Archive for the ‘credit report’ Category
admin on March 13th, 2009
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Now more than ever before, radio and television advertising is flooded with ads purporting to resolve your debt and credit issues. Are these debt settlement firms a panacea or another pitfall? If you’re not careful, you will find yourself not climbing out of the financial hole you’re in, but digging yourself deeper into debt.
Credit counseling is a good way to get started. You will find most reputable agencies are working with clients to ensure that your income matches your expenses at a minimum. Ideally, you want your income to exceed your expenses, but you need to get to break-even before taking the next step. It starts with curbing your spending. It moves onto establishing a solid budget in order to get income and expenses into balance. Moving beyond that - the work begins to initiate meaningful savings plans.
For those in the most serious situations, many firms now offer a fee-based debt management system to help the client restructure and repay their obligations. These are most often offered on a percentage basis or a monthly fee basis with you, the client, paying money to the debt management firm. From that, they pay your obligations and take their cut.
So what’s the pitfall? Too many people are still using their credit cards. They’re not budgeting for anything. They throwing good money after bad, bridging the gap on one end of the equation with the "help" of the debt management company while still supplementing their income with credit card spending. Not good.
The lure of an attractive advertising campaign can be strong. The television or radio extends its imaginary hand, promising to "eliminate your debt." It’s hard, when you’re drowning in a financial morass, not to reach out and grab hold of that helping hand. Truth be told… anyone claiming to be able to "eliminate your debt" is highly unlikely to back up that promise. Negotiate new terms on your behalf? Probably. Consolidate your debt into "one manageable monthly payment?" Sure, if you stop increasing your debt load.
Never forget, you can always go to your Better Business Bureau in order to ascertain the quality of the firm you are intending to use. You will see the firms’ ratings with regard to overall level of service and customer complaints and are awarded a letter grade of A+ (being the best) to F (for failure). You must use due diligence!
Other typical pitfalls and issues to avoid:
- Companies that offer you a document that claims to absolve you of all of your debt.
- Companies that charge fees "up-front" or fees that are unreasonable steep.
- Lenders can still sue you even though you’re hoping to settle.
- The process can take several years to accomplish, with the industry average being about 36-months.
- This will negatively impact your credit and debt interest will continue to accrue during the process.
- Companies that advise you to stop communicating with your lenders or stop making payments to your lenders.
Tips and information for you:
- Always communicate with your lenders. The worst thing you can do is cut them off.
- Find a firm that is certified with the National Foundation for Credit Counseling.
- Lenders would rather get something instead of nothing.
- You will probably have to pay income tax on the amount of the forgiven debt.
- Do not sign any contracts or agreements until you’ve read and understood them completely.
- Check the laws in your state - some, for instance, prohibit the collection of fees earlier than "half-way" through the process.
Most importantly, client beware. As with any industry, there are plenty of bad apples out there who will make your situation potentially far worse. Emails and websites tout a way to consolidate bills into one monthly payment without borrowing; stop credit harassment, foreclosures, repossessions, tax levies and garnishments; wipe out your debts; or rid bad credit. These offers often involve bankruptcy proceedings , but they rarely say so.
Proceed with caution.
admin on July 7th, 2008
A mathematical formula is used by the three different credit bureaus located in the United States of America in order to help determine an individual’s worthiness when it comes to credit. This is, in turn, used in order to determine how much money an individual might receive when it comes to a loan or whether or not they are worthy of receiving something such as a rental apartment or home in which to live. The newest way to measure credit is using the FICO system. Using this system, an individual can have a credit score that falls within the range of 350-850. In your credit report, your previous actions are calculated in order to make up specific percentages which make up your total credit score.
Credit Inquiries: 10% - This does not include your personal inquiries of your own credit report.
Types of Credit Used: 10%
Credit History Length: 15%
Debt to Income Ratio: 30%
Payment History: 35%
All of the loans, debt, credit cards and billing accounts that you have should be included on your credit report. You can get a feel for how good or bad your credit score is by looking at you credit inquiries, credit used (typically either revolving or installment), length of time that you have been building up your credit, your debt ratio (which looks at how much money you are bringing in as an income and how much money you are spending as debt) and the history of the payments that you have made/are making.
