Archive for the ‘Misc.’ category

Bankrupty, your credit score and the debt trap

October 29th, 2008

Personal Bankruptcies on the rise
Three years after the passing of new legislation aimed at reducing personal bankruptcies, 2008 filings approach the one-million mark.

Credit crunch lowering consumer’s credit scores 
It’s a problem common to many Americans as today’s credit crunch is putting pressure on consumers like Ms. Page to pay off or make a significant dent in their debt. To accomplish that, credit counselors say, consumers need a plan.

The Debt Trap: How Banks Push Troubled Borrowers Deeper Into Debt
Big Finance’s pursuit of struggling American consumers is one of the overlooked causes of the debt boom and the resulting crisis.

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Fix your credit by lawsuit? Yes you can

October 27th, 2008

If you have decided to take action against a collection agency for violating the FDCPA we have some tips for you. It’s not easy but it is very do-able and with a little education about the process you can limit the risk of getting your case dismissed.

Do you have a case
First off you need to determine what they did and if it qualifies for a law suit? If you were nothing more than inconvenienced a time or two you may lose or the judge may dismiss the case altogether. Suing a collection agency is meant to give you closure and perhaps damages for a violation but too many consumers run into court and only end up annoying everyone because their case is so flimsy. So what is a good case? Just read some of the successful lawsuits filed by the FTC against collection agencies.

They usually involve repeated phone calls at all hours, threats, harassment or intimidation or obvious violations such as refusing to validate the debt at your request yet continuing to try and collect. Those are all good reasons to take action. It’s also important to show what you did before you took that final step and filed your lawsuit. Keeping good records and receipts is paramount to building a good case.

Building the case
Prior to filing your lawsuit you should have asked the collection agency to stop whatever it was they were doing. For example if you told them to stop calling you and they refuse then you need to follow up with a letter to the collection agency certified mail- return receipt requested putting your demand in writing. Then if the agency refuses to stop you have proof that a letter was sent and received by them and yet they continued. Just claiming you told them by phone doesn’t preserve your rights.

If you have witnesses to the harassment then take notarized statements from them to back up your case. If you sent them a validation of debt request certified mail but they never responded then you have the certified receipt with the person’s signature to prove you asked. These paper trails can be the difference between winning and losing so document everything. No matter how many letters, faxes, emails or phone calls you made, take time to include copies of your phone bills, emails or fax confirmations so that you can quickly show the judge the agency’s neglect.

Serving the Collection Agency
Where do you sue?
How much can I get?
What if I want to sue them in federal court
What if I want to sue them in state court
Can I go Pro Se

Read more about this topic or find related articles about credit and collection issues>

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Don’t let yourself be taken by shady credit repair offers

October 25th, 2008

This economy is causing consumers with credit issues to become more desperate and seek out quick fixes to their credit problems rather than do the real work needed to clean up credit issues. We’ve been educating consumers on line since 1995 about do it yourself credit repair, and more than ever, consumers should be very careful when choosing a credit repair company to help clean up their credit.

Credit repair agencies are legal but they must follow certain laws to make sure they comply.  A credit repair company who is promising all sorts of major changes to your credit reports should be avoided. A credit repair company has to follow the Credit Repair Organizations Act (CROA) and they cant charge you in advance for work they have yet to do, nor can they make exaggerated claims of guaranteed removals.

This week we told you about the latest crackdown by the FTC against these shady offers and according to the L.A Times, a credit repair company based in Woodland Hills California has been targeted by the FTC for violating such laws.  Success Credit Services was accused in an FTC civil suit of violating the Credit Repair Organizations Act by contending that it could quickly clean up credit reports by removing legitimate negative items, such as late payments, bankruptcies and tax liens.

You’d think by now, with all the crackdowns across the nation by the FTC, that credit repair companies would get a clue that they cannot get away with taking our money and doing nothing. They are sitting ducks for groups like the FTC and the Attorneys General. It’s a risk these companies should not be taking.

There’s a reason we decided in 1995 to bring credit education online to consumers nationwide. People were desperate for information about how to clean up their credit reports and not get ripped off in the process. By educating you to do the work yourself, you are going to not only save money but you’ll be sure to stay in control of exactly what is being done along the way. A shady credit repair company CAN make your credit worse.

