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!

FREE  Debt Elimination Summary

 

Photo Credit

 

 

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

When is Debt Settlement Your Best Option?

Too much credit card and other unsecured debt?  Not able to keep up with the payments?  You may be a prospect for Debt Settlement.

But, before you decide, consider the following:credit cards cut up

Debt Settlement is a very effective program to help people settle unsecured debts for less than the total balance due.

  • The unsecured debts I'm talking about are:
  • Credit Cards
  • Store Cards
  • Home Shopping Club accounts or cards
  • Personal Loans
  • Repossession Deficiency Judgments
  • Medical Bills
  • Personal Student Loans (although there are programs to help on Federal Student Loans as well)

When faced with too much debt and not enough income or cash flow to keep up with at least the minimum payments due, there are only a few options to keep the debt collectors at bay:

A Debt Management Program

A Debt Management Program used to be called a "Credit Counseling Program" and sometimes it is still called by that name.  In a Debt Management or Credit Counseling Program, a person signs up with a "non-profit" (only for taxable reasons, YES, you will be paying fees!), and they will have set up a program with each of your creditors.

Usually, the interest rates are reduced or sometimes eliminated, late fees and over-the-limit fees are usually forgiven after you have made a few payments, and your account is now classified as being paid as agreed or on time.

However, the problem with a Debt Management or Credit Counseling Program is that there is very little forgiveness if you miss or are late on a payment!  I've seen people who had been consistent for many months, and then, due to an emergency, just couldn't come up with the total due that month.  The Debt Management Program was canceled or voided and they were back to square one!

Also, in a Debt Management or Credit Counseling Program, the total monthly payment may be more that the total minimum monthly payment you are required to make now!  And, the company is charging you a monthly service fee as well!

So, if you go through the process of trying to enroll in a Debt Management Program and find out you cannot qualify, what now?

A Debt Acceleration Program

A Debt Acceleration Program (sometimes referred to as a Debt Snowball Plan) is perfect for someone who is making the minimum monthly payments on each of their debts and yet, due to high interest rates and annual fees, realize that at this rate, it will take 15-20 years to pay off those debts!

A person who should look into a Debt Acceleration Program also could add another $100 - $200 each month to help reduce or accelerate paying off these debts.

Most people in a Debt Acceleration Program are DEBT FREE in 48-60 months, saving thousands of dollars in interest and fees!

I prefer the Debt Acceleration Program to a Debt Management or Credit Counseling Program because as far as your credit report is concerned, you were a very consistent debtor and not only paid all of your payments on time, but actually did so sooner than required!

 

 

OK, but what if you are one of so many people that due to:

  • Job loss
  • Divorce
  • Disability
  • Death of loved one
  • Major Financial Emergency

...just cannot meet the total minimum payments due on your unsecured accounts and cannot qualify for a Debt Management or Debt Acceleration Program?

Then, you should consider a:

Debt Settlement Program

Debt Settlement is designed for people who have a severe financial hardship, have tried to keep up with all of the bills, but some or all of their credit card accounts and other unsecured debts have been turned over to debt collectors.

These debt collectors are calling all day and even harassing you at work. But, before I explain how a Debt Settlement Program works and could help you, here's how to put a stop to those collection calls:

STOP Collection Calls Free Sample Letter

In a Debt Settlement Program, you will go through a thorough financial overview to determine several things, such as:

  • Type of employment (self or W-2)
  • Basic Monthly Budget
  • Retirement status
  • Type of income you are receiving (disability, social security, unemployment, etc.)
  • Assets (mainly do you have equity in your home)
  • Are you renting?

Once you know where you stand, you will have an amount (that you can afford) deposited into your Debt Settlement Reserve Account (FDIC insured bank) monthly.

The Debt Settlement company will be contacting your creditors and/or debt collectors to arrange settlements.  As you reserve account grows, each of your accounts should be settled for much less than the total balance due.

Recent Settlements See what we have  done for our clients!

But finally, what if you just are barely making ends meet on your basic bills and have little or nothing left over to put towards a Debt Settlement Program?

Then, you should consider:

A Bankruptcy Program

There are basically two types of Bankruptcy Programs for individuals:

  • Chapter 7
  • Chapter 13

The Chapter 7 is not used as much these days as it is basically designed for someone to liquidate any assets they have (obviously, not very much) and that small amount is paid to each creditor, and the balances of your debts are "forgiven".

In a Chapter 13, a bankruptcy attorney will present a type of repayment plan to the bankrutpcy court based on your financial status.  Usually, a person will be making a monthly payment of $200-$400  (or whatever your bankruptcy attorney comes up with) for about 3-5 years.  Each of your creditors receives a small portion of the balance due.

