Bring Your Goals to Life!
Effective credit repair involves a systematic effort to clean up and reconfigure the content of your credit report. There is some work involved, and you want the results to last. A nationally recognized credit repair expert offers some tips on developing a personal budget that will carry your credit repair effort to the next level and bring all of your goals to life.
Taking Stock
Money comes and money goes. How do you spend your money? Organizing a budget does not have to be painful. Getting started can be challenging, but once underway you are likely to feel exhilarated. There is nothing like the feeling that comes from regaining control of your life. If you are starting a credit repair program, now is the time to implement a budget. It’s easier than you think. Just take one step at a time and you will reach your goal before you know it.
Your Philosophy
What do you really want? What is important to you? You want your credit repair effort to be successful, and you want financial security. What else is on the list? Think about your life. Think big. You can achieve anything you desire if you understand the relationship between the choices you make today and the future you picture for yourself tomorrow. Every decision you make counts. And in the world of money the right decision can have a geometrically positive effect.
The Joy of Security
One of the benefits of a budget is peace of mind. There is nothing worse than sitting down to pay bills and discovering a shortage in your checkbook. Living within your means insures that ends will meet. Of course there are always unexpected situations that can strain even a well-planned life. A properly structured budget will provide a cushion for those events as well. You will find that a budget is the perfect compliment to your credit repair program. It’s time to get ahead of your bills. The joy of financial security is within your reach.
Getting Organized
Are you ready to get started? Get some paper and a pen. It will be helpful to have your checkbook and your credit card statements handy too. Make a list of your obligations. Include everything you spend money on. Organize expenditures by category. Don’t ignore discretionary items like entertainment or dining out. If you spend it, create a category and write it down. Now add it up and compare the total to your monthly income. Many people are surprised that they spend more than they earn. Where do you stand?
Less Today, Much More Tomorrow
The time you invest in your credit repair effort will produce significant and lasting results, and the effort you make to live within your means will produce long-term gains far in excess of any short-term sacrifice. As you look at the list of items you spend money on it is time to think about your goals. What do you want? Do you want to purchase a home? Do you want to travel? Weigh the value of your goals against your current expenses. Consider that every dollar you save today will be worth many times more in the future. What can you do without? Are you ready to start building your future?
Pay Yourself First
It’s time to add a new category to your budget. This is the most important category of all, the one that most people never think to include. What is this category? It’s you! Make a category in your budget for yourself equal to ten percent of your income and put it at the top of the list. This ten percent will change everything. Your credit repair effort will pay off, your future will come to life, and all of your goals will become possible.
Better Scores Lower Costs
The creation of savings will impact your life in more ways than you might imagine. Savings brings confidence and the end of financial stress. And savings is the perfect credit repair insurance policy. Unexpected events will no longer threaten your ability to make your payments. Pay your bills on time and watch your credit scores approach perfection. Perfect credit delivers the gift of low-cost financing on every dollar you borrow. This can translate into many thousands of dollars in savings each year.
Savings Options
Over time, your savings account will grow. There are many ways to invest your money. It is wise to remember that higher returns are an indication of higher risk. Not all investment options will be appropriate for you. When the time comes you should interview several financial professionals to find one that you feel comfortable with. I also suggest that you take a trip to the library and pick up a selection of books about personal financial management. Educate yourself. Professional advice is valuable, but there is no substitute for knowledge. Good luck!
Copyright © 2007 James W. Kemish. All Content. All Rights Reserved.
Monday, June 30, 2008
Tuesday, June 24, 2008
Time for a Credit Repair Tune Up!
Every Point Counts!
Your credit score will determine the interest rate you pay on every dollar you borrow, from your car loan to your mortgage. Every point makes a difference! A nationally recognized credit repair expert explains how to give your credit score the tune up it needs.
Starting your Credit Repair Tune Up: Get Your Reports
A credit repair tune up does not have to be hard. If you break up the project into smaller tasks the whole job will be a breeze. Don’t be intimidated. Take it slow and you will get the job done. Each little step along the way can add points to your credit score and move you closer to your credit repair goals.
Credit Repair Made Simple - One Bureau at a Time
There are three credit bureaus, so you need to tune up three credit reports. Many people starting a credit repair effort are intimidated when they see their reports. The formats are unique and the information reported by each bureau is different. Don’t worry; you don’t have to work on all three reports at the same time. There is no economy of scale. Start with one report, do what needs to be done, and then move on to the next one. Slow and steady wins the race.
High Credit Limits
Begin your credit repair tune up with something easy. I suggest you get a highlighter and mark the high credit limits on your accounts, both installment and revolving. If you find an account with an underreported limit it is costing you points on your scores, possibly significant points. It is easy to correct a limit error, just dispute it with the offending credit bureau and attach a copy of a recent statement showing the correct limit. Your credit repair tune up is off to a good start.
Account Opening Dates
The age of each account has an impact on your credit scores. Credit repair rule number one: an old account is a good account. Highlight your account opening dates. If you find one that underreports an opening date you should contact the creditor and inform them of the error and ask them to report it correctly. You should also ask them for a letter indicating the account opening date and then submit it to the bureaus yourself. You will be surprised with the results…
Credit Repair and Collection Accounts
The sale of debt is so common in the collection industry that you may find a single collectable account reported many times on your credit report. Collectors that no longer own a debt are not allowed to report it to the credit bureaus. And yet there is no incentive for collectors to cease reporting when they sell the debt to another collector. If you see the same account being collected by more than one collector, dispute all but the most recent. They will be removed. Your credit repair tune up is really getting into gear.
Negotiating Uncollectable Collections
Collections may be collected through the courts for a limited amount of time determined by state law. These time limits are called statutes of limitation (SOL) and are usually surprisingly short. If a debt cannot be collected through the courts it cannot be enforced. Please note that the SOL is not the same as the reporting period limit for your credit report. So, you may want to negotiate these “uncollectable” collections as part of your credit repair effort. The collector will love to hear from you, and you might even get them to remove the account from your credit in exchange for payment instead of just reporting it as paid. Give it a try!
Paying Down Your Balances
If you have the ability to pay down revolving balances, go ahead and do it. The FICO scoring model puts a lot of emphasis on the ratio between your balance and your high credit limit - and the lower the better. Are you looking for quick credit repair results? Pay your balances down below 20% of the high credit limit. If your balances have been lingering near the limit wait until you see what lower balances can do for your scores!