We’ve never wanted to go into the business of fixing your credit for you and there’s a simple reason for that. We feel it’s very possible to do the work yourself by simply following some key educational steps. It’s that simple. Learn to understand the credit industry and how it works and you can take on the task of credit issues yourself. With what you learn, you could see dramatic improvements in your credit reports and spend next to nothing to do it.

Sure, there are some people that just do not want to undertake the task themselves, and they have the right to hire someone to do it for them, but just realize you are hiring someone to do pretty basic tasks like letter writing and debt negotiating.  What you are paying for is a service to simply do “the steps” you don’t want to bother with. That’s fine. You are paying a “service fee”. Just make sure the company is reputable and I’d recommend checking their record with the BBB (Better Business Bureau), completely reading their terms before you sign anything, and most importantly research them online. You can uncover a lot by reading what past customers have to say about them.

You don’t have to fall victim to these credit correction scams. Choose wisely just as you would choose a bank, mechanic, or mortgage broker. If the service is offering all sorts of exaggerated promises then it’s a pretty sure bet that you are going to get taken. These types of so called “businesses” are just waiting for the desperate buyer.

There is no reason that all rational should fly out the window when choosing a credit repair company. Many of these crackdowns could be avoided all together if consumers would use great caution when dealing with credit repair companies and do their homework. Common sense should prevail and if it doesn’t feel quite right then trust your instinct.

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Tips for a better credit report and score

October 20th, 2008

To get a good credit score the first tip is to pay your bills on time. It does not matter how bad your credit history is you must pay all your bills on time. This will help build a positive payment history on your credit report. This is the second most important factor when calculating your credit score.

It also matters how much time has passed between derogatory items on your credit report and when your score is calculated. After an amount of time, allegedly four years, negative items on your credit are not weighed as heavily. Thus it is very important for you to build a positive payment history.

The next tip is to remove any inaccurate information. Unfortunately our credit reporting system has many flaws. Often a divorce will result in bad credit. The divorce judge will divide the debts between both parties. Then if one of the parties defaults on a loan, even though they were court ordered to pay, it will be reported on both parties credit.

You can also have bad credit due to a lender mistake. It happens all the time, where the amount due changes and due to a mistake on the lenders side you are never notified and keep making your regular payments. Yet the whole time your credit is being ruined with derogatory marks.

You can also have a negative mark due to stolen identity, or just a credit reporting error. These are very common, where someone somewhere makes a mistake but your credit pays the price.

These are all inaccurate marks on your credit report. You should dispute and remove all of these marks.

Congress passed legislation to protect people just like you that find themselves in this situation. The Fair Credit Reporting Act says that inaccurate information must be removed.

To dispute an inaccurate mark you can hire a credit repair service. They will draft a dispute letter and send it to each credit bureau that is reporting the inaccurate listing. Or you can do this compose a letter yourself, however you should know that credit bureaus often do not conduct investigations based on one dispute letter.

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Is this financial crisis partly our fault

October 12th, 2008

Everywhere you turn you see the news talking of a plunging stock market, business bail outs and record number foreclosures.

Initially my thoughts are “What has this financial system done to us?” but on second thought, are we not intelligent enough as a society to have avoided financial collapse?

Just because a greedy bank tells you that you qualify for a mortgage ,did we not have enough sense of our own to know it was outside our budget? Did we consider the monthly payment for 30 years and factor in a slow economy or job loss?

These are the questions that one cant help but ask as it proves even more, now than ever- that we as a society are so undereducated in finances.  Financial literacy should be at the top of the governments list of things to do yesterday. If you cannot teach a person to be responsible with their finances then you should expect disaster.

Remember the term “Buyer beware? “That should not only go to avoiding scams, but the buyer also need be- aware. Aware of your finances, your family structure, your ability to manage your debt, retirement, your credit reports. Consumers often close their eyes and hope for the best and the result can be disastrous.

While it is the american dream to own a home, unfortunately, not everyone is capable of doing so. There is a huge responsibility that comes with homeownership that goes far beyond the application approval. We as consumers should have known better. We should have seen this collapse coming because of the sheer volume of sub prime loans that were being handed out to literally every Tom, Dick, and Harry. Default was inevitable. Couple that with an unstable economy and disaster was at our doorstep.

