What Can You Do to Improve Your Credit Score?

You have several options for improving your credit score. 

Take a few minutes to see what you can do!

It seems like everywhere you turn you see an ad about your credit score. 

Some of don't just offer to get your credit score (for Free or small monthly fee), but also may claim to be able to improve your credit score dramatically in a short period of time.

credit_denied.jpg

Although there are several companies that will provide you with a Free Credit Report, did you know that we all can get a FREE CREDIT REPORT annually?

So, you don't have to go through a third party company or pay for this service if you don't want to.

But let's say that you already have your credit report and not only is your credit score a little lower than you thought it was, you also see some errors on what is being reported.

What can you do to improve your credit score?

Before we get started, you must understand that a credit report is nothing more than a snapshot of you credit history at a particular point in time.

Lenders rely on the information contained in a credit report to determine if and how much money they are willing to loan you.

I wrote an article/blog recently addressing the concept of "Pay for Deletion" on a credit report.  Basically, you offer a creditor or debt collector a sizable settlement to not only settle the account for less than the balance, but also to delete the account from your credit report.

I'm not going to get into that here, but if you'd like more information, click on my blog link above.

There are several factors that go into calculating our credit scores:

Payment History, which accounts for about 35% of your credit score.

The first thing any lender wants to know is whether you've paid past credit accounts on time or are late or just have not made any payments in a long time!  Your payment history is very important!

How much Credit are you paying on now?

Just because you have credit accounts now doesn't necessarily mean that you cannot get more credit.  But, if you have $25,000 of available credit and have used up $20,000 on various credit accounts, you are using 80% of your available credit now and may not be able to get more.

How long have you been using credit?

To a lender, the longer you have been using credit, and more importantly, how you have handled your credit in the past, gives them a pretty good idea of how you are going to handle the credit you are applying for now.

What type of credit are you using?

Your credit score takes into account the various "loans" you have, such as:

  • Mortgage
  • Auto
  • Student
  • Revolving, etc.

New credit, or actually, too much new credit, may hurt you credit score.

Beware of opening and/or applying for too many new credit accounts in a short period of time!

Many people believe that opening several credit accounts (store cards, credit cards, etc.) will help them get better scores.  Actually, this is a negative!

If you have a couple or even a few cards or accounts, don't try to get too many more in short period of time.

OK, so you check out your credit report and are disappointed with the score and see errors as well.

Each of the 3 major credit reporting bureaus allow you to DISPUTE legitimate errors on your credit report. 

Items such as:

  • An account showing a balance that you paid off a long time ago.
  • An account that was in collections that you paid off or settled but there is still a balance showing.
  • An account with a balance that you have not (or been unable to make any payments on) for longer than your state's Statue of Limitations for collection of credit accounts.
  • A judgment that you had paid off or settled.

Although creditors and debt collectors are supposed to report that an account has been paid off, settled or satisfied to the 3 major credit bureaus as well as to the court where the judgment had been recorded, many time they do not follow through!

First, you MUST HAVE PROOF that shows that there is an error and you are requesting that it be corrected.

I know that there are many so-called "debt repair" companies that claim to be able to remove negative information and improve your credit score dramatically.

BE VERY CAREFUL OF THESE TYPES OF CLAIMS!

The Federal Trade Commission has some great information for consumers!  They have an article entitled, "Credit Repair: How to Help Yourself", where it states:

You see the ads in newspapers, on TV, and online. You hear them on the radio. You get fliers in the mail, email messages, and maybe even calls offering credit repair services. They all make the same claims:

“Credit problems? No problem!”

“We can remove bankruptcies, judgments, liens, and bad loans from your credit file forever!”

“We can erase your bad credit — 100% guaranteed.”

“Create a new credit identity — legally.”

Do yourself a favor and save some money, too. Don’t believe these claims: they’re very likely signs of a scam. Indeed, attorneys at the Federal Trade Commission, the nation’s consumer protection agency, say they’ve never seen a legitimate credit repair operation making those claims. The fact is there’s no quick fix for creditworthiness. You can improve your credit report legitimately, but it takes time, a conscious effort, and sticking to a personal debt repayment plan.

I agree 100%!

Once you have copies of canceled checks, a statement from the creditor or debt collector show a $0 balance or that the account has been "settled-as-agreed", then you need to turn them into a .pdf document.

In a minute, you are going to go online to open your dispute. (Yes, you can mail or fax your dispute, but I don't recommend it.)

You want to be able to clearly show where the error is by making a copy of the page with the disputed item circled. 

PLEASE DO NOT SEND YOUR ENTIRE CREDIT REPORT!

The credit bureaus deal with thousands of disputes daily and what you want to provide to the agent who is reviewing your dispute is clear, easy to understand documentation that there is an error and they will correct it right away!

So, BEFORE YOU GO ONLINE TO OPEN YOUR DISPUTE....  you need:

  • Brief, concise explanation of why you are disputing this error.
  • Clear, easy-to-understand proof that the account has been paid as agreed.
  • Or, proof of your last payment showing that the statute of imitations has expired and therefore the item or account should be removed.

Once you have all of this saved as a .pdf document (if you don't know what that is...get some help!), then go online. 

Here are the links to the 3 major credit reporting agencies:

Equifax Dispute

 

TransUnion Dispute

 

Experian Dispute

 

If you have followed these instructions, you should get a letter or see online that the disputed item has been corrected.