Trimming Down Accounts
You need to have open accounts in good standing to have a good credit score. But you can also have too many accounts. Successful credit repair involves achieving the right balance of accounts, so go ahead and close a few. But it is important to pick the right ones to close. MasterCard and Visa cards are the most valuable for your credit scores. Store cards have little value and should be the first to go. When you pick the accounts to close, please remember that old accounts are good accounts.
Credit Repair and New Accounts
If you do not have any open MasterCard of Visa accounts it’s time to open a couple. Two is a good number! If your credit scores are too low to get approved for regular unsecured credit cards, get two secured cards. Secured credit cards are the perfect credit repair tool. It’s easy and you won’t get denied. Remember, no credit, no credit scores. Your scores are a measure of your ability to pay and manage your debt. Get some credit cards and prove that you are a good risk. You scores will thank you!
Copyright © 2007 James W. Kemish. All Content. All Rights Reserved.
Your credit score will determine the interest rate you pay on every dollar you borrow, from your car loan to your mortgage. Every point makes a difference! A nationally recognized credit repair expert explains how to give your credit score the tune up it needs.
Starting your Credit Repair Tune Up: Get Your Reports
A credit repair tune up does not have to be hard. If you break up the project into smaller tasks the whole job will be a breeze. Don’t be intimidated. Take it slow and you will get the job done. Each little step along the way can add points to your credit score and move you closer to your credit repair goals.
Credit Repair Made Simple - One Bureau at a Time
There are three credit bureaus, so you need to tune up three credit reports. Many people starting a credit repair effort are intimidated when they see their reports. The formats are unique and the information reported by each bureau is different. Don’t worry; you don’t have to work on all three reports at the same time. There is no economy of scale. Start with one report, do what needs to be done, and then move on to the next one. Slow and steady wins the race.
High Credit Limits
Begin your credit repair tune up with something easy. I suggest you get a highlighter and mark the high credit limits on your accounts, both installment and revolving. If you find an account with an underreported limit it is costing you points on your scores, possibly significant points. It is easy to correct a limit error, just dispute it with the offending credit bureau and attach a copy of a recent statement showing the correct limit. Your credit repair tune up is off to a good start.
Account Opening Dates
The age of each account has an impact on your credit scores. Credit repair rule number one: an old account is a good account. Highlight your account opening dates. If you find one that underreports an opening date you should contact the creditor and inform them of the error and ask them to report it correctly. You should also ask them for a letter indicating the account opening date and then submit it to the bureaus yourself. You will be surprised with the results…
Credit Repair and Collection Accounts
The sale of debt is so common in the collection industry that you may find a single collectable account reported many times on your credit report. Collectors that no longer own a debt are not allowed to report it to the credit bureaus. And yet there is no incentive for collectors to cease reporting when they sell the debt to another collector. If you see the same account being collected by more than one collector, dispute all but the most recent. They will be removed. Your credit repair tune up is really getting into gear.
Negotiating Uncollectable Collections
Collections may be collected through the courts for a limited amount of time determined by state law. These time limits are called statutes of limitation (SOL) and are usually surprisingly short. If a debt cannot be collected through the courts it cannot be enforced. Please note that the SOL is not the same as the reporting period limit for your credit report. So, you may want to negotiate these “uncollectable” collections as part of your credit repair effort. The collector will love to hear from you, and you might even get them to remove the account from your credit in exchange for payment instead of just reporting it as paid. Give it a try!
Paying Down Your Balances
If you have the ability to pay down revolving balances, go ahead and do it. The FICO scoring model puts a lot of emphasis on the ratio between your balance and your high credit limit - and the lower the better. Are you looking for quick credit repair results? Pay your balances down below 20% of the high credit limit. If your balances have been lingering near the limit wait until you see what lower balances can do for your scores!
Trimming Down Accounts
You need to have open accounts in good standing to have a good credit score. But you can also have too many accounts. Successful credit repair involves achieving the right balance of accounts, so go ahead and close a few. But it is important to pick the right ones to close. MasterCard and Visa cards are the most valuable for your credit scores. Store cards have little value and should be the first to go. When you pick the accounts to close, please remember that old accounts are good accounts.
Credit Repair and New Accounts
If you do not have any open MasterCard of Visa accounts it’s time to open a couple. Two is a good number! If your credit scores are too low to get approved for regular unsecured credit cards, get two secured cards. Secured credit cards are the perfect credit repair tool. It’s easy and you won’t get denied. Remember, no credit, no credit scores. Your scores are a measure of your ability to pay and manage your debt. Get some credit cards and prove that you are a good risk. You scores will thank you!
Copyright © 2007 James W. Kemish. All Content. All Rights Reserved.
Friday, June 20, 2008
Credit Repair Adventures: A True Story
The Journey Begins
Bob and Sue are real people. They are smart and resourceful, but several years ago they made some bad choices. Soon their credit was a mess. So they started their credit repair journey. Here are a few of their credit repair adventures that might shine some light on your own path. Good luck!
Cease Communication Letters Cut Two Ways
Bob and Sue were reading about credit repair and the Fair Debt Collection Practices Act on the internet. They came across information about Cease Communication Letters which would force a collector to stop calling. So one day, after getting a call from an aggressive collector, Sue suggested they send a Cease Communication Letter. They sat down at the keyboard and gleefully wrote a note to the collector demanding that he cease communication. Bob even added some impressive language to convey his knowledge of the law. They went to the Post Office, mailed the letter, and went out to celebrate their credit repair victory. And then it all went bad.
The Cease Communication Backlash
Bob and Sue thought they magically made the collector vanish. Unfortunately, the collection was about to return with a vengeance. One evening there was a knock on the door. When Bob answered a man handed him an envelope. Bob had been served. The collector who received the Cease Communication Letter had returned the collection to the original creditor. The collection was well within the statute of limitation for collecting through the courts, and the creditor decided to sue. It was their right. Bob and Sue learned the hard way about sending Cease Communication Letters before the expiration of the Stature of Limitation. Credit repair decisions require care.
