My first reaction was …WHAT THE>>>  Seriously, it’s not every day one of the big 3 credit reporting agencies calls and wants to work out how we can work together. Needless to say, my interest was sparked but as well my radar was going off all over the place. After the first call I told them I felt like I was a mouse looking out of the hole in the kitchen sniffing at this big old piece of cheese that was just put on the old mouse trap. And that when I reached out for the prize… WHACK…the hammer would fall and I’d lose my head!

I can’t help it, it’s just how I felt. So caution was in the air but…

After a second call and much investigation it appears that they are reaching out to the top credit repair companies in the country. By top, I mean in shear number of disputes being sent in on a monthly basis. That was pretty cool as there is no place to go to discern where we rank in the big scheme of things but if they say we are on the list, then I wasn’t going to argue that point!  As a matter of fact, we were on the list of the top 25 in the entire country for them to reach out to based on the total volume of disputes.

As I let the discussion continue it truly seems as if they have turned a corner, at least I hope they have, in coming full circle. They acknowledged they want credit reports as accurate as possible and who better than to have “approved” vendors like National Credit Federation that know the specific items that are wrong on one of our members credit reports, to be able to help?

As I let that absorb, I advised them I felt if they were sincere in their words that it did indeed seem like a win/win/win situation.  They cut costs, we cut costs and most importantly for our members a streamlined process where we can better control the overall process.   I also advised them that the overall results still would determine the success, to which they agreed.

Wow, who says Christmas only happens once a year!  I’ll keep you updated as things progress but it does look like because of our persistence of battling with the credit bureaus and so many of you sending in your referrals as well as signing up for our credit restoration service the tide is beginning to turn!

Be Bold!

The post Is TU stepping up? appeared first on National Credit Federation.

Jack’s situation was that he had paid off several bills with a bonus check from work about 10 days ago.  He had called the three credit card companies involved and verified he had indeed posted the payoffs which totaled almost $6000.  He then had his mortgage broker pull a new credit report thinking he would have the increase in credit score that he thought the payoffs would give.  He only needed about 17 points to qualify for this loan but was told that his scores had actually gone down 2 points from a month prior.

Well this is what prompted Jack’s call.  He was confused and upset that he had read something I wrote previously about how FICO computes credit scores.  He thought that by freeing up his credit lines and paying down the debt would help his credit scores.   Was he right?

Upon review of Jacks credit report it did look like he would benefit from a score increase by paying down the $6000 of the $9000 worth of credit lines to cut his outstanding credit line usage from 67% overall to 0%.  so why didn’t he get any boost in his credit score?

Well. the answer to this in one of the myths regarding credit reporting.  Credit Scores are computed only on a snapshot of a credit report at the exact time the report is requested.

The problem is that most creditors only report to the credit bureaus one time per month.  Credit Bureaus are NOT real time so if you make a payment or payoff an account as in Jack’s case it might be days or weeks before the creditor reports it to the credit bureau and thus any FICO credit score change taken into account.

After Jack realized what was happening he was relieved that the bump he hoped for in credit score was most likely just a couple weeks away.  But Jack did ask a very good question…This process seems screwed up, most everything else we deal with is in real time, why aren’t the credit bureaus?

It is 2011 almost, right?

The post Credit Scores … Real Time? appeared first on National Credit Federation.

When someone researches their credit report for problems and finds collections, usually the immediate response is to begin looking for ways to correct or remove those items from their credit report. The good news is there are a few ways. The most popular way is by disputing them with one of the 3 main credit bureaus (Equifax, Trans Union and Experian) that are reporting them.

You can also contact the collection agency directly and try to… work out a deal with them.  Please make a note here, you must be careful as it is possible to cause more pressure on your credit scores and the level of intensity of the collector.  You simply ask them to remove it in exchange for paying the debt in full or settling in full.   This is called pay for delete. Many collection agencies will tell you that they can’t remove it, but they definitely can. Credit reporting is 100% voluntary and anything that can be placed on it can be removed at any time.

