Eliminate Collections with Credit Repair

Say Goodbye to Collectors

Credit repair is not hard. Take the time to learn your legal rights and you will see how easy it can be. Have you ever been bothered by a collector? Are there collections on your credit report? Let’s take a look at some powerful credit repair tools that can help you get collectors out of your life and off of your credit report. For real and forever.

Educate Yourself

The collection industry thrives on consumer ignorance. The less you know, the more money collectors make. A little credit repair education can save you thousands of dollars and free you from the fear of dealing with collectors. If you want to take control you need to know two things: 1) How statutes of limitation really work, and how you can use them to get collectors off of the phone and out of your life, and 2) How reporting period limits are so often violated, and what you can do to protect yourself and clean up your credit report. Let’s do some credit repair!

Credit Repair and Statutes of Limitation

Statutes of limitation (SOL) define the time limit legal action can be taken. In the case of a collection it defines the time limit that a collector can collect through the court system. Once the SOL has expired for a debt the collector cannot sue you or get a judgment. The SOL has nothing whatsoever to do with the reporting period limit for the derogatory information. And in most cases the SOL is significantly shorter than the reporting period limit. SOLs are state and debt type specific and can be easily located on the web. By the way, you need to check both the state in which you entered into the obligation and your current state of residence and apply the longer SOL. Let’s turn this info into credit repair gold.

Using Your Statute of Limitation

There are two credit repair advantages to be gained from understanding the SOL. If a collector contacts you about a debt after the SOL has expired you can tell them to stop bothering you with no fear of repercussion. Per the Fair Debt Collection Practices Act you can send a Cease Communication Letter and they are not allowed to contact you again. As a point of fact, you can send a Cease Communication Letter prior to the expiration of the SOL, but there is some risk that you would trigger a lawsuit, so do your homework before taking action. In addition, should you decide to negotiate the balance, you will be in the driver’s seat; once the collector understands you know your rights they should be grateful that you are offering them anything!

Credit Repair, Collections, and Your Credit Report

Let’s move on to the next phase of your credit repair assault against collections, understanding credit reporting limits. This is interesting and can pay quick dividends. Collectors regularly buy and sell debt; it’s the way the industry works. Most people are not aware that collectors are supposed to withdraw reporting as soon as they sell a debt. Unfortunately, they rarely do, and the darn collections linger for years dragging down your scores. Fortunately, a little credit repair will do the trick. If you dispute a collection that has been sold to another collector it will be removed.

The Credit Reporting Clock

But there is more to know about reporting period limits and collections. Many people are under the impression that derogatory information can stay on their credit report for seven years from the initial reporting date. This is not accurate and can needlessly depress your credit scores for many years. The reporting period clock starts on date of the original default with the original creditor. Collectors cannot reset the reporting period start date. Collectors have nothing to do with setting reporting periods. Don’t make the mistake of thinking a collection can report for seven years from the date the it showed up! Figure out the original default date, which was the first time you missed a scheduled payment in the sequence that led to the charge-off or collection status, and count forward seven years and 180 days. This is the date it should fall off.

Get Credit Repair Help

There is credit repair help available. If you don’t have the time or inclination to figure all of this out for yourself just hire a reputable credit repair professional. It’s your credit and it’s important. Take the time to do it right and you will get the results you desire. Good luck!

Copyright © 2008 James W. Kemish. All Content. All Rights Reserved.

Credit Repair and Achieving Financial Security

Credit Repair is About Financial Health

Credit repair, in the final analysis, is about your financial health. You may start a credit repair program with concerns about the accuracy of your credit report, but in the end the real benefit of healthy credit is money in your pocket. Credit repair translates into a lower cost of borrowing, and consequently more room in your budget for saving.

Accelerate the Process

Are you ready to leave your financial stress behind? You can do this. Regardless of the current condition of your credit, a proactive approach can transform your financial life, and sooner than you think. Don’t make the mistake of believing that you are destined to spend years in credit limbo waiting for time to heal the issues of the past. An intelligent approach to credit repair will accelerate the process dramatically.