Now was must reap was we sow and work our way through this financial collapse. I have no doubt in the spirit of Americans and we will survive- but maybe this time around we will take responsibility for our own finances and not leave it in the hands of Wall Street and greedy lenders.

We need to take responsibility for our own future. Manage our jobs, our retirement, our credit reports, our debt. We cannot expect the government to take 100% of the blame in this financial mess. If it had turned out good, would we blame them then? If your home’s equity were up 10% would you be shaking your fist at the greedy bankers?

Did big brother charge up your credit cards and remodel your home for you? Did big brother tell you to buy two gas guzzling SUVs and eat out all the time? We all know there is a lot of blame to go around. No one got into this alone. People were in a feeding frenzy with easy loans and easy credit.

We helped  to get ourself into this mess and now we must help to get out. We cannot sit back and wait for handouts or for the market to fix itself. We need to start fresh and take inventory of our financial fitness and begin anew. Sure, we’ll see challenges all along the way but a slow and steady focus on the problem will win in the end.

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Court orders credit bureaus to clean up consumer credit reports

October 4th, 2008

We just covered this issue again last week in the members area. Old zombie debts that just live on and on, often outliving you. Our credit system is very unforgiving. If they don’t get you for 7 years from the bankruptcy, they’ll try to get you for another 6-10 through erroneous reporting, either on the suppliers end or the credit bureaus end.

It’s a vicious cycle and is it a wonder people give in and hire credit repair attorneys?

This court order is going to make some consumers and credit repair agencies very happy- and make their jobs easier when it comes to deleting negative trade lines that were part of a bankruptcy.

The issue is millions of debts that were included in a bankruptcy are being reported incorrectly as delinquent or past due with a balance. The debts, however, should be listed as “included in bankruptcy” with a zero balance. This can have a major impact on your credit score.

According to the WSJ; Erica Noe of Burke, Va., says an old debt on her husband’s credit file cost them their home — in part because it prevented them from being able to refinance their interest-only adjustable-rate mortgage last year. Her husband, Kenneth, had filed for Chapter 7 bankruptcy in 2002; in that proceeding, the court discharged his prior debts. Nevertheless, they were unaware that a previous $7,000 credit-union loan remained on his report, pulling down his credit score for several years.

“We thought that once we filed for bankruptcy, it would go away,” says Ms. Noe. “But it didn’t. It affected everything.” The 31-year-old nurse says they didn’t find out about the error until they tried — but failed — to refinance their mortgage. When the rate reset, the Noes’ monthly mortgage payments shot up by about $1,000; they lost their home to foreclosure last November. “It was a snowball effect,” she says. “Unfortunately, everything just kind of worked against us at the same time.

“I tried to fix the error on the report by calling the credit union and telling them to stop reporting,” she says. Currently, their lawyer, Robert Weed, is filing a separate lawsuit against Equifax and the credit union. Equifax declined to comment on an ongoing suit.

A recent court order requires the three major credit-reporting bureaus — Experian Group Ltd., Equifax Inc. and TransUnion LLC — to clean up the credit files of millions of consumers who have filed for Chapter 7 bankruptcy. The problem: Old debts, which are typically forgiven by the courts in a bankruptcy filing, are still being reported as active on many consumers’ credit reports.

The changes could be particularly important to borrowers now, as consumer credit tightens across the board. It is perhaps more important than ever for people to make sure their credit scores are accurate and as high as possible.

This ruling is expected to clean up the credit files — and potentially boost the credit scores — of an estimated six million to 10 million people who have filed for Chapter 7 bankruptcy but still had errors in their files, according to plaintiffs’ attorneys. Consumers with so-called zombie debt — old loans they may have paid off years ago that can resurface when an aggressive debt collector erroneously demands payment — are also likely to get some relief, if those debts also were discharged under Chapter 7 protection.