Falling for a Collection Trick
One day Bob and Sue got a friendly letter from a collection agency. It was an offer to settle an old debt for half price. Even better, Bob and Sue could make three affordable installment payments. They were determined to make their credit repair program succeed, so they called the collector and started the payment plan. It was only later that they realized the mistake. First of all, the collection was many years past the statute of limitation for collection through the courts. Worse yet, in spite of the fact that this account was showing on their credit report, the original default had occurred more than seven years ago…
Credit Repair and Timing
So what did this all mean? It meant that they did not have to pay a penny. The fact that the collection was beyond the statute of limitation for collecting through the courts meant that the collector had no way to enforce the collection. And the fact that the original default date was over seven years old meant that Bob and Sue could have disputed the presence of the account on their credit report with the credit bureaus and it would have been deleted. Credit repair is all about the timing.
Statute of Limitation Knowledge Pays Off
Sometime later, after Bob and Sue had become aware of their credit repair rights, another collection letter arrived. They were not about to be fooled again. First, Bob checked the statute of limitation and found that the original default happened about ten years previously. He had also learned about his right to validate a debt within thirty days of getting a collection letter. So he sent a letter demanding that the collector furnish proof of their legal right to collect the debt along with a true accounting of the amount claimed. Because he knew that the documentation must be objective he also insisted that the account come from the original creditor. The collector was never heard from again. The collection was never reported on Bob’s credit. Credit repair success is sweet.
Credit Repair and New Accounts
Bob and Sue’s credit repair effort was well underway. Their credit reports were really shaping up. Many derogatory accounts had been deleted. They were happy, at least until their trip to the car dealer. The finance manager ran their credit and informed them that their credit scores were too low. The reports were not bad, but the scores were dismal. After doing a little homework Bob and Sue found out about the importance of building new credit. It is not enough to clean up derogatory information. The FICO credit scoring model needs open and active credit. So they each opened two new secured credit cards. They made their payments on time and kept the balances under 20% of the high credit limit. Within a few months their scores were dramatically higher. Soon they were behind the wheel of their new car.
Budget Some Credit Repair Insurance
Bob and Sue were thrilled; their credit repair effort was successful, but they worried about a setback. They wanted to be ready for anything. So they sat down one Sunday morning and worked up a budget. When they were done they had found a way to set aside ten percent of their monthly income for a savings account. Initially they thought of it as credit repair insurance. Over time they realized it was the best thing they could have done. Their savings insured that they could maintain their perfect credit. But better yet, it gave them real inner peace and satisfaction, a new and fantastic experience.
Copyright © 2007 James W. Kemish. All Content. All Rights Reserved.
Bob and Sue are real people. They are smart and resourceful, but several years ago they made some bad choices. Soon their credit was a mess. So they started their credit repair journey. Here are a few of their credit repair adventures that might shine some light on your own path. Good luck!
Cease Communication Letters Cut Two Ways
Bob and Sue were reading about credit repair and the Fair Debt Collection Practices Act on the internet. They came across information about Cease Communication Letters which would force a collector to stop calling. So one day, after getting a call from an aggressive collector, Sue suggested they send a Cease Communication Letter. They sat down at the keyboard and gleefully wrote a note to the collector demanding that he cease communication. Bob even added some impressive language to convey his knowledge of the law. They went to the Post Office, mailed the letter, and went out to celebrate their credit repair victory. And then it all went bad.
The Cease Communication Backlash
Bob and Sue thought they magically made the collector vanish. Unfortunately, the collection was about to return with a vengeance. One evening there was a knock on the door. When Bob answered a man handed him an envelope. Bob had been served. The collector who received the Cease Communication Letter had returned the collection to the original creditor. The collection was well within the statute of limitation for collecting through the courts, and the creditor decided to sue. It was their right. Bob and Sue learned the hard way about sending Cease Communication Letters before the expiration of the Stature of Limitation. Credit repair decisions require care.
Falling for a Collection Trick
One day Bob and Sue got a friendly letter from a collection agency. It was an offer to settle an old debt for half price. Even better, Bob and Sue could make three affordable installment payments. They were determined to make their credit repair program succeed, so they called the collector and started the payment plan. It was only later that they realized the mistake. First of all, the collection was many years past the statute of limitation for collection through the courts. Worse yet, in spite of the fact that this account was showing on their credit report, the original default had occurred more than seven years ago…
Credit Repair and Timing
So what did this all mean? It meant that they did not have to pay a penny. The fact that the collection was beyond the statute of limitation for collecting through the courts meant that the collector had no way to enforce the collection. And the fact that the original default date was over seven years old meant that Bob and Sue could have disputed the presence of the account on their credit report with the credit bureaus and it would have been deleted. Credit repair is all about the timing.
Statute of Limitation Knowledge Pays Off
Sometime later, after Bob and Sue had become aware of their credit repair rights, another collection letter arrived. They were not about to be fooled again. First, Bob checked the statute of limitation and found that the original default happened about ten years previously. He had also learned about his right to validate a debt within thirty days of getting a collection letter. So he sent a letter demanding that the collector furnish proof of their legal right to collect the debt along with a true accounting of the amount claimed. Because he knew that the documentation must be objective he also insisted that the account come from the original creditor. The collector was never heard from again. The collection was never reported on Bob’s credit. Credit repair success is sweet.
Credit Repair and New Accounts
Bob and Sue’s credit repair effort was well underway. Their credit reports were really shaping up. Many derogatory accounts had been deleted. They were happy, at least until their trip to the car dealer. The finance manager ran their credit and informed them that their credit scores were too low. The reports were not bad, but the scores were dismal. After doing a little homework Bob and Sue found out about the importance of building new credit. It is not enough to clean up derogatory information. The FICO credit scoring model needs open and active credit. So they each opened two new secured credit cards. They made their payments on time and kept the balances under 20% of the high credit limit. Within a few months their scores were dramatically higher. Soon they were behind the wheel of their new car.
Budget Some Credit Repair Insurance
Bob and Sue were thrilled; their credit repair effort was successful, but they worried about a setback. They wanted to be ready for anything. So they sat down one Sunday morning and worked up a budget. When they were done they had found a way to set aside ten percent of their monthly income for a savings account. Initially they thought of it as credit repair insurance. Over time they realized it was the best thing they could have done. Their savings insured that they could maintain their perfect credit. But better yet, it gave them real inner peace and satisfaction, a new and fantastic experience.