If not, then contact them until it is!!!!

Good luck!

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Tags: debt settlement, Credit Score, credit repair, credit report, debt collector, credit cards

Does "Pay-to-Delete" Really Work?

There is a term being used by some credit repair and settlement companies called "Pay-to-Delete".  Does this really work or is it just a scam?

I've been helping people resolve credit issues for almost 15 years. I am not a "credit repair" specialist, but having been in and around this industry for a long time, I've seen a lot of things come and go.  Some good....some bad.  Not sure about this "pay-to-delete" idea, but here are my thoughts:

What does "Pay-to-Delete" mean?

When a person runs into trouble keeping up with the payments on their credit accounts, all kinds of things start to happen!

If you've ever been in that position, then you know that as soon as you are 30 days or so late, you will start getting letters and/or calls from your creditor.

If you are able to get back on track, then fine.  But if not, and your accounts start approaching 90 - 120 days late, then most likely you're account will be charged off, assigned or sold to a debt collection company.

Here's where things start to get serious!

Debt collectors earn money by getting you to pay....period.  If they cannot get the job done, then the account may be pulled and placed with another collector. 

So, it should not be a surprise if they are VERY AGRESSIVE in their collection efforts.

I've written many articles and blogs over the years on how to deal with agreesive and abusive debt collectors and while I'm not going to get into that in this blog, you might want more information, so click here:

 

"How to Stop Debt Collector Harrassment!"

 

When you have "past due" and "delinquent" accounts, you really only have a few options, such as:

  • Debt Consolidation Loan (very hared to get when you are in this situation)
  • Home Equity Loan (be careful...very dangerous!)
  • Debt Management or Counseling Program (fine if you can afford the monthly payments)
  • Debt Settlement Program (for those who cannot qualify for Debt Management)
  • Bankruptcy (most people want to avoid unless there are not other options)

For the sake of this blog, let's focus on the Debt Settlement Program as this is where you might be introduced to the PAY-TO-DELETE idea.

In a Debt Settlement Program, the debt collection companies (and sometimes even the original creditor) may be willing to accept a reduced amount rather than the full balance due. This is called a "settlement".

Often, these settlements range from 30% -50%, depending on circumstances.

Once the settlement has been completed (according to the settlement agreement), the debt collector is supposed to report it to the major credit bureaus a $0 balance with a notation something like:

  • "paid for less than full balance"
  • "paid as agreed"
  • "settled in full"

Although your credit report and score will start to improve with a $0 balance and the fact that you took care of this bad debt, the history of the action will still be reported for up to 7 years according to the Fair Credit Reporting Act.

The fact that you got yourself into credit/debt trouble and were not able to meet the payments/agreement you made with the creditor when issued credit are to be reported and thus, will negatively affect your credit score.

Yes, getting the account paid off via a settlement helps, but the history remains.

Here comes the new term...."PAY-TO-DELETE".

If that "history" could be deleted before the FCRA guideline of 7 years, it would help improve your credit score more quickly....or at least what the proponents of this method claim.

Rather than make a settlement offer of say, 50% of the balance to settle this account, you offer to pay 100% (or maybe a little less) if....(and here's the point....)

If the debt collector will agree to contact the major credit bureaus and have the account COMPLETELY REMOVED...just as if this had never happened.

Let's say you get an official agreement from the debt collector saying they will honor this "pay-to-delete" plan and it is signed and looks very "official" and "legal".

You make the payment (cashier's check to expedite the process) to the debt collector according to the agreement.

The agreement stated that within 15 days of receipt of the payment the debt collector would contact the major credit reporting bureaus to have the account removed.

You check your credit report after 20-30 days and guess what.....

The account was not removed!

Now what?

Of course, you contact the debt collector, but are told that the agent who made the agreement did not have the aurthority and therefore they will not honor the deal (or some other excuse).

Your recourse....

I suppose you could contact an attorney and file a lawsuit, but that is going to take a lot of money and time!  And, there is no guarantee that the attorney will be successful! 

  • Maybe the "agreement" was not a "legal contract" after all.
  • Maybe it is ILLEGAL for a Credit Bureau to remove an account, insinuating that the BAD DEBT never occurred!  This is a very "grey" area as far as honest credit history reporting goes. 

I'm using the word "maybe" because, not being an attorney, I just don't know.  But, in my opinion, the credit bureaus (FOR PROFIT companies) are in business to sell CORRECT credit information to lenders that accurately shows the person's credit history in order to determine if they should or should not loan the money.

Think about this....

Let's say I'm a car dealer, and I run a credit report on a prospective buyer.  The credit report comes back and looks good, but in reality, this prospect had had a couple of cars repossed in the last 3-4 years that are not being reported as they were removed via a "pay-to-delete" agreement.

The repossessed car(s) were sold at aucuion and the difference between the selling price and the total balance due at that time was awarded to the dealer/debt collector as a "deficientcy judgment".

The dealer/debt collector hires an attorney to go collect on the judgment and contacts the orginal owner.

The orignial owner offer a PAY-TO-DELETE deal.  The deal/agreement was struck between the debt collector and the origninal owner of the car, and the payment was made and the credit bureaus removed the history of this repossesion(s).