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Automatic complaint letters

September 29th, 2008

It’s fascinating the things you can find online. In the recent search archives here at N2credit.com blog, we discovered quite a few search strings for the following;

  • “Sample dispute letters”
  • “Write letter to collection agency”
  • “Complain about a company”
  • “Write letters of complaint to a credit bureau”
  • “Credit Repair letters”

This led me to do a little searching of my own. Although I already know that we offer sample collection, credit repair and creditor letters, I wanted to see what else was out there. I uncovered this humorous little site that offered a “complaint letter generator”. It’s very amusing because all you enter is the company’s name and wha-la- you have a long, rambling, and often pointless complaint letter.

I typed in “ABC Collection Agency” and look what I was rewarded with.

In my last letter, I claimed that I shall make every effort, especially in this limited space, to unmask ABC Collection Agency’s true face and intentions in regard to antidisestablishmentarianism, and that claim is even more true now. The rest of this letter is focused exclusively on ABC Collection Agency, not because I harbor any ill-will towards it but because if you read between the lines of its words, you’ll undoubtedly find that it’s the type of organization that will trump up any lie for the occasion, and the more of a thumper it is, the better ABC Collection Agency likes it. The great irony is that the biggest difference between me and ABC Collection Agency is that ABC Collection Agency wants to place stumbling blocks in front of those of us who seek value and fulfillment in our personal and professional lives. I, on the other hand, want to fight for what is right.

ABC Collection Agency will stop at nothing to irritate an incredible number of people. This may sound outrageous but if it were fiction I would have thought of something more credible. As it stands, finding the best way to oppose our human vices wherever they may be found — arrogance, hatred, jealousy, unfaithfulness, avarice, and so on — is a challenging problem indeed. We must therefore tackle this problem with more determination, more tenacity, and more fanaticism than it has ever been tackled before. Only then will people realize that if five years ago I had described an organization like ABC Collection Agency to you and told you that in five years it’d stir up trouble, you’d have thought me detestable. You’d have laughed at me and told me it couldn’t happen. So it is useful now to note that, first, it has happened and, second, to try to understand how it happened and how it is more than merely superficial. It’s über-superficial. In fact, ABC Collection Agency’s so superficial that its list of sins is long and each one deserves more space than I have here. Therefore, rather than describe each one individually, I’ll summarize by stating that ABC Collection Agency’s generalizations cannot stand on their own merit. That’s why they’re dependent on elaborate artifices and explanatory stories to convince us that ABC Collection Agency’s way of life is correct and everyone else’s isn’t.

While ABC Collection Agency puts on a good dog-and-pony show, I have a scientist’s respect for objective truth. That’s why I’m telling you that not only does ABC Collection Agency numb the public to the metagrobolism and injustice in mainstream politics, but it then commands its co-conspirators, “Go, and do thou likewise.” ABC Collection Agency likes to seem smarter than it really is. It therefore always amuses me whenever it cracks open a thesaurus, aims for intellectualism, misses, and lands squarely in a puddle of laughable frippery. If you don’t think that the best advice I can give to a group is to embark on a new path towards change, then you’ve missed the whole point of this letter. At one point, I actually believed that ABC Collection Agency would stop being so slimy. Silly me. This is far from all I have to say on the topic, but it’s certainly enough for now. Just remember one thing: ABC Collection Agency’s tirades have no place in a free, humane society of individual value, individual choice, and individual responsibility.

This letter would confuse the most coherent collection officer. What is my point, what do I want, what is my complaint? No one will ever know but I look incredibly intelligent even if I ramble on and make no point in my complaint.

Give it a try and if you find that you like the letter, simply cut some good parts out and paste it into your own complaint letter to a collection agency or creditor.

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Free credit repair tips | How to fix your credit for nothing

September 24th, 2008

Can I really fix my credit for free?

People always ask if it’s truly possible to fix their credit for free or for a few bucks in postage and credit report fees. The answer is absolutely yes. I think people often misunderstand credit repair and the word alone sends shivers up your spine. It has a negative connotation to it by nature. But the real truth is credit repair is slang for managing your credit. We should all be managing our credit because leaving it to the credit bureaus is surely credit suicide.

Order all three credit reports

Before you can do anything you need to admit there’s a problem. Sounds like rehab doesn’t it? Well your credit probably needs a little rehabbing. When was the last time you sat down and poured over all three credit reports? A year, five, ten! I wouldn’t be surprised if it were 10. People just don’t like to deal with their credit. It’s overwhelming and often you know that the inside is going to be ugly, even though you like to pretend on the outside that it’s pretty. No way around it, if you want to fix your credit, you have to look at it.