Copyright © 2007 James W. Kemish. All Content. All Rights Reserved.
Tuesday, June 17, 2008
How to Win the Credit Repair Game
Right Where You Belong!
The credit bureaus are not the enemy. And the folks that created the FICO credit score model are not out to get you. In fact, if you take time to learn the rules you will find out how fun the game can be. Here are a few moves that will boost your credit scores and put you right where you belong, in control.
Your Credit Repair Lifeline
No matter how bad your credit might be there is a quick way to get your credit scores moving in the right direction. The FICO scoring model places considerable weight on your ability to manage your debt; and credit cards offer the perfect way to demonstrate your responsibility and influence your credit scores quickly.
Get Back in the Action Right Now
If the events of life have left you without credit cards, now is the time to get back in the action. It does not matter what your credit report looks like. Forget the past. Credit repair is about the present. Forget your fear of denial. You can do this now. Secured credit cards are the perfect credit repair option.
Secured Cards Done Right
Open two new secured credit cards today. Secured cards require a small savings deposit that will secure a modest line of credit. Once you have your cards it is time to work the system. It’s credit repair magic. Just maintain your balances under 20% of your credit limit. Don’t pay them off, and don’t let them go above 20% of the limit. Do it right and watch your scores improve.
Pay Down Your Balances
If you have plenty of credit, secured cards are not for you. But here are some facts that should aid your credit repair efforts. The FICO credit-scoring model is very sensitive to the relationship between your current balance and your high credit limit. FICO acknowledges six different balance-to-limit ratios: 20%, 40%, 60%, 80%, 100%, and over 100%. The first two are positive, 60% is neutral, and 80% and 100% are increasingly bad. To go over the limit is credit repair suicide.
Up Your Limits
Pay down your credit card balances and your scores will improve on the next reporting cycle. The affect can be dramatic. But there is another way. While you work on paying your balances down you should try this easy credit repair strategy. Call the credit card issuers and ask them to increase your limit. The affect on your credit score will be the same as if you paid your balance down. Can’t hurt to ask!
Give Uncle Bob a Call
Additional card member accounts still work! For those unfamiliar with the concept, here is an overview. Let’s say old uncle Bob has fantastic credit. If he is willing to make you an additional card member on one of his well-managed credit cards you will miraculously inherit the credit history of the card as if it were yours. It’s a real credit repair boost. So if you are on good terms with uncle Bob, give him a call.
A Caution About Additional Card Member Accounts
There is a downside to the additional card member strategy. Fair Isaac and Company, the creators of the FICO scoring model, are well aware of the loophole and have already blocked the benefit in the latest release of the software. The credit bureaus always take time to adopt a new release; you just might have another year to use this credit repair trick. If you take this route, you should also open two new secured cards and start building real credit of your own.
Pay off an Old Judgment
Here is an interesting credit repair trick. Unpaid judgments can report for seven years or the state statute of limitation, which ever is longer. Statutes of limitation on judgments are usually longer than seven years, and they can be re-filed in most states. Paid judgments are a different story altogether. Paid judgments are removed by the credit bureaus seven years from the original filing date. So if you have a judgment that is seven years old, payment will cause it to be removed from your credit report.
Negotiate That Collection Away
If you have a collection account on your credit report chances are that there is a collector that would love to hear from you. Collectors play hard, but they also know that something is better than nothing. And if you hang up without making a deal, they get nothing. You can always try to negotiate with a collector, but there is one circumstance where you are virtually guaranteed to succeed…
Credit Repair and the Statute of Limitation
Collections can only be enforced through the courts for a limited time. Once the statute of limitation expires a collector may talk big, but they have no way to force payment. They can’t get a judgment, and if you send them a cease communication letter they can’t call you again. The collection, on the other hand will linger on your credit report until the seven years are up. Are you past the statute of limitation? Want to get rid of the collection for ten to twenty-five cents on the dollar? Call your collector, and make them an offer. Your credit repair efforts will pay off.
Copyright © 2007 James W. Kemish. All Content. All Rights Reserved.
The credit bureaus are not the enemy. And the folks that created the FICO credit score model are not out to get you. In fact, if you take time to learn the rules you will find out how fun the game can be. Here are a few moves that will boost your credit scores and put you right where you belong, in control.
Your Credit Repair Lifeline
No matter how bad your credit might be there is a quick way to get your credit scores moving in the right direction. The FICO scoring model places considerable weight on your ability to manage your debt; and credit cards offer the perfect way to demonstrate your responsibility and influence your credit scores quickly.
Get Back in the Action Right Now
If the events of life have left you without credit cards, now is the time to get back in the action. It does not matter what your credit report looks like. Forget the past. Credit repair is about the present. Forget your fear of denial. You can do this now. Secured credit cards are the perfect credit repair option.
Secured Cards Done Right
Open two new secured credit cards today. Secured cards require a small savings deposit that will secure a modest line of credit. Once you have your cards it is time to work the system. It’s credit repair magic. Just maintain your balances under 20% of your credit limit. Don’t pay them off, and don’t let them go above 20% of the limit. Do it right and watch your scores improve.
Pay Down Your Balances
If you have plenty of credit, secured cards are not for you. But here are some facts that should aid your credit repair efforts. The FICO credit-scoring model is very sensitive to the relationship between your current balance and your high credit limit. FICO acknowledges six different balance-to-limit ratios: 20%, 40%, 60%, 80%, 100%, and over 100%. The first two are positive, 60% is neutral, and 80% and 100% are increasingly bad. To go over the limit is credit repair suicide.
Up Your Limits
Pay down your credit card balances and your scores will improve on the next reporting cycle. The affect can be dramatic. But there is another way. While you work on paying your balances down you should try this easy credit repair strategy. Call the credit card issuers and ask them to increase your limit. The affect on your credit score will be the same as if you paid your balance down. Can’t hurt to ask!
Give Uncle Bob a Call
Additional card member accounts still work! For those unfamiliar with the concept, here is an overview. Let’s say old uncle Bob has fantastic credit. If he is willing to make you an additional card member on one of his well-managed credit cards you will miraculously inherit the credit history of the card as if it were yours. It’s a real credit repair boost. So if you are on good terms with uncle Bob, give him a call.