If a collection agency doesn’t cooperate with you, simply don’t pay them because even if they upgrade the account to “paid collection” it is still on your credit report for 7 more years from the date you paid, unless you get them to remove it.  Worse still is in many cases paying a collection will bring your scores down. Of course, you always want to get the agreement in writing as collection agencies don’t always have the most trustworthy people working for them.  Never ever take a verbal agreement with a collection company.

Many people stumble on this part and are unable to persuade the collection company to give a letter of delete and may just believe that paying the debt off will help their credit scores. After the collection company has your money they simply no longer care and will not help.  This is why most complain that this collection or that one should not be reported as they accepted a verbal agreement.  It’s a costly mistake and can be easily avoided when obtaining the services of a professional.

Lesson…most have troubles negotiating with a collection company. To find out if debt settlement might help you check out www.smartdebtrelief.org. Enter in your collection debts, credit card debt or other unsecured debt into the calculator to see just how much you might save every month.

Be Bold!!

Herschel

The post Collection Companies are a pain! appeared first on National Credit Federation.

Sometimes old debt that you thought was long ago dead and forgotten comes back to haunt you.

A scary practice performed by junk debt buyers and collection companies is the purchase of old and often outdated debts for pennies on the dollar and then come after you for payment.

These outdated debts are known as Zombie Debts which you may have to kill if they resurrect from the grave.

Over the last several years debt buying has emerged into a multi-billion dollar industry.  Junk debt buyers from small one man operations to large publicly traded Wall Street companies are buying up this old debt by the billions and are banking on the consumer being ignorant of law and their rights.

Here are a few things you can do if you are contacted about an old debt:

1 Do not acknowledge the debt. When you agree to pay a portion or even acknowledge the debt as yours you can hurt your credit by restarting the 7 year clock which is how long most bad credit can stay on your credit report.  If you’re close to the 7 year mark it may be best to do nothing at all and just let it fall of your credit report.

2 Simply ignore the phone calls. Just speaking with these debt collectors may extend or even restart the clock on the statute of limitations for the debt let alone restarting the 7 year clock the debt may be reported on your credit report.  If the statute of limitations has run out on a debt then you cannot be sued for it.

3 Get the phone calls to stop. If the phone calls become harassing and continue simply write a letter demanding the collection company ceases any phone contact.  Federal Law requires collection companies to comply with all requests to cease phone contact but make sure you send this letter certified and that you state in your letter that you are not acknowledging nor agreeing that the debt is yours.  You simply do not want further phone contact.

4 Check your credit report. At a minimum once per year I’d even suggest more often because collection agencies have been known to stoop to downright illegal tactics in order to squeeze any money they can out of you.  They will report the old debt to the credit bureaus as if it was a brand new debt which is known as re-aging in order to restart the 7 year credit reporting clock which can drop your credit score like a rock!

5 Demand the debt to be validated. Debt validation requires the collection company to produce a copy of the original signed paperwork as well as the payment history of the debt.  Most often they simply can’t do it and will go away.  Proof that they are licensed in your state as well can send them packing as they are in violation of the Fair Debt Collection Practices Act and any negative entry they make on your credit is a violation of the law and must be removed.

6 If you must negotiate with caution. If you want to pay the debt move ahead with extreme caution and make sure you get everything in writing.  Collection companies purchased the old debt for pennies on the dollar so anything over that is pure profit to them.  But BE CAREFUL these companies are ruthless and will hang you out to dry if you don’t know what you’re doing by selling the remaining debt owed to another collection company and thus the cycle continues.  They may even report the remainder to the IRS as “income”.  See how well that “income” pays the bills!  You can find more on how debt settlement might help at www.smartdebtrelief.org

7 Beware of the collection company false promises. Many times you as a consumer run into a brick wall trying to remove a bad credit rating by requesting a letter of deletion.  Some debt collectors will lie and use any dirty underhanded tactic they can in order to collect money from you.  So if they do agree to any request you might make, just be sure to get it in writing.