At the end of the Chapter 13, the balances of your debts are forgiven.

Oh, by-the-way, if you receive a 1099-C, in most case, you should not be liable for any additional taxes due on the amounts forgiven.

Debt Settlement is a great program for the right person.

 

 


 

 

 

 

 

 

 Photo Credit:  Daniel Oines

Tags: credit card debt, debt settlement, Credit Score, Bankruptcy, credit report, debt relief in Portland Oregon, chapter 7 bankruptcy, chapter 13 bankrutpcy, credit card debt relief oregon, credit cards, credit card debt help

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

Is it Time for Debt Relief?

New year, new year's resolutions. Don't you think it is about time for you to consider Debt Relief?

stress-reduction

Sure, you say, but what is "Debt Relief"?

I'm talking here specifically about finally starting to take control of your unsecured debts...mainly credit card debt.

You've heard or read the statistics about how many individuals have too much credit card debt based on their income and living circumstances.

With credit card interest rates anywhere from 12%-24% or higher, if you are just making the minimum payments required, it could take you 10 years or more to finally pay off those debts!

Wouldn't it feel great to be DEBT FREE? OK, here are some tips that can really help if you will apply:

FIRST:  Do you know exactly where you are financially?  I mean, can you account for almost every dollar that comes in and for every dollar that goes out?

Most people have a vague idea, but have never taken the time to do a complete, thorough Financial Worksheet.

After completing a Financial Worksheet, I've had people say, "WOW, I had no idea that I was spending so much money on stuff like Starbucks, movies, burgers, etc."

Until you get a clear picture (and you may not like it) of where you really are, you cannot possibly make a plan to become Debt Free.

Here is a simply, easy-to-use Financial Worksheet that you can download:

Budget Worksheet FREE Download here!

SECOND: Now that you have a clear, honest (it won't help if you are not honest with yourself!) picute of where you are, it's time to get an up-to-date CREDIT REPORT.

You can get a FREE CREDIT REPORT annually that will tell you how much debt is being reported to the 3 Major Credit Bureaus (Equifax, TransUnion, Experian).

Not only will this report tell you to whom and how much debt you have, you may also discover that there are errors on the report.  I've read reports that 1 out of 4 people have errors on their report.

If you find errors, you can file a challenge to each of the bureaus on line or you can mail a challenge.

The following links will help:

Equifax disputes

TransUnion disputes

Experian disputes

There is a very good site from the Federal Trade Commission that will give you some good points on for do-it-yourself credit repair.

OK, but how about all of the legitimate debts that is being reported?

Break them down into two basic groups:

Secured debts, such as:

  • First Mortgage loans
  • Second Mortgare or Equity Line of Credits
  • Auto, boat, RV loans
  • Government Student Loans

There is not a lot you an do about these except keep paying.

But on the other hand, all of the UNSECURED LOANS, such as:

  • Credit Cards
  • Store Cards
  • Personal loans
  • Mecical bills
  • Pay Day loans
  • Private Student Loans

You do have options as to how to repay these...read on.

NEXT... List all of the unsecured loans like this:

             Creditor, Interest Rate, Payment (minimum), Balance

Here is where the Financial Worksheet is so important.

After completing the Financial Worksheet, you will be in one of the following groups:

After all bills (including all debts) are paid, I have $100 - $200 extra each month that could be used to start paying down unsecured debt.

You find out that you are basically even at the end of the month.  You are paying all bills (including all debts) and you have basically $0 left over, but not negative.

Finally, if after completing a thorough Financial Worksheet, you realize that you are coming out negative at the end of the month. 

You probably alreaday knew this, as you have been "robbing Peter to pay Paul" for a long time.  In fact, some, if not all of your unsecured debts are 30,60 or 90 days late and some, if not all, have been charged off and gone to a Debt Collection Agency.

Here are your options, based on your personal financial situation (revealed from the Financial Worksheet and Credit Reports):

Group One... Those of you who can put an extra $100-$200 towards paying down unsecured debts.

You should use a SNOWBALL PLAN to pay off those unsecure debts a lot sooner and at the same time, save you thousands of dollars in interest!

Basically, you break down your unsecured debts and start paying extra to the one with the lowest balance. 

After this one is paid off, you use the same extra, plus the minimum payment just paid off plus the minimum payment due  on the second and put all of that towards that second debt.

For a more complete overview, click here.

But what about Group 2?  You are making all of your payments, but there is just not anything left over?

You should be able to qualify for a DEBT MANAGEMENT PROGRAM.