A Caution About Additional Card Member Accounts
There is a downside to the additional card member strategy. Fair Isaac and Company, the creators of the FICO scoring model, are well aware of the loophole and have already blocked the benefit in the latest release of the software. The credit bureaus always take time to adopt a new release; you just might have another year to use this credit repair trick. If you take this route, you should also open two new secured cards and start building real credit of your own.
Pay off an Old Judgment
Here is an interesting credit repair trick. Unpaid judgments can report for seven years or the state statute of limitation, which ever is longer. Statutes of limitation on judgments are usually longer than seven years, and they can be re-filed in most states. Paid judgments are a different story altogether. Paid judgments are removed by the credit bureaus seven years from the original filing date. So if you have a judgment that is seven years old, payment will cause it to be removed from your credit report.
Negotiate That Collection Away
If you have a collection account on your credit report chances are that there is a collector that would love to hear from you. Collectors play hard, but they also know that something is better than nothing. And if you hang up without making a deal, they get nothing. You can always try to negotiate with a collector, but there is one circumstance where you are virtually guaranteed to succeed…
Credit Repair and the Statute of Limitation
Collections can only be enforced through the courts for a limited time. Once the statute of limitation expires a collector may talk big, but they have no way to force payment. They can’t get a judgment, and if you send them a cease communication letter they can’t call you again. The collection, on the other hand will linger on your credit report until the seven years are up. Are you past the statute of limitation? Want to get rid of the collection for ten to twenty-five cents on the dollar? Call your collector, and make them an offer. Your credit repair efforts will pay off.
Copyright © 2007 James W. Kemish. All Content. All Rights Reserved.
Wednesday, June 11, 2008
A Step-by-Step Guide to Credit Repair
The Need for Credit Repair
In 2003 congress passed an important amendment to the Fair Credit Reporting Act. The amendment, known as FACTA, required Equifax, Experian, and TransUnion to provide consumers with a free credit report, upon request, once every 12 months. This was meant to encourage consumers to examine their credit reports for errors. FACTA put a significant burden on the credit bureaus, and for good reason; 50% of all credit reports contain errors severe enough to cause consumers to pay premium interest rates on loans or even to be denied outright. This is a serious problem.
Getting Your Credit Reports
The website set up for the purpose of dispensing free credit reports to consumers is annualcreditreport.com, and is actually a hub that requires you to maneuver through three different sites. At each step you will face security questions which can bring your efforts to a standstill. It’s not easy, but it’s free! If you don’t have the patience I suggest you visit any of the bureau websites and purchase a tri-merged report. It will include all the information you need and should cost about fifteen dollars; easy as pie. Just make sure you don’t accidently signup for monthly monitoring or any of the many add-on services they peddle - unless you want to!
Should You Get Your Credit Scores?
In the long run credit repair is about credit scores. If you know your scores at the outset of your credit repair effort you will have a benchmark to monitor your progress. And so goes the logic, but it is easier said than done. The credit scores sold by the credit bureaus are not the same scores used by lenders when underwriting loan requests. Lenders use a score model known as FICO (an acronym for Fair Isaac & Company, the developer of the score). The credit bureaus sell FICO scores to lenders, but not to consumers. The scores sold on the bureau websites are “estimated scores” and can differ by up to 100 points from your FICO scores. Ouch. If you want to monitor your FICO scores you can purchase them at myfico.com. It will cost you about $50 for all three. You can decide if it’s worth it.
Organizing Your Credit Repair Effort is No Joke
If you are going to manage your own credit repair effort you want to get organized, really organized. Each credit bureau maintains unique information about you. The errors you find on one bureau may not be on the other two. In addition, the same account will often report with a different name and account number on each bureau. If you want to maximize the probability of success you must address each error individually with the offending bureau. I suggest you get three file folders to organize your efforts and plan on treating each credit bureau dispute effort as a separate project.
A Complete Examination
Once you are organized it’s time to get to work. Remember to deal with each bureau individually. If you got your credit reports for free you already have three separate reports. If you purchased a tri-merged report at one of the bureau sites you need to make copies so you have one for each of your three file folders. Start at the top of the first report and don’t skip a line even if you don’t spot an obvious problem. Truly effective credit repair is not just about finding the obvious derogatory issues (although they count too). There are lots of tricky little things to look for. Every point on your credit score matters. Let’s put in the effort!
The Credit Repair Hunt is On
Think of your credit repair effort as a treasure hunt. I bet you can find some credit repair gold, if you look carefully. Here are some of the little items that can add up to serious points on your credit score: underreported high credit limits on your revolving accounts, misreported start dates, balances on closed accounts, and duplicate accounts. Want more? If you have authorized user accounts with derogatory information or excessive balances they are hurting your score; make a call and get removed from the account. Oh, and a note on collections. If a collector no longer owns the debt they are not allowed to report the collection. Collectors sell accounts frequently, but the system does not provide any incentive for them to cease reporting. It’s up to you.
Consider a Credit Repair Professional
Your credit score will determine the cost of your mortgage, your auto loan, your credit cards, and more. Your credit score can even affect your employment and the cost of your property insurance. If you don’t have the time to take care of your own credit repair efforts, hire a pro! A credit repair professional will make sure that everything possible is done to clean up your reports and optimize your credit scores. Time is money, and if you already have a full schedule, don’t put off the task. Find a reputable credit repair service and put them to work for you!
Copyright © 2007 James W. Kemish. All Content. All Rights Reserved.
In 2003 congress passed an important amendment to the Fair Credit Reporting Act. The amendment, known as FACTA, required Equifax, Experian, and TransUnion to provide consumers with a free credit report, upon request, once every 12 months. This was meant to encourage consumers to examine their credit reports for errors. FACTA put a significant burden on the credit bureaus, and for good reason; 50% of all credit reports contain errors severe enough to cause consumers to pay premium interest rates on loans or even to be denied outright. This is a serious problem.
Getting Your Credit Reports
The website set up for the purpose of dispensing free credit reports to consumers is annualcreditreport.com, and is actually a hub that requires you to maneuver through three different sites. At each step you will face security questions which can bring your efforts to a standstill. It’s not easy, but it’s free! If you don’t have the patience I suggest you visit any of the bureau websites and purchase a tri-merged report. It will include all the information you need and should cost about fifteen dollars; easy as pie. Just make sure you don’t accidently signup for monthly monitoring or any of the many add-on services they peddle - unless you want to!