Am I getting an honest credit report?

 

Of COURSE I'M NOT!

 

But, based on the information contained in the credit report, I grant the loan for the car.

Later, the purchaser runs into financial trouble again and does not make the payments.

I'm forced to pay the legal and repossession fees to get the car. 

IS THAT RIGHT?    Don't think so....

In fact, I believe I would file a claim and sue the credit bureau for their FALSE CREDIT HISTORY REPORTING.

Would I win?

Don't know, but I think you can see my point.

A Pay-to-Delete agreement may be completly legal, fair and ethical.  But for now, until there is more proof, I'd be wary.

Rememeber the old addage....

If it sounds too good to be true, it probably is!

 

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Tags: debt settlement, Credit Score, debt collectors, credit repair, pay to delete

Credit Repair, Do It Yourself or Pay For Services?

Should you pay a "credit repair" company or can you improve or repair your credit report yourself?

debt free credit repair

Here a some tips on DO IT YOURSELF CREDIT REPAIR:

You have probably seen a TV  commercial or pop up ad that claims that "so-n-so credit repair company" can remove:

  • negative items from your credit report
  • history of late payments
  • judgments
  • bankruptcy
  • charge offs

Sounds like it is "too good to be true", right?

Well, you know the old saying...."if is sounds too good to be true, it probably is"!

Experian, Equifax and TransUnion are the three top independent reporting agencies.

Many people think they are non-profit or government agencies, but they are not.

They collect data and put it in a report to sell for profit!  There's nothing wrong with that, but it is important to understand that the credit reporting bureaus are in business to make a profit.

After they gather information about your credit, a report is then sold to creditors, individuals or other companies seeking information about you in order to determine your "credit worthiness".

Here is a quote from a portion of a very good article entitled:

                 How Credit Scores Affect the Price of Credit and Insurance


Information about you and your credit experiences, like your bill-paying history, the number and type of accounts you have, whether you pay your bills by the date they’re due, collection actions, outstanding debt, and the age of your accounts, is collected from your credit report.

Using a statistical program, creditors compare this information to the loan repayment history of consumers with similar profiles.

For example, a credit scoring system awards points for each factor that helps predict who is most likely to repay a debt. A total number of points — a credit score — helps predict how credit worthy you are — how likely it is that you will repay a loan and make the payments when they’re due.

 

So what happens when you find out that you have a low or poor credit score due to errors or incorrect information on your credit report?

You could seek the help of a reputable, credit repair company, but be careful!!!!

A good, reputable, credit repair company should not charge exorbitant up-front fees and should only be paid AFTER THE ERROR(S) have been removed.

But why pay for something you could do yourself?

Here's what you can do for yourself:

First, you will need a current credit report.

The law allows all consumers to receive a FREE Credit Report from all 3 of the credit reporting agencies annually.

Click here or go to www.annualcreditreport.com.

NEXT, study your credit report carefully.

Don't be surprised to find errors, such as:

  • Balances on accounts you know and can prove that you have paid off
  • Judgments that have been satisfied
  • Mistakes about your personal information, such as name change, age, social security number, address, etc.
  • Accounts that should have been removed because they have exceeded your state's statute of limitations.
  • Accounts that you have no idea about and know for certain you never opened

IT IS IMPORTANT TO STATE THAT YOU CANNOT DISPUTE ITEMS THAT ARE LEGITIMATE ON YOUR CREDIT REPORT!

This is called "frivoulous" and could result in you getting into serious trouble!

But, if you find errors or inaccuracies, and have proof that it is indeed an error or the information reporting is inaccurate, you must INITIATE A DISPUTEwith each credit reporting companies.

The best way to do this is to go on line and complete each credit reporting agencies form for disputing an error.

Here are the links to the top three credit reporting agencies:

Equifax disputes

Experian disputes

TransUnion disputes

 

  • The credit reporting companies must investigate the items in question and this must be done within 30 days!
  • The credit reporting company must forward the date that you provided to the creditor or collection agency reporting the information.
  • If the creditor or collection agency cannot dispute your claim, it must notify each of the credit reporting companies to remove the incorrect information from you file.
  • Once the investigation is complete, the credit reporting company must send you the results, in writing plus a free copy of your credit report showing the changes have been made.
  • You may also request that the credit reporting company send notices of these corrections to anyone who received your credit report in the last 180 days.

However, if you do not have access to a compute to file your dispute on line, then you will need to WRITE A LETTER (CTA) and mail it by CERIFIED REGISTERED MAIL.

After you have initiated the dispute, FOLLOW UP, FOLLOW UP, FOLLOW UP!

Although going online is the best way to initiate a dispute, you may need to call the credit reporting agency directly:

       Equifax                 888-202-4025

       Experian               888-397-3742

        TransUnion          800-916-8800

 

 

If you absolutly, without a doubt know that the listed accounts is not yours (you never opened and have no idea where it came from), then you can demand that the creditor to VALIDATE THE ACCOUNT.

This is a little different than disputing inaccurate information.

You must write a letter to each of the credit bureaus (Equifax, Experian and TransUnion) and challenge the account asking the original creditor to PROVE that it is valid.

You should enclose a copy (don't send the whole report or original) of the portion of your credit report with the item(s) that you are disputing circle and/or highlighted.

Once again, the credit reporting companies have 30 days to forward and request your dispute.

