Credit Repair: Fact vs. Fiction!

Before you pay for "Credit Repair", you need to know what is FACT and what is FICTION!

Beware of claims from so-called Credit Repair Companies like:

Warning!

  • We will remove negative items, bankruptcies, judgments, liens from your credit report!
  • Improve your credit score by 50 to 100 points!
  • Erase all bad credit...guaranteed!
  • Create a new identity!

 

Sound a little too good to be true? 

 

No one can LEGALLY remove correct or accurate information that is reported on your credit report.

After all, a credit report is a recorded history of how you have used credit.  There are many factors that go intor formulating a CREDIT SCORE

There are three major three Credit Reporting Agencies:

Although each uses a slightly different set of criteria for determining and assigning a credit score, they are basically the same.

Although you cannot remove accurate information from your credit report, YOU CAN HAVE INACCURATE INFORMATION REMOVED!

We are all entitled to receive a FREE CREDIT REPORT annually. I believe it is a very good practice to request your credit report each year to make sure there are no mistakes or inaccurate information being reported!

You are also entitled to receive a copy of your credit report used by a company that denied your application for:

  • Credit
  • Insurance
  • Employment

You have to request it within 60 days of receiving notice of denial, so don't wait too long!

If you find errors or inaccurate information on your credit report, you can dispute it with the credit reporting agencies (yes, you may have to contact all three is the same information appears on each credit report).

You can either write a letter or go to the credit reporting agencie's website.  I believe going on line is the most efficient way to dispute items.

You will need to have:

A copy of the errors on your credit report.  You don't have to send or include the entire credit report.  Just circle the items you are disputing.

Next, you must explain or prove why your are filing the dispute. 

For example:

Let's say that you had a credit card that was completed paid off a few months ago and the credit report is still showing a balance.

You will need a canceled check or bank statement showing the payments or series of payments to the credit card company.  You may be able to get a copy of a letter or statement from your credit card company by calling or going to the credit card company's website.

Make a copy (.pdf if filing on line) and include with a brief statement of why this item should be corrected. 

For example:

I am opening a dispute about the account I have circled on a copy of my credit report with your company. 

As you can see from the attached (or enclosed) statements, canceled check(s) and/or bank statements, this account has been paid in full.

Please make this correction as soon as possible.

Thank you,

(your name)

  • Not only does the credit reporting agency have to correct the error, IF YOU REQUEST, they must send a copy of the corrected report to anyone who got your report over the last 6 months!
  • If the error caused you to not get the job you applied for, again, IF YOU REQUEST, the credit reporting agency must send a corrected copy to anyone who got a copy for employment purposes over the last 2 years.


By law, the credit reporting agency must investigate your dispute within 30 days.

  • They must send the information you provide in your dispute to the company reporting the inaccurate information. 
  • After they company investigates and reviews the proofs you included about the disputed item, it must report back to the credit reporting agency as well as all other credit reporting agencies.
  • Once the investigation is complete, the credit reporting agency must provide you with the results and a free copy of your correct credit report.

What about negative information on your credit report?

Unfortunately, negative items on your credit report cannot "magically disappear", regardless of the claims of some credit repair companies!

But over time, these items will be removed.

  • 7 years for most negative items
  • 10 years for bankruptcies
  • 7 years (in most states) for judgments

But what about those so-called "credit repair companies" that claim to be able to remove negative information?

Well, it's just not true.  In fact, you should read an article from the Federal Trade Commission's website about one credit repair company's penalties, etc.

Many credit repair companies use the VALIDATION LETTER technique.  While it is certainly legal and ethical to challenge inaccurate information on your credit report (as we discuss above), there are some (too many in my opinion) credit repair companies that ABUSE this  technique.

The rationalization is that the credit reporting agencies are some overwhelmed with disputes that often they will just correct and/or remove the disputed item without doing a thorough investigation.  After all, the credit reporting agencies are in business to make a profit.

So yes, maybe in some cases they will remove an item without much investigation, but the creditor reporting that information can (and most likely will) put the disputed information back on your report.

This type of CREDIT REPAIR FRAUD has caused many credit repair companies to be heavily fined or forced out of business over the last few years. 

And yet, for those who feel they cannot make disputes themselves or would be willing to pay for legitimate credit repair services, there are many solid, credible companies. Check with your state attorney general's office for a list of registered credit repair companies and also with the Better Business Bureau for complaints.

 

Photo Credit:  https://www.flickr.com/photos/brook_lands/

 

 

 


 

 

 


Tags: credit report errors, credit reporting agencies, credit report dispute, credit report and credit score, credit reporting companies

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

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