Should You Get Your Credit Scores?
In the long run credit repair is about credit scores. If you know your scores at the outset of your credit repair effort you will have a benchmark to monitor your progress. And so goes the logic, but it is easier said than done. The credit scores sold by the credit bureaus are not the same scores used by lenders when underwriting loan requests. Lenders use a score model known as FICO (an acronym for Fair Isaac & Company, the developer of the score). The credit bureaus sell FICO scores to lenders, but not to consumers. The scores sold on the bureau websites are “estimated scores” and can differ by up to 100 points from your FICO scores. Ouch. If you want to monitor your FICO scores you can purchase them at myfico.com. It will cost you about $50 for all three. You can decide if it’s worth it.
Organizing Your Credit Repair Effort is No Joke
If you are going to manage your own credit repair effort you want to get organized, really organized. Each credit bureau maintains unique information about you. The errors you find on one bureau may not be on the other two. In addition, the same account will often report with a different name and account number on each bureau. If you want to maximize the probability of success you must address each error individually with the offending bureau. I suggest you get three file folders to organize your efforts and plan on treating each credit bureau dispute effort as a separate project.
A Complete Examination
Once you are organized it’s time to get to work. Remember to deal with each bureau individually. If you got your credit reports for free you already have three separate reports. If you purchased a tri-merged report at one of the bureau sites you need to make copies so you have one for each of your three file folders. Start at the top of the first report and don’t skip a line even if you don’t spot an obvious problem. Truly effective credit repair is not just about finding the obvious derogatory issues (although they count too). There are lots of tricky little things to look for. Every point on your credit score matters. Let’s put in the effort!
The Credit Repair Hunt is On
Think of your credit repair effort as a treasure hunt. I bet you can find some credit repair gold, if you look carefully. Here are some of the little items that can add up to serious points on your credit score: underreported high credit limits on your revolving accounts, misreported start dates, balances on closed accounts, and duplicate accounts. Want more? If you have authorized user accounts with derogatory information or excessive balances they are hurting your score; make a call and get removed from the account. Oh, and a note on collections. If a collector no longer owns the debt they are not allowed to report the collection. Collectors sell accounts frequently, but the system does not provide any incentive for them to cease reporting. It’s up to you.
Consider a Credit Repair Professional
Your credit score will determine the cost of your mortgage, your auto loan, your credit cards, and more. Your credit score can even affect your employment and the cost of your property insurance. If you don’t have the time to take care of your own credit repair efforts, hire a pro! A credit repair professional will make sure that everything possible is done to clean up your reports and optimize your credit scores. Time is money, and if you already have a full schedule, don’t put off the task. Find a reputable credit repair service and put them to work for you!
Copyright © 2007 James W. Kemish. All Content. All Rights Reserved.
Monday, June 9, 2008
Credit Repair and the Collection Puzzle
You can Take Control!
Collectors use both law and psychology in the practice of their craft. Many collectors operate legitimately, while others cross the line daily. Do you know your rights? A nationally recognized credit repair expert explains the correct way to deal with a collector - and maybe even come out ahead.
Getting the Collection Letter
Many people in credit repair programs have received collection letters. Sometimes the credit repair effort itself can attract a collector, but you can turn the situation to your advantage. Collection letters are designed to intimidate, and include enough threatening legal language to upset anyone. Many recipients of collection letters opt to ignore them. This is a mistake. You have an important right when contacted by a collector, but it only lasts for 30 days.
Debt Validation as a Credit Repair Tool
The Fair Debt Collection Practices Act (FDCPA) is the body of law that governs the collection industry. Under the FDCPA, if you receive a collection letter you have a powerful legal right called debt validation, an excellent weapon in the credit repair process. Upon your request, a collector must provide proof of their right to collect, as well as an accounting of the amount claimed. Further, an internal memorandum reiterating the information provided in the collection letter does not satisfy the obligation. Documentation must be solid and objective. If the collector cannot provide the requested proof, they must cease all collection efforts. But you must request this documentation within 30 days.
Collector Do’s and Don’ts
Under the FDCPA collectors face a long list of prohibited behaviors. Many of these rules are ignored, bent, and often broken. Here is a sampling of behaviors which collectors are prohibited from engaging in:
Cease Communication Letter
You have the right under the FDCPA to demand that a collector cease all communication with you. But like many credit repair tools this must be used with caution. If you choose this course of action, just put your demand in writing. A cease communication letter will not prevent collectors from filing suit against you, but it will stop telephone calls and collection letters. Be aware that 5% of all complaints received by the FTC about FDCPA violations in 2007 related to collectors ignoring cease communication letters. If the calls keep coming you should send the letter again, only this time send it certified and copy the FTC.
Problems Before Statute of Limitation Expiration
Credit repair requires knowledge; you must understand the possible consequences of your actions. If you send a cease communication letter to a collector prior to the expiration of the statute of limitation (SOL) you may push them to file suit. The SOL for debt is state specific and debt-type specific. You can find the information on the web. But be careful. A collector may apply the SOL from the state where the contract originated or your current state of residence, so check both. On the other hand filing suit can be expensive and is not always the best move for a collector. Many collectors return the debt to the original creditor upon receipt of a cease communication letter. This may mean that another collector will be in touch soon and your credit repair efforts may need to be renewed.
Getting to Know Your Statute of Limitation
If you get a collection letter you should check your SOL. The SOL clock starts with the date of original default on the original debt. Collectors are notorious for “accidentally” resetting the clock. Many people starting a credit repair program discover how frequent this practice is when they examine their credit reports. The date of original default is the first time you were late in the sequence that led to the charge-off or collection status. Also note that the SOL for collection has nothing to do with the reporting limit on your credit report. The SOL for debt is usually far less than the normal seven-year limit for credit reporting.
