:

Sample Settlement Letter

Date
Your Name
Your Address,
City, State, Zip Code

Complaint Department
Name of Company
Address
City, State, Zip Code

Attention: (name of collector or collection agency)
Address

RE: Collection letter dated (date of letter here) or phone call on (date of call here) reference account #: (account or reference number)

Dear Mr./Ms. (Collector's or Collection Agency's Name)

I do not agree that I owe as much as you claim I owe on the above referenced account. In an effort to save both of us a great deal of time and expense I am offering to settle this account for $ _______.

If you accept my offer, please send written confirmation to my address listed above. Once I receive your written confirmation, I will mail full payment to your organization within thirty business days. (Please note that prison checks take time to process.) If you wish to discuss this settlement offer, please write to me at the address provided. Because I am incarcerated, you cannot reach me by phone. Regardless, please understand that I will not make any payment until receiving written confirmation that you accept my offer.

Sincerely,
Your name

4) Once you have any prior financial obligations under control, it's time to look at what you keep and what you get rid of. Do you have any active credit cards? If you are looking into closing some credit card accounts, try to save your oldest accounts, even if you only save one. The longer you have an account, the better it looks on your credit report. If you are looking to close the account because of higher interest rates or annual fees, try contacting the card issuer to see if they would waive the annual fee or reduce the interest amount. If they know you're serious about leaving them, they may be more apt to work with you, and it benefits you to keep those older accounts open.

5) If you do not already have one, open a savings account in your name. Try to make deposits to it each month no matter how small. Never remove money from it if at all possible. The time you have it open, the frequency of deposits and your ability to not make withdrawals from your savings account may not directly impact your credit score, but it could directly impact your ability to make a large purchase on something such as a home or a car one day. You can't go wrong by starting and building a savings no matter how small. Please note that some banks require a minimum amount of money to be kept in your savings account. Also, many banks offer better interest rates as you put more money into savings. Please check to be sure that you are not in a state that attempts to "collect money for incarceration". Some states will come after your money if you have any to pay for incarceration costs. This is an unfortunate practice that can keep incarcerated people from ever rebuilding their lives. Please be sure you check before opening a savings account.