Archive for November 15th, 2008
Nov
15
Choosing a Credit Repair Company
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Anne Hammel asked:
Selecting a credit repair company to help you improve your credit score is a big decision. A typical credit repair service will cost you a few hundred dollars and will take up to a year to complete their service. Choosing the wrong credit repair company can end up wasting money and perhaps more importantly, your time. Choosing the right credit repair company, however, may be one of the best things you can possibly do for your financial future.
What do you need a credit repair company to do for you?
A good place to start when determining which credit repair company is best for you is to figure out what needs to be done to improve your credit. The process of repairing your credit can involve much more than simply disputing your credit with the credit bureaus. You should make sure to use a credit repair company that can fulfill all of your credit needs.
When most people think of credit repair they think of a process that has become known as credit report repair. When working to repair your credit using credit report repair, a credit repair company is using your rights under the Fair Credit Reporting Act to dispute certain items in your credit reports directly with the credit bureaus. This element of credit repair has helped many people with erroneous, incomplete, or unverifiable information on their credit reports improve their credit scores.
While credit report repair is a good start, many people find that it is not enough. Many leading credit repair companies will also work directly with your creditors using a variety of tactics to get them to stop reporting the negative accounts to the credit bureaus. They may also work with collections agencies and others to get them to stop reporting negative accounts or change they way the accounts are reported. A credit repair company may even go so far as to challenge the legitimacy of a reported debt.
Depending on your current credit situation, you may be best served by a credit repair company specializing solely in credit report repair or one that can also provide a full catalog of credit repair services.
How can I tell if a credit repair company should be trusted?
Unfortunately, credit repair is an industry that has received a bad reputation because of the publicity afforded to credit repair scams. While fraudulent credit repair firms tend to be shut down quickly, it is still in your best interest to learn how to identify the differences between a legitimate credit repair service and a credit repair scam.
An easy way to do this is to know a few of the laws that govern credit repair companies. These laws as defined in the Credit Repair Organizations Act were designed to protect you from credit repair scams while also protecting your right to get help with repairing your credit reports.
Another way you can find out about a specific credit repair company is to look up their BBB (Better Business Bureau) reports. The BBB keeps notes on complaints made against companies. If the BBB report for a credit repair company lists multiple unresolved complaints or an overall low rating, you should be wary of the company. In addition, beware of any credit repair company that does not list credit repair services as one of their offerings in their BBB filing. The BBB has very strict standards for credit repair companies so many fraudulent companies will not report to the BBB that they offer credit repair.
Selecting a credit repair company to help you improve your credit score is a big decision. A typical credit repair service will cost you a few hundred dollars and will take up to a year to complete their service. Choosing the wrong credit repair company can end up wasting money and perhaps more importantly, your time. Choosing the right credit repair company, however, may be one of the best things you can possibly do for your financial future.
What do you need a credit repair company to do for you?
A good place to start when determining which credit repair company is best for you is to figure out what needs to be done to improve your credit. The process of repairing your credit can involve much more than simply disputing your credit with the credit bureaus. You should make sure to use a credit repair company that can fulfill all of your credit needs.
When most people think of credit repair they think of a process that has become known as credit report repair. When working to repair your credit using credit report repair, a credit repair company is using your rights under the Fair Credit Reporting Act to dispute certain items in your credit reports directly with the credit bureaus. This element of credit repair has helped many people with erroneous, incomplete, or unverifiable information on their credit reports improve their credit scores.
While credit report repair is a good start, many people find that it is not enough. Many leading credit repair companies will also work directly with your creditors using a variety of tactics to get them to stop reporting the negative accounts to the credit bureaus. They may also work with collections agencies and others to get them to stop reporting negative accounts or change they way the accounts are reported. A credit repair company may even go so far as to challenge the legitimacy of a reported debt.
Depending on your current credit situation, you may be best served by a credit repair company specializing solely in credit report repair or one that can also provide a full catalog of credit repair services.
How can I tell if a credit repair company should be trusted?
Unfortunately, credit repair is an industry that has received a bad reputation because of the publicity afforded to credit repair scams. While fraudulent credit repair firms tend to be shut down quickly, it is still in your best interest to learn how to identify the differences between a legitimate credit repair service and a credit repair scam.