STAY ON TOP OF YOUR DISPUTE!

Most creditors and/or collection agencies think that the average consumer will not go to all of the trouble to either DISPUTE A DEBT OR REQUEST THAT THE DEBT BE VALIDATED!

One woman in Bend, Oregon won a lawsuit against Equifax of a reported $18.6 Million because Equifax failed to correct her credit report!

But what if you find out that the debts are valid?

You may be able to have them removed due to the statute of limitaions or through DEBT SETTLEMENT for a 50% or more savings!

 

 

Photo Credit to Chris Potter and StockMonkeys.com

 

                                      

 

Tags: debt validation, credit repair, credit reporting agencies, credit reporting companies, credit report dipute

What is the Best Way to Improve Your Credit Score?

If you have ever tried to check and/or improve your credit score, you know it can be pretty confusing.  Here are some tips on how you can improve your credit score.

You've probably seen an ad or had a "pop-up" appear on your computer by a so-called "Credit Repair" company offering to increase your credit scores almost "over night"!

My advice...RUN!  You've heard the old saying:

"If it sounds too good to be true, it probably isn't true."

Although there are many legitimate companies that will help you improve your credit over time by correcting errors and helping you maintain a disciplined approach to using your credit, there is just no "quick fix" when it comes to improving a bad credit history and therefore a poor credit score.

I have been have been helping people settle and manage outstanding credit debt for over ten years now and I believe that one of the most helpful sites you can use can be found at:

www.MyFico.com

While you cannot improve your score quickly,  YOU CAN IMPROVE YOUR CREDIT SCORE over time, by following the following tips:

If you haven't done so already, get a FREE copy of your Credit Report.

We all can get a free copy once a year, so take advantage of this by annually checking your credit report...and it's FREE!

According to Fair Issac or FICO, there are 5 areas that affect your credit score the most:

 

FICO Credit Score Breakdown

Paying your bills on time is one of the most important things you can do to maintain a good credit score.  Being just a few days late will hurt you score.

If you have had accounts go to a collection agency, then that obviously will hurt you score.  By-the-way, if you pay off or settle an account with a collection agency, it will remain on your credit report for up to seven years, but the fact that you paid the debt will ultimately help  your credit score.

Using a Debt Management Company to help you get control of your debt can be very helpful.

No, your credit score will not be affected by using or not using a Debt Management Company, but in the long run, the professional help and guidance will help reduce or pay off all of your debt and therefore, improve you credit score.

Next, notice that at least 30% of your credit score is determined by the AMOUNT OF DEBT you owe.

A lot of people think that just because they have never been late on a payment they should always have a great score.  But, if they have a very large amount of debt in relation to their income and total available debt, they will be disappointed with their score.

Here's basically why:

Let's say that you are a credit card company and are considering offering or issuing credit to these two prospects:

Prospect #1 has a good job and employment history.  She in never late on making her payments for her mortgage, car and all of her credit accounts.  But, even though she is earning a "better-than-average" income, she has accumulated over $30,000 of unsecured debt in addition to her mortgage and auto payments!

She would need to be making minimum payments of $750-$850 per month on her unsecured debts (credit cards, store cards, etc.) and that equates to about 25% of her net monthly take-home income just for these unsecured debts.  When you add in a $1200 mortgage and a $400 car payment, that's about $2,400 per month going out to service her DEBT!

Even with her "better-than-average" job and income at say, $75,000 annually, when you take out 30% for taxes and other deductions, that gives her a net monthly income of about $4,375.  With $2400 going out to just meet the minimum payments on all of her debt, that equates to almost 55% of her net income!

One "hick-up" such as long illness, loss of job, or any other hardship would make it almost impossible for her to meet your debt payment obligations.  If you were a credit card company, would you loan her more money?  Hence her credit score is not as high as she though it would be.

How about Prospect # 2:

He had a good job and earns about $4,000 per month.  Not that much really, but he is doing OK.  He isn't buying a home and so is paying about $800 per month in rent.

His old truck (not too old...maybe 8-10 years) is paid for.  Although it doesn't get great gas mileage, at least he doesn't have a big payment each month.

He has a good credit history and although maybe late a couple of times in the past, he has maintained a steady, on-time history for several years now.

He has about $10,000 on 3 credit cards which demands that he makes at least a minimum payment of $215 each month, which he does and sometimes adds a little more than the minimum.

Another VERY IMPORTANT PART OF DETERMINING YOUR CREDIT "WORTHINESS":

The ratio of credit being used to the availability of credit to you.

He has paid off several accounts in the past and actually has about $40,000 of available credit (credit limits on all of his accounts) that he could use if need be.

He is only using $10,000 of the available $40,000 or only 25%.  This is considered a good use of available credit and so he would be viewed as a better credit risk.

Are you starting to get the idea?  It's not just about paying your accounts on time (although that is certainly important), but more about USING AND MAINTAINING YOUR CREDIT WISELY!

You will notice that the LENGTH OF CREDIT HISTORY makes up at least 10% of your credit score.  If you are just starting out and have not established much of a credit history, DO NOT MAKE THE MISTAKE OF OPEINING A LOT OF ACCOUNTS IN A SHORT PERIOD OF TIME!