So in your battle of dealing with this Zombie debt which can include any charged off debt, debts included in bankruptcy, debts incurred due to identity theft as well as debts you never even owed keep in mind most of these debts will be well past the statue of limitations and uncollectable.  If you’d like to have your credit report reviewed and find out what might be done get a no obligation credit consultation with a certified debt specialist.

Drop me a quick line below and let me know of your Zombie stories and what happened.  Just keep in mind if you run into a zombie collector…

BE BOLD!

The post How to deal with Old Debt…Zombie Debt appeared first on National Credit Federation.

The short reality is every single entry on your credit report is suspect. The Fair Credit Reporting Act (FCRA) and law that states you as a consumer have the right to challenge the credit reporting agencies (CRA’s) and demand removal of any trade lines that are reported inaccurately, that cannot be validated or simply outdated.

The law requires the credit bureaus perform their own credit repair by advising that a bankruptcy can remain on your credit report for up to 10 years.  Most other items must be removed at the 7 year mark.  Now a bankruptcy CAN remain on your credit for up to 10 years.  No where in the FCRA or any other law for that matter does it say that it MUST be on your report.  As a matter of fact, there is nothing in the law that says it HAS to be on your credit for 10 mins, 10 days  or 10 months let alone the 10 years.

Now, let me point out the law says nothing about this, that is if the bankruptcy actually happened you can’t do anything about it.   Certainly, you would never want to form your dispute by denying the bankruptcy is yours if you really did file a chapter 7 or 13 bankruptcy.   I mean truth be told, if it happened it happened, but that’s not the issue here.  During the credit repair process, a challenge to the CRA’s is simply a demand for investigation to validate the case, to verify that every single thing reported is accurate.

The FCRA says that if certain time lines are not met and if proper validation and verification of accuracy of the bankruptcy are not met then the item must be deleted from your credit report.   Not to kill you with all the dirty little details but a large percent of all trade lines have mistakes and simply cannot or will not be validated.

The trick is to know what you’re looking for and how to prepare the disputes going to the credit bureaus.  If you’re interested in reading more about this you may want to dig into the FCRA so make sure to check this out…CLICK HERE. The actual section you can review is 611 (click here).

I hope this gives a bit more clarity to this question.  Let me know your thoughts…

Be Bold!

Herschel

The post Can you legally remove a bankruptcy with credit repair? appeared first on National Credit Federation.

When you’re looking for a new mortgage many lenders evaluate your credit based on the “Three C’s.”

Credit
Is it likely that you will repay the loan? Are your payments on time and up-to-date? Are you financially stable and reliable?  What are your credit scores?  Today’s marketplace, most conventional lenders require your scores to be in the 700+ range and most FHA loans a 620 score or higher.

Capacity
Are you able to pay the loan? What kind of outstanding personal debt do you have? Do you have enough earning power and net worth to repay a mortgage or home equity line of credit?

Collateral
What is the value of the home you are purchasing?   The more money you put down the more favorable an applicant you become.   The zero down loans are pretty much a thing of the past so a down payment.  The lower the LTV or loan to value the lender is evaluating the better your odds.

There are a few more factors mortgage lenders look into when evaluating your capability of obtaining a loan. To confirm your responsibility and stability they may examine:

• Your monthly income
• Occupation and length of time with employer (two or more years is ideal)
• Home ownership status and history
• How often you move or have moved; patterns of behavior and the timing of that behavior

And there are other examples such as, if you had a charge-off (when the creditor sells your debt to a collection agency) in your credit file from several years ago and you’ve been able to maintain your credit over the years, you will be judged differently from someone who recently had a charge-off.

But whatever the case, it’s imperative to get off on the right foot when rebuilding your credit.. It is important to establish good credit behavior as early as you can in order to build a solid credit reputation.

Essentially, credit bureaus will look for five main characteristics when determining how high your credit score will be.