An easy way to do this is to know a few of the laws that govern credit repair companies. These laws as defined in the Credit Repair Organizations Act were designed to protect you from credit repair scams while also protecting your right to get help with repairing your credit reports.
Another way you can find out about a specific credit repair company is to look up their BBB (Better Business Bureau) reports. The BBB keeps notes on complaints made against companies. If the BBB report for a credit repair company lists multiple unresolved complaints or an overall low rating, you should be wary of the company. In addition, beware of any credit repair company that does not list credit repair services as one of their offerings in their BBB filing. The BBB has very strict standards for credit repair companies so many fraudulent companies will not report to the BBB that they offer credit repair.
Nov
15
Bad Credit Repair – Do it Legal and Right!
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Dewey Kearney asked:
There’s a lot of bad credit repair offers on the web today making bold claims to “increase your credit score by 100 points in 30 days! Guaranteed!” Or something like that. But beware! These bad credit repair systems can end up making your credit worse in the long run.
So what do you do if you’re faced with extreme errors? For instance, a mortgage or car company that keeps reporting your payments as late, even though you’ve caught up (this happened to a friend of mine). These types of dings on your credit can keep you from getting good interest rates, and may even cause you to be turned down flat by lenders! It is estimated that 79% of all credit reports contain errors. That’s a lot of errors and these errors cost Americans millions of dollars in interest every year.
But going head on with a mortgage or auto lender is like the proverbial “tilting at windmills.” Once they ding your credit – they won’t write a letter to the credit bureau retracting it! That would open them up to all kinds of liability issues. This is when you need to seek credit repair legal advice.
But before you seek bad credit repair advice (from an attorney or any other company) we wanted to give you some helpful information so that you can make a more informed decision about what to do.
What Exactly is Credit Repair?
Credit repair is the term that refers to challenging inaccurate, misleading, or unverifiable information on credit reports to improve the credit score.
Is Credit Repair Legal?
Yes, but there are illegal credit repair programs you should be aware of! For example, while it is legal to challenge negative items on your credit reports that you believe to be inaccurate, misleading or unverifiable, the accurate information is supposed to remain on your credit report.
It is also entirely illegal to create a “new” identity by applying for an Employer Identification Number (EIN) to use instead of your own Social Security Number. An EIN number is the number that the IRS gives to a corporation for tax purposes. To use this for credit repair is called file segregation – in order to escape responsibility by hiding one’s credit history. The use of File Segregation is a crime and can result in fines or serious jail time. This is a road you don’t want to go down.
Why Should I See A Credit Repair Law Firm And Not Just Get One Of Those “Do It Yourself” Credit Repair Systems?
First off – major errors are very hard to remove on your own.
A TRUE STORY: I have a friend who filed for bankruptcy in New York. She paid off all her debts and the bankruptcy was discharged. About 6 months later a SECOND bankruptcy filing appeared on her credit, along with a discharge. Then a THIRD one! This made her look like someone who abuses the system (filing for bankruptcy to stop collections, then canceling it without paying her bills). Needless to say her score was absolutely tanked! It took her over 18 months to get just ONE of the mistaken bankruptcies removed. She’s still working on the second one today.
Secondly – these supposed “sure-fire” credit repair systems might ruin your credit! Many of them encourage you to (or claim they will do it for you) challenge everything on your credit (good AND bad). Unfortunately this can result in removing the “good stuff” also. And as any lender will tell you, NO credit history is often times worse than BAD credit history!
A TRUE STORY: I sell cars in Phoenix Arizona and imagine my surprise when I pulled a 52-year old customers credit one day and all that was there was his name! ZERO credit score, ZERO open loans (or closed loans for that matter). He might as well been born yesterday. The thing was, he had an open car loan! So the banks knew he had “washed” his credit, which made him look suspicious. Unfortunately no bank would touch him at any rate of interest so he went home without a new vehicle that day.You may think I made this up because you have been told it wasn’t possible, well, it is possible. I saw it with my own eyes.
This type of credit repair is illegal! If an item is old and questionable, that can be challenged and removed. A good credit attorney will know the difference and keep you out of trouble and get these items removed, thus improving your credit score.
Aren’t There Laws Regulating The Credit Repair Industry?