Two Basic Credit Repair Steps

There are two basic steps involved in the credit repair process. Each is as important as the other and cannot be ignored. When it comes to credit repair this balanced approach is required. Done right the results are dramatic. Are you ready to change your life, clean up your credit reports, boost your credit scores and enjoy all of the benefits that come with great credit? Let’s get started.

Understanding the Errors

The first step in the credit repair process is a methodical clean up of your credit report. Does this sound too obvious? You will be surprised. Most people imagine that if they recognize an item on their credit report it is accurate. This is far from the case. If you really want credit repair success you have to get rid of your preconceptions. An enormous percentage of derogatory information on consumer’s credit reports is reported in error.

Spotting Compliance Issues

In many cases these errors are compliance issues. Compliance issues are, by definition, based on some real event, but should not be on your report as a matter of law. Examples include duplicate accounts, derogatory information reporting beyond the reporting period limit, and collections reported by collectors whom no longer own the debt (having sold it to another collector, or returned it to the original creditor). Credit repair is about the details. And every detail matters. If you are confused you should hire a reputable credit repair service to manage the cleanup process for you.

Credit Restoration Time

The second step in the credit repair process is the rebuilding of your credit. Here also there are important details many people miss. A misstep can mean the difference between success and failure. Your credit score is determined by both the positive and negative information on your credit report. It is not enough to eliminate the erroneous derogatory information on your report. If you don’t rebuild your credit your credit repair efforts will fail. But you must rebuild it in a certain way.

The Key to Your FICO Score

You may think that if you pay your bills on time you will have good credit scores. Sadly, this is not true at all. The FICO scoring model is not designed to grade you on past behavior. Many people are horrified after a lifetime of perfect payments to discover that their credit scores are awful. This can be shocker. The FICO scoring model is a predictive model designed to measure the risk of future default and puts weight on such factors as account balances, the age of accounts, and even the type of accounts you open. Your credit repair efforts will succeed or fail based on your ability to shape your credit according to this predictive model.

Revolving Debt as a Credit Repair Tool

I suggest that you focus initially on your revolving debt. Stay away from store cards and consumer debt, such as furniture store accounts. Build your credit with MasterCard, Visa, American Express, and Discover Cards. If you don’t have any credit and can’t get a regular credit card, get two secured cards as soon as possible, and keep your balances low. A single maxed our credit card can knock one hundred points from your credit score. For comprehensive advice on balancing your credit contact a credit repair professional.

It’s Up To You

Aside from these two essential steps in the credit repair process there may be other credit repair tools that can add significant value to your efforts. Many lenders offer rehabilitation programs that can bring your accounts current and even remove the derogatory history from your report. If you have active legitimate collections, knowledge of your state statute of limitation is essential and can put you in control. Used properly credit repair can transform your credit and change your financial outlook, but you have to take action. It’s up to you. Good luck!

Copyright © 2008 James W. Kemish. All Content. All Rights Reserved.

In Search of the True Credit Repair Professional

Now is the Time for Credit Repair

The quality of your credit has never been as important as it is today. Lenders have tightened their guidelines and interest rates are now determined by new Risk-Based Pricing models; the lower your credit score, the higher your rate, and every single point can make a difference. People everywhere are turning to credit repair professionals to help them clean up their credit reports and optimize their credit scores.

The Importance of Professional Help

There is a good reason that so many people are reaching out for credit repair help. There was a time when it was enough if you paid your bills on schedule. Those days are over. The advent of the complicated FICO credit scoring model has made a science of credit score optimization, while the complexity of the credit reporting system has made it more difficult than ever to identify and correct errors.

How to Find the True Credit Repair Pro

Credit repair is no longer a simple matter of spotting an error on your credit report and disputing it with the offending credit bureau. A working knowledge of the Fair Credit Reporting Act is a bare minimum requirement, while your credit score is dependent on many subtle factors, most of which have nothing to do with your ability to make your payments on time. It’s a new world and the right help can make all the difference. Here are the essential qualifications to look for in a credit repair professional.

Knowledge of the Laws

A credit repair professional has an intimate knowledge of the laws that govern all of the participants in the credit reporting system. The credit bureaus are bound by the Fair Credit Reporting Act, collectors are governed by the Fair Debt Collection Practices Act, and state statutes of limitation will contribute significantly to the negotiability of collections.