  • In a Debt Management Program, you will have one monthly payment that will be disbursed to each of your creditors by a Debt Management Company.
  • Your interest rates should be reduced significantly.
  • Late fees and over-the-limit fees should be stopped or forgiven.

In short, a Debt Management Program can not only help you become Debt Free in a shorter amount of time (usually about 48 months), but save you thousands of dollars in interest and fees.

Finally, what about Group 3?  Those of you who have too much unsecured debt and are not only not getting anywhere but really can't afford your payments...here are your choices:

  • DEBT SETTLEMENT
  • BANKRUPTCY

Debt Settlement is a great way to pay off/settle your unsecure debts without having to resort to bankrutpcy.

Debt Settlement will allow you to have:

  • One Monthly Payment (usually much lower than the required total minimum payments now)
  • Your Debt can be settled at 50% or lower (depending on several factors)
  • You can be DEBT FREE in about 48 months.

To receive a FREE REPORT called DEBT SETTLEMENT FOR BEGINNERS, click below:

FREE EBook Debt Settlement  Basics

But if you cannot even afford the reduced payment of a Debt Settlement Program, then you should consider BANKRUPTCY as a way to not only cancel your unsecured debts, but relieve the constant finacial pressure and worry that comes from such a severe financial condition.

You should consult a Bankruptcy Attorney who specializes in Bankruptcy.  You should be able to schedule a Free Consultation to deteremine if you qualify.

Regardless of your situation, there is a way to not only become Debt Free, but stop the collection calls and relieve the constanct pressure that comes with too much debt.

 

Photo By: Eamon Curry

Tags: debt collection, debt settlement, Credit Score, Bankruptcy, credit report, debt settlement in oregon, debt management, credit report dipute, unsecured debt

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

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

How to Improve Your Credit Score

how to improve your credit scoreHow to Improve Your Credit Score

When many people think of credit reports and credit scores, they see them as important if you want to apply for a loan. And of course they are important when you apply for a loan. But your credit report and score are also absolutely critical to getting rid of debt. With a good credit score, you qualify for lower interest rates that can help bring down your total interest charges. With bad credit, you’re stuck paying double digit rates. So let’s look at some tips and tools that can help you:

#1 Understand Just How Important Your Credit Score Is!

As I explained above, your credit score is an important tool in getting out of debt as quickly as possible. Don’t believe me?  Check out these statistics from myfico.com for individuals with a FICO score of 660 (fair credit) versus 760 (excellent credit):

  • Mortgage: The average interest on a home loan today is about 4.766% for excellent credit, but 5.379% for fair credit.
  • Car Loan: With a credit score of 760, you can expect a car loan interest rate of about 6.3%. With a score of 660, the rate increases to about 9.8%.
  • Home Equity: Excellent credit can expect a rate of around 8% or lower, while fair credit borrowers will pay as much as 11% or higher.

As you can see, your credit score matters!

#2 Get Your Free Credit Report!

The starting point is to get your FREE CREDIT REPORT and check it for errors.

#3 Get Your Free Credit Score!

Next you should get your FREEE CREDIT SCORE. You can get this from annualcreditreport.com., but you will have to pay for it.

#4 Pay Your Bills On Time!

There are a number of factors that go into a credit score, but one of the most important is paying your credit bills on time. (such as credit cards, mortgage, and car payments) Do whatever is necessary not to forget a payment, and make sure you make the payment far enough in advance of the due date so that there is no chance it will be late.

#5 Don't Close Credit Accounts!

As a general rule, don’t close credit card and other revolving accounts. One of the factors in determining credit score is the amount of debt you have in comparison to the amount of available credit. The greater the available credit, the better. You can always cut up some of your cards if you don’t want to risk using them, but don’t cancel them.

 FREE GUIDE to

Tags: best way to eliminate credit card debt, credit repair, credit report, how to improve your credit score

Credit Repair Myths

credit repair mythsCredit Repair... Is it really possible?

There are several credit repair myths out there, but which ones are real and which ones are just plane untrue?  In this post, I will examine 4 common Credit Repair myths to shed some lite on the whole thing!

MYTH # 1:

If you have negative or derogatory accounts, a credit repair company can get them removed.

Although some negative or derogatory accounts can be removed from your credit report, a few of them cannot. Before you pay a fee to any company, make sure you "get in writing" their guarantees of what they can and cannot do for you.

If any company states that they can remove all negative items, RUN!

MYTH # 2:

If you are delinquent on an account and call the creditor to close that account, it will help your credit score.

Sorry, this one is not true either!  Inactivity and/or delinquency will damage your score.  FICO (Fair Isaac Corporation) has information that tells you what is in and not in a credit report.