There are indeed. The most prominent one is theCredit Repair Organizations Act (CROA). This became law in 1996 to protect the public from unfair and deceptive advertising practices in the credit repair industry. Additionally, the Federal Trade Commission (FTC) investigates complaints about credit repair organizations and takes appropriate legal action. Unfortunately it takes them a long time to operate and you could have your credit damaged further by using one of these companies.
Here Is How You Can Avoid Becoming A Victim Of Unscrupulous Credit Repair Companies.
· Avoid any credit repair company that will not tell you your legal rights and what you can do yourself for free.
· Avoid any credit repair company that tells you to relax and let them do it all. In other words, don’t contact the credit bureaus yourself.
· Avoid any credit repair company that tells you they will dispute everything (good, bad or ugly).
Avoid any credit company that suggests creating a “new” credit identity – and then get a new credit report by applying for an Employer Identification Number (EIN) to use instead of your Social Security Number. Remember – This is illegal and can have serious consequences.
Talk to a real credit repair agency. We have an excellent credit law firm on our site that specializes on LEGAL credit repair! I would invite you to go there and see for yourself how they can help solve your problems.
There’s a lot of bad credit repair offers on the web today making bold claims to “increase your credit score by 100 points in 30 days! Guaranteed!” Or something like that. But beware! These bad credit repair systems can end up making your credit worse in the long run.
So what do you do if you’re faced with extreme errors? For instance, a mortgage or car company that keeps reporting your payments as late, even though you’ve caught up (this happened to a friend of mine). These types of dings on your credit can keep you from getting good interest rates, and may even cause you to be turned down flat by lenders! It is estimated that 79% of all credit reports contain errors. That’s a lot of errors and these errors cost Americans millions of dollars in interest every year.
But going head on with a mortgage or auto lender is like the proverbial “tilting at windmills.” Once they ding your credit – they won’t write a letter to the credit bureau retracting it! That would open them up to all kinds of liability issues. This is when you need to seek credit repair legal advice.
But before you seek bad credit repair advice (from an attorney or any other company) we wanted to give you some helpful information so that you can make a more informed decision about what to do.
What Exactly is Credit Repair?
Credit repair is the term that refers to challenging inaccurate, misleading, or unverifiable information on credit reports to improve the credit score.
Is Credit Repair Legal?
Yes, but there are illegal credit repair programs you should be aware of! For example, while it is legal to challenge negative items on your credit reports that you believe to be inaccurate, misleading or unverifiable, the accurate information is supposed to remain on your credit report.
It is also entirely illegal to create a “new” identity by applying for an Employer Identification Number (EIN) to use instead of your own Social Security Number. An EIN number is the number that the IRS gives to a corporation for tax purposes. To use this for credit repair is called file segregation – in order to escape responsibility by hiding one’s credit history. The use of File Segregation is a crime and can result in fines or serious jail time. This is a road you don’t want to go down.
Why Should I See A Credit Repair Law Firm And Not Just Get One Of Those “Do It Yourself” Credit Repair Systems?
First off – major errors are very hard to remove on your own.
A TRUE STORY: I have a friend who filed for bankruptcy in New York. She paid off all her debts and the bankruptcy was discharged. About 6 months later a SECOND bankruptcy filing appeared on her credit, along with a discharge. Then a THIRD one! This made her look like someone who abuses the system (filing for bankruptcy to stop collections, then canceling it without paying her bills). Needless to say her score was absolutely tanked! It took her over 18 months to get just ONE of the mistaken bankruptcies removed. She’s still working on the second one today.
Secondly – these supposed “sure-fire” credit repair systems might ruin your credit! Many of them encourage you to (or claim they will do it for you) challenge everything on your credit (good AND bad). Unfortunately this can result in removing the “good stuff” also. And as any lender will tell you, NO credit history is often times worse than BAD credit history!
A TRUE STORY: I sell cars in Phoenix Arizona and imagine my surprise when I pulled a 52-year old customers credit one day and all that was there was his name! ZERO credit score, ZERO open loans (or closed loans for that matter). He might as well been born yesterday. The thing was, he had an open car loan! So the banks knew he had “washed” his credit, which made him look suspicious. Unfortunately no bank would touch him at any rate of interest so he went home without a new vehicle that day.You may think I made this up because you have been told it wasn’t possible, well, it is possible. I saw it with my own eyes.