Familiarity with Lender Remedies

Truly effective credit repair often must look beyond the credit bureaus and include lender cures and rehabilitation opportunities. Many lenders offer attractive programs that can get you back on track and even eliminate bad marks from your credit report. The credit repair professional will be able to guide you through the process of approaching creditors about these opportunities as appropriate. This multi-dimensional approach will insure that you get the best possible results.

An Understanding of the FICO Scoring Model

There are many variables involved in the process of credit score optimization, and everything matters; payment history, account balances and usage, age of accounts, account types and even the mix of accounts. A credit repair professional has in-depth knowledge of the FICO scoring model and will provide you with everything you need to know to manage the content of your credit report, strike the proper balance, and get the most out of your credit score.

Help With Rebuilding Credit

It is not unusual, after a period of financial stress, to have little or no open credit. Your credit scores are based on both the positive and the negative information on your credit reports. Effective credit repair must address both parts of the equation simultaneously. To focus only on removing erroneous derogatory information from your credit report will leave half of your credit repair potential untapped. A credit repair professional will help you rebuild your credit and manage your new debt for the best possible credit score results.

Putting it All Together

The genuine credit repair professional will address all aspects of your credit to insure that you get the best possible results. Everything necessary will be done to clean up your credit reports, improve your credit scores, rebuild your credit, and make you as lender-ready as you can be. In selecting a credit repair service make sure that their program covers every base. And trust yourself. Pick up the phone and interview your prospective choices before signing up. Write down a list of questions and ask away. Your credit is too important not to take the time to make the right choice. Good luck!

Copyright © 2008 James W. Kemish. All Content. All Rights Reserved.

FICO Offers Credit Repair Tips

Credit Repair in the News

Credit repair is more important than ever. In a recent interview with MarketWatch, a Wall Street Journal website, the Consumer Operations manager for the MyFICO division of Fair Isaac spoke out about the importance of checking your credit reports. In the words of the article, “There may be some surprises waiting for you.”

A New Credit Repair Landscape

Creditors everywhere have tightened their guidelines. This new credit environment has made credit repair more important than ever before. And to make things even more difficult in these already challenging times, creditors have begun to reduce and close credit cards in order to limit their own risk exposure.

The Limit Reduction Problem

This action is doubly hard for consumers. First, these limit reductions are happening unexpectedly, even to those who have never made a late payment. And second, and even more damaging, is the snowball effect that follows. A major part of your credit score is based on the relationship between your current balance and your credit limit. When a creditor cuts your limit your balance-to-limit ratio increases and your credit score will fall, through no fault of your own.

The Snowball Effect

And the snowball starts rolling. Once the first creditor drops a limit and your scores fall, other creditors are likely to drop your limits as well. And the lower your scores the more prone you will be to this perfect storm of credit repair trouble. What to do?

Good Credit Repair Advice

The Consumer Operations Manager for MyFICO suggests that you do everything in your power to insure that your credit report is as clean as possible and your scores are optimized. And don’t make the mistake of thinking that paying your bills on time (as important as it is) is you need to do. Credit repair knowledge is power. Here is a summary of his credit repair tips, and our extrapolation.

Check Your Credit Reports

Look for changes in your account limits. And while you’re at it, check for errors. Errors come in many shapes. Derogatory information should cease reporting, generally, after seven years. You should know that the seven year reporting period clock starts on the date of the original default with the original creditor. The original default was the first reported late payment in the sequence that led to the charge off or collection status.

Collectors cannot reset the clock with subsequent reporting. And while we are on the subject of collectors, you should know that if a collector no longer owns the debt, he is supposed to remove the account entirely from your credit report. When in doubt, challenge the item with the credit bureaus or hire a credit repair professional to manage the process for you.

Don’t Get Close to Your Credit Card Limits

A significant percentage of your credit score is based on your balance-to-limit ratio. Reduce your balances as much as possible. Less than 20% of your limit is the optimal balance. Many people are blindsided by precipitous drops in the scores when they max out a card, even when they have never been late on a payment.