Opening too many accounts too fast doesn't look good to the credit bureaus.  In fact, it could do more harm than good!  Just open an account or two, make some small charges and pay them off promptly.

How long will this take?  It depends on some and/or all of the other factors we've been talking about.  The point is that establishing good credit doesn't happen quickly.

One more thing...

Closing accounts doesn't help improve your score!  In fact, it will probably hurt your score.

Why?

Again, you want to show that you are a responsible user of credit over a long period of time.  If you close too many accounts (assuming a $0 balance on them), you are reducing your "credit-use-ratio" as we discussed before.

Pay off and/or settle old accounts the best you can.  Sometimes it makes sense to seek the help of a professional Debt Management Company to settle old debts that have been around for a long time.

Sometimes these can be removed (using the proper procedure) from you credit report if they have gone past your state's statute of limitations.

Debt Settlement can help if you are in over your head!

Recent Settlements See what we have  done for our clients!

To summarize, the best way to improve your credit is too:

  • Manage your credit wisely...not too much...too fast!
  • Make your payments on time.  Being a day late hurts more than you know.  Try using "auto-payments".
  • Check that Credit Report for errors!  All three credit bureaus will let you go on line to dispute errors.  You don't have to pay someone else if you will take a little initiative.
  • Finally, although I don't suggest closing credit card accounts, I do believe that you should only use one card for emergencies only!  Pay cash or don't buy! Saw this sign in the parking lot of a major retailer the other day and it really says it all:

shop now pay later

The best way to improve your credit score????  Use credit wisely.

 

 

Photo credit:  http://www.myfico.com/CreditEducation/WhatsInYourScore.aspx

 

 


Tags: credit report errors, debt collection, Credit Score, debt, credit repair, credit report, debt settlement in oregon, credit card, debt management, credit cards

Wage Garnishment in Oregon...How to Stop

Here's some very helpful tips on how to put a stop to wage garnishment in Oregon.

First you must understand that a debt collector cannot simply be awarded a wage garnishment for unsecured debts without first having gone through the legal process:

  • File a claim in your county courthouse
  • A SUMMONS is delivered to you
  • Default judgment is awarded if no settlement can be reached
  • Apply for a Writ of Garnishment

OK, you've been having a very challenging time, financially due to circumstances beyond your control, such as:

  • Loss of employment
  • Divorce
  • Death in the family
  • Illness
  • Fixed income of retirement
  • Disability

Although you have done your best to try and keep up with your minimum payments, a couple of your accounts have been turned over to a COLLECTION AGENCY, and they have been calling day and night...driving you nuts!

YOU CAN PUT A STOP TO THIS:

 

STOP Collection Calls Free Sample Letter

DON'T IGNORE THE COLLECTION LETTERS

Most debt collectors and debt collection agencies are willing to work out a repayment and/or settlement of the debt you owe.

Having said, "...you owe...", let's make sure that you really do owe the debt before you pay for something you shouldn't.

The Fair Debt Collection Practices Act allows a debtor who feels that they do not owe the debt claimed by the creditor/collector to require a DEBT VALIDATION.

After you write a letter demanding that the debt collector validate the debt, they must not only stop collection activity (calls, letters, etc.), but provide you with proof that the debt is legitimate.

Some debt collectors are actually "debt purchasers", who buy lists of so-called debts at pennies-on-the-dollar, hoping to get someone to pay who may or may not actually owe the debt.

Here's a FREE Sample Letter for you to use:

FREE GUIDE to

One more thing about making sure you actually owe this debt:

Make sure the STAUTE OF LIMITATIONS for you state has not expired.

For example, in my home state, Oregon, the statue of limitations on unsecured debt is 6 years.  This means that if there has been no payments on this account for over 6 years, the debt must be removed from all credit reporting agencies and cannot be collected on any more!

So, now that you have determined if the debt is legitimately yours, it's time to contact the debt collector.

Prepare yourself for a small battle on this!  These are professional debt collectors and they are usually paid a percentage of what they can get you to pay.

Tell them you intend to pay the debt, but you just don't have anything now.

Don't let them trick you into paying just a little bit ($25 or so) "to keep the account in this office" or "to keep the account from going to the legal department".  If the account has passed statute of limitations, that "little payment", could reset the clock!!!

But, for the sake of this blog, Wage Garnishment in Oregon...How to Stop, if you have received notice of a wage garnishment, here's what you can do:

Your employer has no choice but to comply with a WRIT OF GARNISHMENT.  If they ignore it or do not reply, they could receive a hefty fine!

But, make sure that you are making enough money to qualify for a garnishment!  In Oregon, if you take home income is about $850-$900 or so, they you cannot be garnished.

Here's the Oregon site that will help.

Just make sure your employer is aware of the exemption limits.

By the way, if you are receiving certain types of income, these cannot be garnished.

Basically, all retirement income, social security, disiability income, etc. is exempt. 

Check out the complete list here.

But if your income is not exempt, then to put a stop to a wage garnishment, you must contact the debt collector and/or attorney for the debt collector and arrange a STIPULATED AGREEMENT.  

You will need to be prepared to demonstrate to the debt collector or attorney that you are in a very bad financial situation and the wage garnishment will force you into bankruptcy unless they agree to a stipulated agreement.

Prepare a basic household budget showing all of your income and expenditures.  You may have to provide a couple of months of bank account statements and maybe a pay stub or two.