This type of credit repair is illegal! If an item is old and questionable, that can be challenged and removed. A good credit attorney will know the difference and keep you out of trouble and get these items removed, thus improving your credit score.
Aren’t There Laws Regulating The Credit Repair Industry?
There are indeed. The most prominent one is theCredit Repair Organizations Act (CROA). This became law in 1996 to protect the public from unfair and deceptive advertising practices in the credit repair industry. Additionally, the Federal Trade Commission (FTC) investigates complaints about credit repair organizations and takes appropriate legal action. Unfortunately it takes them a long time to operate and you could have your credit damaged further by using one of these companies.
Here Is How You Can Avoid Becoming A Victim Of Unscrupulous Credit Repair Companies.
· Avoid any credit repair company that will not tell you your legal rights and what you can do yourself for free.
· Avoid any credit repair company that tells you to relax and let them do it all. In other words, don’t contact the credit bureaus yourself.
· Avoid any credit repair company that tells you they will dispute everything (good, bad or ugly).
Avoid any credit company that suggests creating a “new” credit identity – and then get a new credit report by applying for an Employer Identification Number (EIN) to use instead of your Social Security Number. Remember – This is illegal and can have serious consequences.
Talk to a real credit repair agency. We have an excellent credit law firm on our site that specializes on LEGAL credit repair! I would invite you to go there and see for yourself how they can help solve your problems.
Nov
15
Fico Offers Credit Repair Tips
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Jim Kemish asked:
Credit Repair in the News
Credit repair is more important than ever. In a recent interview with MarketWatch, a Wall Street Journal website, the Consumer Operations manager for the MyFICO division of Fair Isaac spoke out about the importance of checking your credit reports. In the words of the article, “There may be some surprises waiting for you.”
A New Credit Repair Landscape
Creditors everywhere have tightened their guidelines. This new credit environment has made credit repair more important than ever before. And to make things even more difficult in these already challenging times, creditors have begun to reduce and close credit cards in order to limit their own risk exposure.
The Limit Reduction Problem
This action is doubly hard for consumers. First, these limit reductions are happening unexpectedly, even to those who have never made a late payment. And second, and even more damaging, is the snowball effect that follows. A major part of your credit score is based on the relationship between your current balance and your credit limit. When a creditor cuts your limit your balance-to-limit ratio increases and your credit score will fall, through no fault of your own.
The Snowball Effect
And the snowball starts rolling. Once the first creditor drops a limit and your scores fall, other creditors are likely to drop your limits as well. And the lower your scores the more prone you will be to this perfect storm of credit repair trouble. What to do?
Good Credit Repair Advice
The Consumer Operations Manager for MyFICO suggests that you do everything in your power to insure that your credit report is as clean as possible and your scores are optimized. And don’t make the mistake of thinking that paying your bills on time (as important as it is) is you need to do. Credit repair knowledge is power. Here is a summary of his credit repair tips, and our extrapolation.
Check Your Credit Reports
Look for changes in your account limits. And while you’re at it, check for errors. Errors come in many shapes. Derogatory information should cease reporting, generally, after seven years. You should know that the seven year reporting period clock starts on the date of the original default with the original creditor. The original default was the first reported late payment in the sequence that led to the charge off or collection status. Collectors cannot reset the clock with subsequent reporting. And while we are on the subject of collectors, you should know that if a collector no longer owns the debt, he is supposed to remove the account entirely from your credit report. When in doubt, challenge the item with the credit bureaus or hire a credit repair professional to manage the process for you.
Don’t Get Close to Your Credit Card Limits
A significant percentage of your credit score is based on your balance-to-limit ratio. Reduce your balances as much as possible. Less than 20% of your limit is the optimal balance. Many people are blindsided by precipitous drops in the scores when they max out a card, even when they have never been late on a payment.
Keep Accounts Active
Use your cards to keep them alive. Dormant cards are in danger of being closed by creditors and unless you have plenty of open accounts this could cause a drop in your scores and send you in search of credit repair solutions.
Pay Your Bills on Time
This seems like a no-brainer, but it is so important. Make sure you understand the impact your purchases will have on your budget. Try not to let yourself get spread too thin. A single late payment can have a big effect on your scores, and may even trigger adverse action, such as limit reduction, by your creditors.