Unfortunately, your PAYMENT HISTORY accounts for 35% of your credit score, and closing the account will not change your payment history.

MYTH # 3:

If you add a statement to your credit report (up to 100 words), it will raise your credit score.

If you cannot get the  three major credit reporting agencies to remove inaccurate information or mistakes, you can opt to add a statement on your credit report.

Unfortunately, FICO usually does not see or use it in determining your credit score. Even though adding a statement might make you feel better, the effort may not be worth it.

MYTH # 4:

You cannot do anything on your own about improving your credit score!

This myth is absolutely FALSE! There are several things you can do to improve your credit scores:

Of course, the most important is to PAY OFF YOUR CREDIT CARDS AND ACCOUNTS in a timely manner.  There are no shortcuts to living up to your responsibility to repair what you agreed to repay!

But, if you see errors on your credit report, you can make requests to have these removed.  If you provide the proper documentation to prove you either did not incur the debt or that you have repaid the debt, it will be removed.

To contact the 3 major credit bureaus, click on the links below:

Want to read more about credit repair directly from the source, the Federal Trade Commission  has some good advice on How to Repair Your Credit

If you would like a FREE CONSULTATION about your situation, please let us know.  We have been helping people become DEBT FREE for many years, and may be able to help you too!

 

 

 

 


 

Tags: credit repair, credit report, credit card debt repair, credit report dispute

DIY Credit Repair

diy credit repairDIY credit repair is not as hard as you think!

If you think you have errors on your credit report, there are steps you can take to correct them without paying a so-called "credit repair company".

BY THE WAY...DO NOT FALL VICTUM TO SO CALLED CREDIT REPAIR SCAMS THAT CLAIM THEY CAN REMOVE NEGATIVE ITEMS AND INCREASE YOUR CREDIT SCORE...FOR A FEE!

First, you need a FREE COPY OF YOUR CREDIT REPORT.

Each of the three major credit reporting agencies will have on line information on how to submit challenges to errors on their reports:

1.  Get proof of payment or settlement for the account in question:

Let's say you paid off a credit card bill and yet there is still an outstanding balance showing either to the original creditor or to a collection agency.

  • Request copies of cancelled checks from your bank
  • Print online report from your bank
  • If you have the last statement show a zero balance...even better!

2.  Follow the instructions for each reporting agency to submit or open a challenge to your report.

You will be assigned a FILE NUMBER.  Make sure to write it down or better yet, make a copy of the page.

3.  The credit reporting agency will contact the creditor about the account in question. 

This may take up to 30-60 days.

4.  If you do not receive an email or letter within 45 days, check back with the credit reporting agency to get an update on your open file.

Your proof of payment should do the trick, but in some cases you may need to MAIL copies of proof of payment with explanation. The point is...DON'T GIVE UP! The credit reporting agencies want to provide an accurate report and will correct errors when proven to be errors.

If you are having trouble paying off credit card or other unsecured debts, we can help!

If you find that you have legitimate balances on some of your credit card accounts, a Debt Settlement Plan could be the answer!

 

 

Tags: credit repair, credit report, credit repair scams, credit report and credit score

How to Remove a Judgment From a Credit Report

remove a judgementIf you want to improve your credit score, you need to know how to remove a judgmentfrom a credit report.

If you have had a JUDGMENT recorded against you, then it will show up under NEGATIVE ITEMS on your credit report.

A JUDGMENT tells anyone reviewing your credit:

  • You failed to pay a credit account as promised
  • Attempts to work out a repayment plan failed
  • The creditor filed a COMPLAINT and you received a SUMMONS
  • The creditor was awarded a JUDGMENT by default

If you do not have a current FREE CREDIT REPORT from all 3 of the major report agencies:

From the Credit Report, find out where or what court the judgment has been recorded.

If there is a phone or fax, great!  If not, do a little searching (yellowpages.com) to find.

Fax or mail:

  • Proof of payment or release of the judgment.  A copy of the settlement agreement or actual letter from the collection agency or law firm is even better.
  • Copy of cancel check(s) from your bank records.
  • A brief explanation why you are requesting the judgment to be removed.

Follow the procedure for each agency. Sending to one doesn't do anything for the others!

In some cases, you can make your request online.

It may take 45-60 days to get a response or see the jugment removed.  The Credit Reporting Agency should email or mail their decision.

If positive, YOU DID IT!

If not, then try again.  You may want to call.

The credit reporting agencies want to provide accurate, up-to-date information.  As long as you have the proper "proof and/or explaination" of why the judgment should be removed or classified as "paid-as-agreed", they will work with you.

 

Tags: credit report, credit card debt repair, judgment, how to remove