But if you can demonstrate how bad things are, they may be willing to enter into a stipulated agreement.

Now, if by chance you could find a large lump sum, say 50% -75% of the balance, they may and most likely, will take that as a settlement and release the judgment.

I know, but maybe you have someone who could help...just asking.

Of course, if you get the Stipulated Agreement or Settlement Agreement, make sure to get it in writing!

The real key to stopping a wage garnishment in Oregon or any state for that matter is to be pro-active.  Don't just ignore the letters and especially don't ignore the summons.

In most cases, a debt collector will be willing to work with you.

 

 

 

 

 

Tags: credit card debt, debt collectors, debt validation, how to stop collection calls, credit repair, how to prevent wage garnishment, how to stop a wage garnishment, credit reporting agencies

Do It Yourself Credit Score Check Up

do it yourself credit score checkupWould you like to know how to improve your credit score?

 Here are a few very helpful tips you can use to do it yourself.

I've written several articles and blogs on the subject of Credit Repair, How to Improve Your Credit Score, How to Have Errors on Your Credit Report Corrected, etc. over the years.

When it comes to the subject of "CREDIT REPAIR", there are several misconceptions, but the most prevalent is that you can get the top three credit reporting agencies (Equifax, Experian or TransUnion) to remove negative information from your credit report.!

You may have seen ads from the newspaper, TV, radio, on line or phone making claims such as:

  • "We can remove bankruptcies, judgments, liens and bad loans from your credit report!"
  • "We can erase bad credit!"
  • "We will help you create a new credit identity that is 100% legal!"

Credit Reporting agencies sell (that's right, they are in business to make a profit) your credit history to those who need to know that if they loan you money, you have (or have had in the past) the ability and track record to repay that loan!

Make sense?  Sure.  Then why would you think that you or some Credit Repair Company could magically make negative information disappear?

Yes, there are some credit repair companies who, in my opinion (and most likely your state's attorey general) have the methodology to have some negative items removed from your credit report for a short period of time or until the creditor realizes it and makes a claim to have it replaced!

Some people will pay a lot of money for this type of shady "credit repair" in order to get a loan or possibly qualify for an apartment or even for employment.

Be very careful of these claims!  They could come back to  haunt you!

The Federal Trade Commission has written many good articles on this subject and credit repair in general.

Here's a link to a very good article: CREDIT REPAIR: HOW TO HELP YOURSELF

OK, but what about LEGITIMATE ERRORS?

If you haven't done so already, you need a copy of your credit report (not necessarily your score at this time) from each of the top 3 Credit Reporting agencies.

If you have applied for credit, insurance or employment, and were denied, you can request a copy of the report, if you do it within 60 days.

You are entitled to a FREE CREDIT REPORT every 12 months.  Just go to www.annualcreditreport.com or call 1-877-322-8228.

Carefully check all of information on all 3 reports.

Make sure you name, social security number, address, etc. are correct.

What you are looking for is accounts that you know (and can prove) that you have paid off.

Also, depending on your state's statute of limitations, negative information in the past (charge offs, accounts that you were late paying often, etc.) can be removed after a certain number of years.

For example, if you live in Oregon, the statute of limitations is 6 years on most accounts.

But, the biggest thing you are looking for is for accounts that you have paid off and are still showing a balance or may have been turned over to a collection agency.

Make a copy of your the page of the credit report showing the account you wish to dispute.

  • Circle the account.

Gather the proof of payment:

  • Letter or account statement with $0 balance
  • Copies of check and/or money order you used (you may have to contact your bank or go on line)
  • Letter of satisfaction if you paid off a judgment

 

Now, you are going to write a letter with this information to EACH OF THE 3 CREDIT REPORTING AGENCIES.

FREE GUIDE to

Yes, you can go on line and in many cases this works best, but somehow I think the "paper trail" of a letter with proof is more effective.

If you do not get a reply within 45 days, make sure to follow up!  Don't GIVE UP!

This is where I think it may be a good idea to hire a professional, ethical credit repair company to do this for you.

Yes, it will cost you some money, but there is a lot of time and effort that will go into challenging several items and you may not want to spend the time.

Check with your state's attorney general's office for a list of good, reliable credit repair companies.

If you live in Oregon, click here for a list of registered companies.

Comment on the subject of Credit Report Disputes:

Recently, I had written a blog about this subject and received a comment from a Credit Repair Company owner.

The blog was titled "Best Options for Credit Card Debt Relief" in which I listed and explained several ways to help get debt.

He commented and asked the question why I did not explain how to "fight for non payment of a credit card" rather than file for bankruptcy.

I understand and apprecitate the comment, but in my opinion, if you or I agree to repay a debt by taking out credit, then we have given our word...made a promise to repay and should do so if at all possible.

I don't think it is right to try an find a loophole such as they fact that a debt collector (as much as I don't like most of them) can't provide sufficient paper work to prove that the debt is legitimate in order to get out of paying a debt you know you owe.

On the other hand, I've had cases where after a creditor or collector agreed to accept less than the full balance due to the severe financial hardship of the consumer, the remaining balance showed up at another collection agency later.

Of course, in that case, you should (and we successfully did) dispute the claim.

I understand that there are many circumstances that happen that may make repayment impossible.