Don’t Apply for New Credit Cards
We have warned against store cards for years, and MyFICO agrees. Store cards can be credit repair ******* as they often present a triple threat. First, you will have an inquiry. Second, you will have a new account which will weigh down your credit scores for several months. And last, and worst, is the fact that most store cards offer a credit limit only marginally over the amount of your purchase. Put these together and you get credit repair trouble.
Call for Credit Repair Help
If you are confused by all of the components of credit report and score management, or don’t have the time to handle the task on your own, don’t give up. Call a credit repair professional for help. A credit repair professional will manage the process for you and insure that everything possible is done to optimize your credit. Good luck! Copyright © 2008 James W. Kemish. All Content. All Rights Reserved.
Credit Repair in the News
Credit repair is more important than ever. In a recent interview with MarketWatch, a Wall Street Journal website, the Consumer Operations manager for the MyFICO division of Fair Isaac spoke out about the importance of checking your credit reports. In the words of the article, “There may be some surprises waiting for you.”
A New Credit Repair Landscape
Creditors everywhere have tightened their guidelines. This new credit environment has made credit repair more important than ever before. And to make things even more difficult in these already challenging times, creditors have begun to reduce and close credit cards in order to limit their own risk exposure.
The Limit Reduction Problem
This action is doubly hard for consumers. First, these limit reductions are happening unexpectedly, even to those who have never made a late payment. And second, and even more damaging, is the snowball effect that follows. A major part of your credit score is based on the relationship between your current balance and your credit limit. When a creditor cuts your limit your balance-to-limit ratio increases and your credit score will fall, through no fault of your own.
The Snowball Effect
And the snowball starts rolling. Once the first creditor drops a limit and your scores fall, other creditors are likely to drop your limits as well. And the lower your scores the more prone you will be to this perfect storm of credit repair trouble. What to do?
Good Credit Repair Advice
The Consumer Operations Manager for MyFICO suggests that you do everything in your power to insure that your credit report is as clean as possible and your scores are optimized. And don’t make the mistake of thinking that paying your bills on time (as important as it is) is you need to do. Credit repair knowledge is power. Here is a summary of his credit repair tips, and our extrapolation.
Check Your Credit Reports
Look for changes in your account limits. And while you’re at it, check for errors. Errors come in many shapes. Derogatory information should cease reporting, generally, after seven years. You should know that the seven year reporting period clock starts on the date of the original default with the original creditor. The original default was the first reported late payment in the sequence that led to the charge off or collection status. Collectors cannot reset the clock with subsequent reporting. And while we are on the subject of collectors, you should know that if a collector no longer owns the debt, he is supposed to remove the account entirely from your credit report. When in doubt, challenge the item with the credit bureaus or hire a credit repair professional to manage the process for you.
Don’t Get Close to Your Credit Card Limits
A significant percentage of your credit score is based on your balance-to-limit ratio. Reduce your balances as much as possible. Less than 20% of your limit is the optimal balance. Many people are blindsided by precipitous drops in the scores when they max out a card, even when they have never been late on a payment.
Keep Accounts Active
Use your cards to keep them alive. Dormant cards are in danger of being closed by creditors and unless you have plenty of open accounts this could cause a drop in your scores and send you in search of credit repair solutions.
Pay Your Bills on Time
This seems like a no-brainer, but it is so important. Make sure you understand the impact your purchases will have on your budget. Try not to let yourself get spread too thin. A single late payment can have a big effect on your scores, and may even trigger adverse action, such as limit reduction, by your creditors.
Don’t Apply for New Credit Cards
We have warned against store cards for years, and MyFICO agrees. Store cards can be credit repair ******* as they often present a triple threat. First, you will have an inquiry. Second, you will have a new account which will weigh down your credit scores for several months. And last, and worst, is the fact that most store cards offer a credit limit only marginally over the amount of your purchase. Put these together and you get credit repair trouble.
Call for Credit Repair Help
If you are confused by all of the components of credit report and score management, or don’t have the time to handle the task on your own, don’t give up. Call a credit repair professional for help. A credit repair professional will manage the process for you and insure that everything possible is done to optimize your credit. Good luck! Copyright © 2008 James W. Kemish. All Content. All Rights Reserved.