In descending order, they are:

1. Past delinquency. If you have failed to make payments in the past, lenders fear you will repeat that behavior based on your bad credit history.
2. How your credit has been used. Have you maxed out or spent close to the limit on a credit card? If so, then you may be considered a greater risk than someone who is more conservative with his or her credit line. Do you pay off your bill every month or a keep a revolving balance?
3. How long you’ve established your credit history. The scoring models can judge each individual separately. Credit reporting agencies may take into account the duration of a person’s credit history.
4. Frequency of credit inquiries. It is recommended that you check your credit once a year to see if you have a good or bad credit rating. Creditors requesting reports several times in a short period may send a signal that you are applying for a lot of credit due to financial difficulties, or that you are taking on too much debt and overextending yourself.
5. Your credit variety. It is best to have a mix of installment and revolving loans (e.g., auto, credit cards, retail, etc). On installment loans, a person borrows money once and makes fixed payments until the balance is gone, while revolving borrowers make regular payments, each of which frees up more money to access.

It is important to understand all the factors that determine if you have good or bad credit. It is never too early to begin building a good credit history and avoid bad credit inconveniences in the lending process.  In addition, you’ll want to perform a bit of credit repair on any of the bad credit if you have any inaccuracies, outdated or any credit items not validated being reported.

If you’d like you can find out more about your credit report by getting a free consultation (Click Here) we’d be happy to help you determine what needs to be done to “prepare you credit” before you apply for a new loan.

Post your comments and let me know your thoughts.

Be Bold!

Herschel

The post What are mortgage lenders looking for? appeared first on National Credit Federation.

If you want to be successful financially, your credit report can be one of the most important tools in your arsenal. A good credit report opens doors to opportunities others do not have, such as getting a small business loan or investment loan.

Protect the following detailed items in your credit report like gold!

1. Personal Information Section: This area discloses things like your names, surnames, known aliases, Social Security number, date of birth, your current address and previous addresses, place of work, name of your spouse, open credit accounts, judicial cases and any public document, like bankruptcy and mortgage execution (foreclosure).

This tells a creditor about your character and habits.  They can make assumptions, like changing your residence every few months might show some instability.  If your employment changes often, this might show a bit of a compromise in your ability to pay your debts.

To avoid discrepancies in your file, try to maintain consistency. One example, always use the exact same name when applying for credit.  Simply stated, if you use your middle initial on one application then don’t use your full middle name on the next.

2. Credit Accounts Information: This reports all types of mortgages, personal loans or your revolving accounts such as credit cards.

Also reported are which credit cards are active and which are closed, the amount you owe on each one, total of the minimum payment, if you have made your payments timely, and how many times you’ve been late in making payments.

The best way to take care of your credit is to pay your accounts on time.  The number of late payments as well number of total negative accounts can give you a bad credit reference. In the calculation of your credit score, the number of late payments carries tremendous weight. It represents 35% of your overall score.

If you have difficulties paying on time, call your creditor and negotiate a new payment schedule. That way you will not get penalized for late payments. You will avoid late fees and you can avoid a negative blot in your credit report.

3. Credit Inquiries: Reports all businesses that have requested information on your credit, whether you have applied for a specific credit card or seeking to rent an apartment.

It provides details on businesses that have investigated your record. The details include names, addresses, dates and reasons for the inquiries. To many requests for new credits cards, for example, most likely to portray you as an avid user of credit cards. You could appear as a credit risk, especially if all those credit card requests were approved.

4. Credit Score: This number is created by an algorithm or a summation of scores between 350 and 850 which lenders can determine the quality of your credit and the likely hood of repayment.  All Lenders use slightly different criteria in judging this score but the higher the score the better.

The better you understand the different factors of the credit report the better job you can do to keep your scores at a higher level and over the course of time can mean hundreds of thousands of dollars in saved interest payments.

Lastly, credit repair and clean up of any negative items on your credit report can help raise your credit scores.  Check out this video on how our attorneys can help here.

If you would take a quick second and post a comment about what you’ve read here and anything you think might help others.

Be Bold!

Herschel

The post 4 important factors about your credit report appeared first on National Credit Federation.