You can et your credit reports online. It’s quick, secure and you can print them out for future needs or save them to your hard drive.

Review all three credit reports

Sit down. Don’t do this standing up. You’re going to be here a while. Now that you have all three credit reports you need to organize the three bureaus separately. Remember, a credit bureau that may report an item may not necessarily be on the other and vice versa. Credit bureaus are all independent of each other so don’t lump them together. That can be very bad. It’s like yelling at the top of your lungs “Hey, Equifax, I gotta a charge off over here on Experian. Come get it”. You don’t want to tell one bureau that you have something negative from another. It just complicates things.

Jot down all the issues you uncover

Once you make a stack of the three separate credit reports, begin with one. Go over it and look for anything you think is questionable. ANYTHING. The good lil ole FCRA gives you the right to question anything that you believe is outdated, unverifiable or inaccurate. A credit bureau cannot assume what is or is not accurate. You have to tell them. Pay attention to anything negative. If you see collection accounts or charge offs then pay attention to the details. The LIES are always in the details. Collection agencies especially are notorious for changing dates of last activity to extend how long they have to report the item. It’s done to hold your credit hostage until you pay them. Typical negative items are collection accounts, charge offs, tax liens, bankruptcy’s, late payments etc.

Send dispute letters

Once you have identified what you’re going to dispute then make out your letters and send them out certified mail. You’ll need that receipt in case the bureau claims it never received your dispute. It’s not a big deal. Just swing by the post office and send them out with a cert mailing. You’ll be glad you did. Once you send the letters, the bureaus will have 30 days give or take 10 to reply. In that time they have to complete the investigation too. See where this is going… it’s not so easy and often this is how credit repair companies remove items. The bureaus have to ask the source to look up the info, get it back to them and then send it to you… Yep. It’s required.

Keep records

Make sure you keep a log of all your efforts. It makes thing so much easier when you begin follow up. Write down everything. We have a collection and credit log in our member area for this but you get the idea.

Wait for replies

Kick back and wait. You’ll start receiving updated credit reports by mail soon and it will have the results of the investigation for your review.

Follow up

Here’s where you need to pay attention. Once you get the results back, if the items were not deleted then look at the explanation. If the bureau tells you “the item remains “verified as accurate” then you have a right to send another letter along with a copy of the result and ask that they provide you with what information they received to allow them to claim its accurate. The credit bureau has to tell you how it was verfied, by who etc. This is another step to REAL credit repair because in follow up disputes, you’ll often remove more items.

Avoid the lure of scams

There are so many scams out there claiming to boost your credit score or wipe away your debts with the stroke of a key. Don’t buy into it. You’ll lose money and end up with nothing. Many so called credit repair companies are claiming they have all sorts of techniques. The most popular right now is the option to pay a monthly fee to ride on the coat tails of someone else’s good credit. The FTC and Fair Isaac have caught onto this and are finding ways to spot those. In addition, this method doesn’t do any good if you have bad credit because the bad credit is still there along with the newer good credit and you will still be denied loans. These tactics are scams period.

Rinse, Repeat

Keep this disputing and waiting method going until you have brought your credit up to its best possible status. Don’t expect miracles but DO be very happy with every little milestone. They all lead to a better credit report down the road. You may even get an investigation result back with four or five deletions on your first round. That’s exciting! By all means, don’t add more bad credit! Once you decide to take the steps to fix your credit then don’t let anything else land on there. If you have bills you haven’t paid, don’t wait for them to go to collections before you decide to act. Unless… Your plan is to wait for the assignment to the agency so you can get them to remove it for payment. This is what a lot of people think. It still DOESN’T remove the original creditors bad mark!

If you get stuck in the process or want to learn more, take a look at our DIY credit Repair Tools. It comes with two bonus credit repair books and over 40 sample letters, a chat forum, legal research tools and more! One time fee, lifetime access.

This free credit repair article is brought to you by CarreonandAssociates.com. You may use this article as long as the author tag stays in tact. Copyright. Do not remove tag

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