Not all things stay on your credit report forever. While these old factors can often be accessed, most of the time companies or individuals who are making inquiries about your credit are not going to look that far back, beyond the current credit page. Bankruptcies, in the United States, are on an individual’s credit report for seven years. Typically, after this time, the bankruptcies will not be easily visible any more. Even though these things may not be on a person’s credit report seven years later, there is the chance that the information will be factored into their overall credit score.
admin on July 3rd, 2008
There are a number of ways to get your credit report. One of the easiest and most affordable ways to do so would be to go to www.AnnualCreditReport.com. By using this site, which is backed by the Federal Government of the United States of America, individuals can get a free report from each one of the three credit bureaus, once every twelve months. However, once you get the report it can be slightly confusing. It’s not just a simple number like they show on television. Here are some hints for decoding your report:
There are negative credit indicators and positive credit indicators. On your report, you will see how many potentially negative indicators you have on your credit report and how many accounts you have that are positive or in good standing.
There are a number of codes that are made up of a letter and a number. These codes are made up of R1, R2, R3, R4, R5, R6, R7, R8, R9, I1, I2, I3, I4, I5, I6, I7, I8 and I9. R stands for revolving credit and I stands for installment credit.
The numbers indicate the payment schedule. 1 means the payment was never late, 2 means the payment has been 30 days late, 3 means the payment has been 60 days late. The numbers continue to go up and the corresponding increments are 90 days, 120 days, that payments are being made under the wage earner plan, repossession and charge off.
In recent years, additional numbers and letters may be found. The letter O is the code for ‘Open’. The number zero (0) is code for approved, and 1 is paid as agreed. In this version, the FICO version, the numbers 2-8 correspond to the numbers stated for 1-8 in the previously created code.
In the FICO version, the number 9 corresponds to being charged off because of bad debt. J stands for Joint, I for Individual, U for Undesignated, A for Authorized User, T for Terminated, M for Maker, C for Co-Signer, B for on the Behalf of another Individual and S for Shared. This version is quickly becoming the more popular way to code credit reports.
admin on July 2nd, 2008
You may be initially nervous about writing a credit dispute letter. Of course, you want it to sound professional, but you do not want it to come off as pretentious. By using plain language and being honest, you can easily and quickly whip up a respectable and effective credit dispute letter.
Get the Address for the Complaint Department:
In order to make sure that your letter does not get passed around from department to department, address the letter to the complaint department within the credit bureau that you are contacting. This is a quick and easy way to speed up the process of your letter and your complaint getting addressed by the credit company.
Know the Format for a Business Letter:
There is a formal way to write a business letter. This includes your contact information and date on the upper right hand portion of the letter, the company’s information on the left hand side underneath the lines used for your contact information and the body of the letter following the common phrase “To Whom it May Concern:”. In order to help with this, there are a number of business letter templates online you can locate using your favorite search engine and the phrase “business letter template” or “credit dispute letter template”. Try looking at Microsoft’s® community sample letter at http://office.microsoft.com/en-us/templates/TC300005241033.aspx.
Include a Copy:
Make sure to add a copy of your credit report to your letter packet. Do not include the original credit report because if the mail gets lost, you may not get it back. This will also make sure that the complaint department can see what you are concerned about in the report.
In the Body…:
Don’t be vague in your letter. Make sure that you include the specific concerns that you have. In your packet to the complaint department, make sure to include a copy (NOT THE ORIGINAL) of your credit report. Highlight, circle or otherwise mark the concern that you have on the copy of your credit report so that the complaint department can easily identify and locate your concern on your credit report.
admin on July 1st, 2008
Credit disputes are more common now due to the increase in identity theft and identity fraud. While these occurrences are not at all considered to be mandatory for a credit dispute, they do make up a discernable amount of credit disputes that are submitted and reported. Nonetheless, whether a person is disputing their credit due to identity theft, identity fraud or the individual’s simple belief in an error having been made, the process for disputing the credit reporting is the same.
There are three credit bureaus in the United States of America to which individuals can dispute credit aspects of their report. Some people prefer to send disputes to all three of the credit bureaus, but this is not always necessary. In the event that a person has a dispute, they need to contact their chosen credit bureau(s) on which they see the disputed item. Here are the following contact information links and numbers that you will need in order to dispute an aspect of your credit report.
Equifax:
Phone: 800-685-1111
Website: www.Equifax.com
Experian:
Phone: 888-EXPERIAN
Website: www.Experian.com
TransUnion:
Phone: 800-916-8800
Website: www.TransUnion.com
For credit disputes, you need to have a recent credit report and credit report number, which is a number on the top of your credit report, used to identify the report. Typically this report needs to be dated within 90 days of your credit report dispute filing. You can get a free credit report – liegitmately free and not a trial version – from www.AnnualCreditReport.com. One free credit report from each of the three bureaus is permitted each year or every twelve months.
Let the credit bureau know in writing what you think is inaccurate on your reprt. Send letters to the creditor to the same effect as well. When you send a letter to the creditor(s) include a copy of the affected items on your credit report. Remember to include COPIES and not the ORIGINALS of the credit report.