Keep Accounts Active

Use your cards to keep them alive. Dormant cards are in danger of being closed by creditors and unless you have plenty of open accounts this could cause a drop in your scores and send you in search of credit repair solutions.

Pay Your Bills on Time

This seems like a no-brainer, but it is so important. Make sure you understand the impact your purchases will have on your budget. Try not to let yourself get spread too thin. A single late payment can have a big effect on your scores, and may even trigger adverse action, such as limit reduction, by your creditors.

Don’t Apply for New Credit Cards

We have warned against store cards for years, and MyFICO agrees. Store cards can be credit repair suicide as they often present a triple threat. First, you will have an inquiry. Second, you will have a new account which will weigh down your credit scores for several months. And last, and worst, is the fact that most store cards offer a credit limit only marginally over the amount of your purchase. Put these together and you get credit repair trouble.

Call for Credit Repair Help

If you are confused by all of the components of credit report and score management, or don’t have the time to handle the task on your own, don’t give up. Call a credit repair professional for help. A credit repair professional will manage the process for you and insure that everything possible is done to optimize your credit. Good luck!

Copyright © 2008 James W. Kemish. All Content. All Rights Reserved.

Seven Quick Credit Repair Solutions

Credit Repair Hyper Drive

Credit repair can take time, or not. There are many situations where you can get amazing results very quickly. Your credit scores can have a profound impact on your life, and every point counts. Here are seven potent power-packed credit repair solutions you can put to use right away. Are you ready? Let’s go!

Get Your Revolving Balances Down

Fair Isaac Corp, the mastermind behind the credit scores used by virtually all lenders, has been tinkering with the formula they use to calculate your scores. The recent additional emphasis they have put on revolving balances has taken many people by surprise. Are you listening? A maxed out card can now cost you as much as 150 points. Ouch!

Well, there is some good credit repair news here too; pay your darn balances down and watch your score rocket upward. Want to know how far to pay your cards down? Under forty percent is good, under twenty percent is the best. If money is tight you might even consider borrowing from friends and family to make this happen. If you need your scores for a mortgage or car loan you may be living with that interest rate for many years to come.

Challenge Iffy Collections

Do you have collections? Are you ready for a little credit repair magic? Collectors are very different from creditors. Collectors buy and sell collection accounts. When a collector purchases an account they can report it to the credit bureaus. When they sell an account they are supposed to remove the collection from your credit entirely. Unfortunately, there is no incentive for them to cease reporting, so you need to challenge these items. If the collector no longer owns the account you will see it vanish from your credit report. It’s credit repair magic.

Negotiate for Deletion

There is a silver lining to the recession that we are currently struggling through. Collectors are as hungry as everyone else. If a collector contacts you for payment on a legitimate debt you may discover they are willing to negotiate. Your balance is not the only thing that you can negotiate. Collectors have the ability to withdraw the entire account from your credit report. It might be a relief to get an old debt paid off, but when it comes to credit repair it is better to have no collection account on your report than a paid collection.

Boost Your Credit Limits

The credit crunch has caused credit card issuers to tighten their guidelines. Little credit blemishes may now trigger over-the-top responses from credit card companies. American Express has been on a campaign to reduce credit limits on card holders for almost any reason. So this tactic may not work, but it’s worth a try as there are still a few friendly creditors out there. Call your credit card company and ask them to increase your limit. The result will be the same as if you had paid your balance down. For the cost of a phone call you might increase your scores, and maybe a lot!

Call Mom and Become an Authorized User

Another little twist that Fair Isaac Corp added to their latest version of their credit score formula is to block the benefit of purchased authorized user accounts. Until recently you could purchase authorized user status from gray-market brokers and watch your score jump right up. Fair Isaac caught on and put an end to this iffy credit repair practice. However, their filters are still allowing the full benefit for legitimate authorized users. So call Mom and have her add you to one of her perfect credit cards for a nice credit repair boost.

Avoid Store Cards

Store cards, and more generally, consumer credit (such as furniture store accounts) are useless for building your credit, and are likely to put a big dent in your scores. So if you are shopping and are offered a new account in exchange for a discount, think twice. Saving money is a beautiful thing! But if you need your credit scores in the immediate future for any major purchase avoid these accounts like the plague. How bad is it? You are likely to lose one hundred points. It’s credit repair suicide.