Credit Repair Solutions After SOL Expiration
If the SOL on the debt has expired you are home free. Here is a bit of credit repair magic. A collector can attempt to collect beyond the SOL, but since they can’t get a judgment they have no way to enforce their efforts. A cease communication letter will put and end to their presence in your life. You have other options as well. Remember that the SOL is different from the reporting period limit on your credit report. The collector may have no way to enforce a collection, but it can continue to show on your credit report. If you would like to negotiate the debt, now is the time. Any money a collector gets past the SOL is a gift, so start your offer as low as you wish. You may even be able to negotiate for complete removal from your report, a perfect credit repair outcome.
Copyright © 2007 James W. Kemish. All Content. All Rights Reserved.
Collectors use both law and psychology in the practice of their craft. Many collectors operate legitimately, while others cross the line daily. Do you know your rights? A nationally recognized credit repair expert explains the correct way to deal with a collector - and maybe even come out ahead.
Getting the Collection Letter
Many people in credit repair programs have received collection letters. Sometimes the credit repair effort itself can attract a collector, but you can turn the situation to your advantage. Collection letters are designed to intimidate, and include enough threatening legal language to upset anyone. Many recipients of collection letters opt to ignore them. This is a mistake. You have an important right when contacted by a collector, but it only lasts for 30 days.
Debt Validation as a Credit Repair Tool
The Fair Debt Collection Practices Act (FDCPA) is the body of law that governs the collection industry. Under the FDCPA, if you receive a collection letter you have a powerful legal right called debt validation, an excellent weapon in the credit repair process. Upon your request, a collector must provide proof of their right to collect, as well as an accounting of the amount claimed. Further, an internal memorandum reiterating the information provided in the collection letter does not satisfy the obligation. Documentation must be solid and objective. If the collector cannot provide the requested proof, they must cease all collection efforts. But you must request this documentation within 30 days.
Collector Do’s and Don’ts
Under the FDCPA collectors face a long list of prohibited behaviors. Many of these rules are ignored, bent, and often broken. Here is a sampling of behaviors which collectors are prohibited from engaging in:
- Contacting consumers by telephone before 8:00 AM or after 9:00 PM
- Calling the same consumer in a repetitious manner
- Threatening to make embarrassing contacts with an employer or other person
- Contacting a consumer at his place of employment after the consumer has advised the bill collector not to do so
- Inquiring about personal property, and implying that these items may be confiscated to satisfy the debt
Cease Communication Letter
You have the right under the FDCPA to demand that a collector cease all communication with you. But like many credit repair tools this must be used with caution. If you choose this course of action, just put your demand in writing. A cease communication letter will not prevent collectors from filing suit against you, but it will stop telephone calls and collection letters. Be aware that 5% of all complaints received by the FTC about FDCPA violations in 2007 related to collectors ignoring cease communication letters. If the calls keep coming you should send the letter again, only this time send it certified and copy the FTC.
Problems Before Statute of Limitation Expiration
Credit repair requires knowledge; you must understand the possible consequences of your actions. If you send a cease communication letter to a collector prior to the expiration of the statute of limitation (SOL) you may push them to file suit. The SOL for debt is state specific and debt-type specific. You can find the information on the web. But be careful. A collector may apply the SOL from the state where the contract originated or your current state of residence, so check both. On the other hand filing suit can be expensive and is not always the best move for a collector. Many collectors return the debt to the original creditor upon receipt of a cease communication letter. This may mean that another collector will be in touch soon and your credit repair efforts may need to be renewed.
Getting to Know Your Statute of Limitation
If you get a collection letter you should check your SOL. The SOL clock starts with the date of original default on the original debt. Collectors are notorious for “accidentally” resetting the clock. Many people starting a credit repair program discover how frequent this practice is when they examine their credit reports. The date of original default is the first time you were late in the sequence that led to the charge-off or collection status. Also note that the SOL for collection has nothing to do with the reporting limit on your credit report. The SOL for debt is usually far less than the normal seven-year limit for credit reporting.
Credit Repair Solutions After SOL Expiration
If the SOL on the debt has expired you are home free. Here is a bit of credit repair magic. A collector can attempt to collect beyond the SOL, but since they can’t get a judgment they have no way to enforce their efforts. A cease communication letter will put and end to their presence in your life. You have other options as well. Remember that the SOL is different from the reporting period limit on your credit report. The collector may have no way to enforce a collection, but it can continue to show on your credit report. If you would like to negotiate the debt, now is the time. Any money a collector gets past the SOL is a gift, so start your offer as low as you wish. You may even be able to negotiate for complete removal from your report, a perfect credit repair outcome.
Copyright © 2007 James W. Kemish. All Content. All Rights Reserved.
Monday, June 2, 2008
Credit Repair and the Hidden Power of Credit Cards
Credit cards Hold the Key
There is nothing like the subject of credit cards to get people excited. Credit cards can be a great convenience, or a weapon of financial destruction. But there is more power in that plastic than you think. Credit cards also hold the key to higher credit scores and speedy credit repair success, if you know the secret.
The Growing Importance of Your Credit Score
Credit repair revolves around credit score improvement, and for good cause. You are probably aware that a low credit score can keep you from getting the credit you want. But did you know that lenders set interest rates based on credit scores? Late in 2007, Fannie Mae and Freddy Mac, the federally charted mortgage giants, modified their pricing to be more sensitive to credit scores than ever before. Even borrowers with excellent credit will now have their rate adjusted based on incremental score differences.
Every Point Counts
Mortgage lenders are not alone in their recent pricing policy changes. Auto finance companies, long known for tiered pricing, have also sharpened their pencils and are more score sensitive than ever. If you are applying for a loan you should be aware that every point on your credit score could affect your interest rate. Fortunately there is a way to control your credit scores and hasten your credit repair goals.
Credit Cards the Credit Repair Powerhouse
Effective credit repair is all encompassing. But there is a special category of debt that offers more control over your scores than you ever imagined - if you know what to do. Credit cards have a special place in the FICO scoring model, and therefore in your credit repair effort as well. Fair Isaac and Company, the creator of the FICO scoring model, interprets the way you use your credit card as a primary indicator of the risk a lender will assume when lending you money. And there is reasonable logic involved.
Credit Cards as a Barometer of Risk
Fair Isaac and Company is in the business of measuring the risk of lending money. Their method is to assign numeric value to every behavior they can identify within your credit file. These values are measured by a complex algorithm, or formula, which they license to the credit bureaus. The credit bureaus apply this formula to the information they collect about you and come up with a single number; your credit score.