In those cases, if a Debt Management Program or a Debt Settlement Program can help, then a person should take advantage of such programs.

If things are so dire that neither program can help, then Bankruptcy may or should be the only option.

So, for your DO IT YOURSELF CREDIT SCORE CHECK UP:

  • Order a FREE Credit Report
  • Check for errors
  • Gather proof of payment
  • Write letters
  • Follow up! Follow up! Follow up!

If all of this sounds like TOO MUCH, we can help:


 

 

 

 

Tags: dispute errors on your credit report, credit repair, credit report, debt relief in Portland Oregon, credit report dispute, credit repair scams, credit card debt relief oregon, Equifax, Experian, TransUnion, credit reporting companies

Should I Close Credit Card Accounts to Improve My Credit Score?

close credit cards to improve credit scoreAs strange as it seems, closing credit card accounts will actually hurt your credit score. 

Why does closing credit card accounts hurt your credit score?

As crazy as it seems, the credit rating agencies like to see several open accounts with balances and payments under control.

They actually penalize you if you close accounts because it now looks as though you have "less established credit" and are more of a risk! It doesn't make logical sense, but that's the credit rating/scoring game we all have to play!

For Example:

Let's say you have 5 credit cards

Account Credit Limit Balance  

Visa

$5000 $2,500 making on-time payments
Master Card $5000 $1,500 making on-time payments
Sears $1500 $0  
Kohl's $1500 $0  
Discover $2500 $0  

As far as the main credit reporting agencies (Experion, Eqiufax, Transunion)are concerned, your RISK RATIO looks like this:

Total Credit Available $15,500
Total Balances $4,000
Ratio 26%

In this example, you are a good credit risk, pay on time and therefore should have a good credit score. But, let's say you decided to cancel the Sears, Kohl's and Discover cards since they have a zero balance and you are trying not to charge up too much credit.

Now your RISK RATIO looks like this:

Total Credit Available $10,000
Total Balances $4,000
Ratio 40%

Now you are a greater risk as you are using almost 1/2 of your available credit! Make sense? 

What is the best way to manage your credit score and risk ratio?

It might seem foolish, but from a credit score perspective, the best way to improve your credit score is to "lightly" use several cards."Lightly" means charging less than 10% of the available credit.

Next, you need to PAY OFF THE FULL BALANCE EACH MONTH!

Sound dangerous?  You are right!  If you aren't disciplined, you could end up charging up your cards again.  However, if you can keep on task, your credit score will improve over time.

Not sure what your credit score looks like?

Go to www.creditkarma.com to see your score for free.

Want to see what is showing up on your credit report?

You can get a FREE COPY OF YOUR CREDIT REPORT FROM ALL THREE MAJOR AGENCIES once a year!

ARE THERE ERRORS ON YOUR CREDIT REPORT?

You can fix those errors and improve your credit score.  Check out this post --> 3 Tips on How to Repair Your Credit Report.

 


Tags: credit card debt, Credit Score, credit repair, how to improve your credit score

3 Tips on How to Repair Your Credit Report

 3 tips to repair your credit report

Credit repair is a popular and often misused term.

If you have errors on your  credit report, here are 3 tips on how to repair  your credit report:

1.  If you haven't done so already, request a FREE COPY of your Credit Report.

The Fair Credit Reporting Act (FCRA) promotes the accuracy and privacy of consumer information on the nation's credit reporting agencies.

If you want to dispute items on the report, you need to follow some simple steps.

But first, you need to be aware that there are many so called "Credit Repair Companies" that are making claims like:

  • We can remove bankruptcies, judgments, liens and bad loans from your credit report!
  • We can remove all charge offs and bad credit history to improve your credit score!
  • Improve your credit score by 50-100 points in 30 days!

If it sounds too good to be true, it probably is.  You can accomplish the same thing on your own!

Understand that a Credit Report is a history of your credit...how much, what kind, repayment history, etc.

If you have had a rough time and missed payments or had accounts charged off and go to debt collectors, your credit report will reflect it and THERE IS NOTHING A CREDIT REPAIR COMPANY CAN DO ABOUT LEGITIMATE ITEMS.

However, if you have items on your credit report such as:

  • Accounts showing a balance when you know AND HAVE PROOF that you paid it off...
  • Items that still remain after the STATUE OF LIMITATIONS for your state has passed...
  • Address or employment errors...
  • Accounts that you don't have...AND CAN PROVE IT

...then, you can dispute those items yourself and with the proper proof and/or documentation, can have those items removed.

2. Gather evidence and proof for your dispute.

Let's say that there is a Visa account with a balance of $5,000 that you paid off either IN FULL or Settled for Less Than the Full Amount.

Get a copy of your cancelled check(s) or bank statements clearing showing that you have paid this account as agreed.

If you cannot find the proof, then you can try to make the creditor VALIDATE THE DEBT.

Mail a detail account along with copies (not originals) of your canceled checks or bank statements (make sure to black out bank account numbers) to each of the credit reporting agencies.

You can also go on line to each reporting agency, but I think the written proof mailed by CERTIFIED MAIL (so you can prove they received it) is much more efficient.

The credit reporting agencies will contact the disputed creditor or debt collector.

Once the investigation is complete, the credit reporting company must provide you with a copy of the results and a free copy of your credit report if the dispute results in a change.