Call Credit Repair Pro

If you really want to put some muscle behind your credit repair effort, call a credit repair professional. They will proof read your credit reports, identify everything that should be done and insure that you are not missing anything. When it comes to credit repair every little bit counts. Good luck!

Copyright © 2008 James W. Kemish. All Content. All Rights Reserved.

Credit Repair and the Holiday Season

Here Come the Holidays

It’s that time of year again, and as the holiday’s approach we may find ourselves running up our credit card balances. A credit repair expert offers some seasonal advice about keeping your credit scores healthy during the holiday season.

Credit Repair and Holiday Spending

Credit repair is all about restoring and improving your credit. The holiday season makes financial demands on us that can send our credit scores into a tailspin if we are not careful. From Thanksgiving through New Year Day many of us find ourselves spending money faster than any other time of the year, which can create a potential credit repair challenge.

Credit Repair Facts

Parties, family dinners, gifts, travel, and even home decoration quickly add up. By the time our January credit card bill arrives we can rack up an impressive and daunting balance. In the world of credit repair, knowledge is power, so let’s take a look at the facts and see if there is a way to mitigate the collateral damage.

Revolving Debt is Not Always Bad

There is really nothing wrong with revolving debt. Credit cards can be handy, and on occasion they can be a lifesaver. Life is full of unexpected surprises. The car may need repairs, the refrigerator might break down; the list of possible surprises is endless. If you don’t have reserves, or just want to manage your cash flow, credit cards can be a convenient resource.

When Every Point Counts

The problem with revolving debt arises when it impacts your credit score in a moment that you need it for a major purchase. Many people turn to credit repair in these situations for urgent help. If you are getting a mortgage you should be aware that every point on your credit score can affect your interest rate. Automobile financing is also credit score sensitive.

Credit Repair and the Right Score

If you are going to benchmark your scores for credit repair purposes you need to be aware of the different credit scores available. The credit scores that lenders use when underwriting your loans are called FICO scores. FICO is an acronym of Fair Isaac Corp, the developer of the credit scoring model.

A Caution about Bureau Scores

Credit bureaus do not sell FICO scores directly to consumers. The credit scores that you can purchase from the credit bureaus and their army of internet vendors are not the scores used by lenders and often differ by 100 points or more. These scores can provide useful information, but are of less practical use for your credit repair.

Credit Repair and Revolving Debt

If you want to purchase your genuine FICO scores you need to visit MyFico.com, the website of Fair Isaac Corp. All three scores currently cost approximately $50 combined. The FICO scoring model puts significant emphasis on your revolving debt. The most recent release of the scoring model acknowledges five different levels of card usage: 20, 40, 60, 80, and 100 percent.

Balance Up Scores Down

The more of your available limit you use, the more impact it will have on your scores. You should think of a balance between 40 and 60 percent of your total available limit as neutral to your credit scores. If your balance is over 60 percent your score will fall. Over 80 percent, your score may fall up to 50 points depending on the overall strength of your other credit, and if you max out your balance expect to lose over 100 points; this is credit repair trouble.

Balance Down Scores Up

Conversely, the lower your balance, the better your score will be. If your balance is below 40 percent you will get bonus points, and below 20 percent you will be optimizing your score. If you need your credit to be at its absolute best try to reduce your credit card balances below 20 percent of your available limit. This can produce credit repair magic.

Allow Enough Time

Here is some holiday credit repair cheer. If you run up your balances, don’t worry. As soon as you pay down your cards your scores will rebound as if nothing happened. If you do not need your scores anytime soon don’t worry about your balances. Spend as necessary, but beware that when you need your scores it can take 60 days for the credit bureaus to report the new reduced balance, depending on the reporting cycle of the particular card issuer.

Easy Post Holiday Credit Repair

Have fun during the holidays, and do what you need to do. But be aware that when the season is over, if and when you need your credit scores to be at their best you will want to put your credit repair plan in action and pay those balances down as much as possible. Happy holidays!

Copyright © 2008 James W. Kemish. All Content. All Rights Reserved.