Credit Card Behavior
Fair Isaac gives your credit cards special importance because your balances can change monthly and contain several indicators of potential risk. The indicators measured by Fair Isaac include your payment record, your balance relative to your high credit limit, and the age of the card. In addition, the importance of each indicator varies based on the value of the other categories. Let’s see why.
Credit Repair Rule Number One – On Time Payments
Many people involved in a credit repair effort open new credit cards to rebuild their credit. If managed correctly this can be a powerful score booster. But there is a dark side as well. If you miss a payment Fair Isaac will cut your score dramatically as a way of alerting lenders that you are a high risk. It’s simple. Your new credit card was seen by Fair Isaac as a test of your ability to manage new debt. And you failed. Credit repair rule number one, make your payments on time.
High Balances Equal Credit Repair Trouble
So, you got a new credit card, ran the balance up to the limit, and now you wonder why your credit repair efforts are not working. You can afford the payments, and you’re making them on time. What’s the problem? Unfortunately, all Fair Isaac can see is unproven debt and a person who may have no restraint. So you get categorized with a statistical majority who get in over their heads and soon default. As a result Fair Isaac will knock your credit score down to warn potential lenders to steer clear. Do you want to keep your scores up? Please keep your balances down.
The Age of Your Credit Cards
Once you have proven to Fair Isaac that you can manage the firepower in your wallet you will be rewarded with increased latitude. Your score will still suffer if you make a late payment, and you will be penalized if you let your balance approach the limit, but not as much. In addition, you will be rewarded with a higher score as Fair Isaac becomes more confident in your staying power. When it comes to credit repair, time is your friend.
Reaching Your Credit Repair Goals
Do you want to optimize your credit score? Make your payments on time and watch those balances. The latest release of the FICO score model recognizes five balance-to-limit ratios: 20%, 40%, 60%, 80%, and 100%. The first two tiers, 20% and 40%, will increase your scores, 60% is neutral, 80% is bad, and 100% is terrible. There is also a special deadly over 100% category, which you can expect to obliterate your score. If your credit cards are under one year old your behavior is especially important. If you exercise caution, your scores will soar, and you will reach your credit repair goals.
Copyright © 2007 James W. Kemish. All Content. All Rights Reserved.
There is nothing like the subject of credit cards to get people excited. Credit cards can be a great convenience, or a weapon of financial destruction. But there is more power in that plastic than you think. Credit cards also hold the key to higher credit scores and speedy credit repair success, if you know the secret.
The Growing Importance of Your Credit Score
Credit repair revolves around credit score improvement, and for good cause. You are probably aware that a low credit score can keep you from getting the credit you want. But did you know that lenders set interest rates based on credit scores? Late in 2007, Fannie Mae and Freddy Mac, the federally charted mortgage giants, modified their pricing to be more sensitive to credit scores than ever before. Even borrowers with excellent credit will now have their rate adjusted based on incremental score differences.
Every Point Counts
Mortgage lenders are not alone in their recent pricing policy changes. Auto finance companies, long known for tiered pricing, have also sharpened their pencils and are more score sensitive than ever. If you are applying for a loan you should be aware that every point on your credit score could affect your interest rate. Fortunately there is a way to control your credit scores and hasten your credit repair goals.
Credit Cards the Credit Repair Powerhouse
Effective credit repair is all encompassing. But there is a special category of debt that offers more control over your scores than you ever imagined - if you know what to do. Credit cards have a special place in the FICO scoring model, and therefore in your credit repair effort as well. Fair Isaac and Company, the creator of the FICO scoring model, interprets the way you use your credit card as a primary indicator of the risk a lender will assume when lending you money. And there is reasonable logic involved.
Credit Cards as a Barometer of Risk
Fair Isaac and Company is in the business of measuring the risk of lending money. Their method is to assign numeric value to every behavior they can identify within your credit file. These values are measured by a complex algorithm, or formula, which they license to the credit bureaus. The credit bureaus apply this formula to the information they collect about you and come up with a single number; your credit score.
Credit Card Behavior
Fair Isaac gives your credit cards special importance because your balances can change monthly and contain several indicators of potential risk. The indicators measured by Fair Isaac include your payment record, your balance relative to your high credit limit, and the age of the card. In addition, the importance of each indicator varies based on the value of the other categories. Let’s see why.
Credit Repair Rule Number One – On Time Payments
Many people involved in a credit repair effort open new credit cards to rebuild their credit. If managed correctly this can be a powerful score booster. But there is a dark side as well. If you miss a payment Fair Isaac will cut your score dramatically as a way of alerting lenders that you are a high risk. It’s simple. Your new credit card was seen by Fair Isaac as a test of your ability to manage new debt. And you failed. Credit repair rule number one, make your payments on time.
High Balances Equal Credit Repair Trouble
So, you got a new credit card, ran the balance up to the limit, and now you wonder why your credit repair efforts are not working. You can afford the payments, and you’re making them on time. What’s the problem? Unfortunately, all Fair Isaac can see is unproven debt and a person who may have no restraint. So you get categorized with a statistical majority who get in over their heads and soon default. As a result Fair Isaac will knock your credit score down to warn potential lenders to steer clear. Do you want to keep your scores up? Please keep your balances down.
The Age of Your Credit Cards
Once you have proven to Fair Isaac that you can manage the firepower in your wallet you will be rewarded with increased latitude. Your score will still suffer if you make a late payment, and you will be penalized if you let your balance approach the limit, but not as much. In addition, you will be rewarded with a higher score as Fair Isaac becomes more confident in your staying power. When it comes to credit repair, time is your friend.
Reaching Your Credit Repair Goals
Do you want to optimize your credit score? Make your payments on time and watch those balances. The latest release of the FICO score model recognizes five balance-to-limit ratios: 20%, 40%, 60%, 80%, and 100%. The first two tiers, 20% and 40%, will increase your scores, 60% is neutral, 80% is bad, and 100% is terrible. There is also a special deadly over 100% category, which you can expect to obliterate your score. If your credit cards are under one year old your behavior is especially important. If you exercise caution, your scores will soar, and you will reach your credit repair goals.
Copyright © 2007 James W. Kemish. All Content. All Rights Reserved.
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