3.  If you receive a letter from a debt collector and you don't think you owe the debt, MAKE THEM VALIDATE IT!

Many debt collection agencies BUY OLD DEBT at pennies on the dollar and try to collect. Some of the debts are legitimate and yet many are not. Because of the harsh language and threats of PENDING LEGAL ACTION, many consumers just pay the debt!

If you know that you don't owe the debt, send the same information as above the to debt collector.  Demand that they provide you with documentation of the original contract showing your signature and date.

If they cannot provide the documentation or if they deem it is too much trouble to investigate, they will cease collection activities.

If they do not provide documentation that clearly shows you owe the debt, and they continue to contact you, REPORT THEM TO YOUR STATE'S ATTORNEY GENERAL'S OFFICE AND the FEDERAL TRADE COMMISSION (FTC).

If you find that you have old debts that you legitimately owe, you may be able to negotiate a settlement for much less than the balance!  We can help you through the process.  Simply give us a call at 1-877-492-4109 or click on the link below.

how to repair your credit

 

 



Tags: debt validation, credit repair, credit report, credit report dispute, credit report and credit score, credit report dipute, validate

Top 3 Ways Identity Theft Affects Your Credit

If you've been a victim of identity theft, you know how much work it can take to clear your name. In theory, identity theft should not have an ongoing impact on your credit reports or scores. But the reality can be much different.

identity theft affects your creditHere are the top 3 ways identity theft immediately impacts your credit

 

#1 Higher balances on existing accounts

The fastest growing type of identity theft reported involves the use or misuse of an existing credit account, according to a report by the Department of Justice. If you aren't monitoring your accounts closely, you may not catch a sudden increase in the balance on your credit cards. Unfortunately, balances that are close to their credit limits can have a significant impact on your scores.

High credit utilization (balance/credit limit) can drop a high FICO score of 780+ by as much as 45 points! YIKES!

The good news here is that once those new charges are successfully disputed, your credit scores should no longer be impacted by those fraudulent charges.

#2 New accounts and late or missed payments

When a crook uses your personal information to open a new account, that account will typically appear on your credit report. New accounts added to your credit report will cause a slight drop in your score. The identity thief will often destroy the consumer's credit score by not making payments on the fraudulent accounts.

Most consumers don't learn that their information has been compromised until after the damage has been done. In this scenario, the thief opens new accounts, makes purchases, and pays the bills for a little while, and then they disappear. The damage can be severe. In fact, even a minor delinquency, such as a 30-day late, can cause a high FICO score of 780+ to lose as much as 100 points! Imagine how much your score would drop if you did not notice this for several months.

#3 Credit inquiries

Every time a scammer applies for credit using your personal information, that inquiry is recorded on your credit report as a hard inquiry or hard pull. While multiple inquiries don't typically have a significant impact on one's credit scores, they will start to add up.  This can be a hard thing to clean up.

When you start working to clean up the mess, not only will you have to clean up the fraudulent trade lines, you will also need to work to clean up the hard inquiries to make sure that any that have been made by the identity thieves are removed.

The Moral of the Story:

Now that I’ve scared you with all the things that can happen when you become a victim of identity theft, it’s important that start monitoring your credit report on a regular schedule.  You can get an absolutely free copy of each of your credit reports from TransUnion, Experian, and Equifax once per year by going to www.annualcreditreport.com 

Don’t wait, go ahead and take a look today.  If you find trade lines or balances that you believe to be fraudulent, there are steps you can take to clean up the mess and report the crime. 

Come back tomorrow to learn about your rights and how to recover after becoming a victim of identity theft.

identity theft affects your credit

Tags: identity theft affects your credit, credit repair, credit report and credit score

Oregon Credit Repair

oregon credit repairLooking for Oregon credit repair?

Errors and inaccurate information on your credit report can cause your credit score to be lower than it should be.

Here's a few TIPS ON HOW TO CORRECT YOUR CREDIT REPORT:

1.  Take a close look at your credit report!

If you don't have a current credit report or if it has been a long time since you took a close look at it, you need to get an updated report.

Your credit report is constantly changing as creditors are reporting and or inquiring about your credit report.

You can get a FREE Credit Report by going to WWW.ANNUALCREDITREPORT.COM  This site will link you to all three of the major credit reporting agencies... Equifax, Experian and TransUnion.

2.  Mark any items on the report that you need to dispute

Sometimes you will find items on your credit report that just shouldn't be there such as:

  • Paid off or settled accounts that still show a balance
  • Judgments that you have satisfied that still are showing a balance owed
  • Accounts that have been on the report for longer than the statute of limitations in your state
  • Inaccurate names or addresses
  • Accounts that are not yours (yes, this happens)

#3 Submit your dispute to each of the three credit reporting agencies

Write a letter to each credit bureau detailing your challenge and requesting that the item is removed or corrected.

You should also demand that the creditor reporting show a complete history of the debt (Fair Credit Reporting Act).

It usually takes 30 days or more for the credit bureaus to respond, so you may need to do a lot of follow up.  But DON'T GIVE UP!

Yes you can have incorrect or inaccurate information removed, but it will take time and effort!

If you would like help, please let us know!

FREE GUIDE to

 

 

 

 

 

Tags: credit repair, Equifax, Experian, TransUnion, how to correct errors on your credit report