negotiate your debt

Negotiate Your Debt Like A Professional!

Often when a consumer is up to their ears in debt and toying with the idea of filing for bankruptcy, but either can’t file or doesn’t want to, there are other options. Were you aware that the consumer can negotiate with their creditors and end up paying a significantly smaller amount than what is owed?

The Factors Involved In Negotiating Your Debt

Depending on many factors, a consumer can negotiate their debt down. Some of the factors include the age of the debt, the date a payment on the debt was last paid and the amount of interest and fees that have been added to the debt owed. Sound interesting? Read on it gets better.

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credit repair

Credit Repair Letters | Anatomy of A Credit Dispute Letter

Credit Dispute Letters: The First Step In Repairing Your Credit

The Fair Credit Reporting Act or FCRA of 1970 has recently been strengthened in order to allow anyone to dispute negative items on their credit report. This can be done with a credit dispute letter and in turn the credit bureaus must either delete the listing or verify it.The key to repairing bad credit is to write a properly formatted credit dispute letter to one or all of the credit bureaus and send them out via registered mail.

Always keep a copy of your correspondence and the receipt from your registered mail letter for further reference. It is also important to make copies of your credit report to include in the letter, not originals.  If you have a membership with one of the credit bureaus, you can dispute the inaccurate information on that bureau ALONE on thru that membership.  You will have to contact the other 2 credit bureaus manually.

Below is a step-by-step guide to writing a letter of dispute to get rid of those black marks off your credit report for good.

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file for bankruptcy

Bankruptcy: What to expect?

The exact details on bankruptcy proceedings may vary from one State to another. For those who intend to file for bankruptcy, they should be aware of the bankruptcy laws amended in  October 17,2005 which no longer allowed you to file for bankruptcy on your own.  It laid out a series of procedures you must go thru first in order to declare bankruptcy.  . Let’s take a look at the basic procedures or changes made in the bankruptcy law.

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debt consolidation loans

Do You Qualify For A Debt Consolidation Loan?

Debt consolidation may sometimes be necessary when debt problems get too much to handle. With the help of a consolidation loan, you can pay off all your existing debts at once. Such a move is beneficial in many ways. How?

First, it instantly eliminates the stress and trouble of dealing with different creditors all the time. Because creditors are paid in full, debt consolidation prevents debt from further accumulating. It also enables you to lower your bills because you’ll only be paying a single interest at a much lower rate. And because there’s only the debt consolidation company to pay, keeping track of due dates and submitting payments on schedule is made easier and more convenient.

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file segregation

File Segregation – A bad idea

File Segregation Is Fraud

This old trick seems to be gaining popularity again. File segregation is the practice of creating a new credit file using a fake, stolen or some other form of tax identification number instead of your own social security number. Many people feel this is the only way they can enjoy good credit again, but one thing to keep in mind is….FILE SEGREGATION IS ILLEGAL!

I’ve seen some people’s credit reports that have attempted this. At first it works well for them, they easily get a secured credit card and start building a new credit file under this number. I’m not sure if its just a common slip up or that old adage that “there is no such thing as a perfect crime” but everyone always makes at least 1 mistake…..and that one mistake leads to a hawk alert on your credit report and a credit file merge.

What is a Hawk Alert

Its simply one of the alerts the credit bureaus will put on a credit report that they suspect has had some sort of manipulation or fraudulent activity.  Recently we had a client apply for a business loan that was using his sons social security number.  There was an alert on his credit report alerting us that the Social security number was issued in 2008.  Well that was a BIG read flag.  The sad thing was his sons credit report was shot!  It had dozens of inquiries, lots of credit cards and unfortunately lots of charge offs and collection accounts.  Because of what his father has done, this poor young man will have a lot of work to do to fix his credit when it comes time for him to create his own file.  But unfortunately, using a child’s SSN is one of the easiest ways to obtain a SSN for file segregation purposes.

What Is A Credit File Merge

A credit file merge  is when all that old bad credit that they where running away from merges onto the new credit report along with a BIG RED FLAG in the form of an alert at the top of their credit report advising creditors that you have credit under an assumed name.

What does that tell your creditors or future creditors….WATCH OUT!

Its really not worth your time or money to try file segregation. It would be better for you to just work on rebuilding your own credit .

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Credit Repair Companies…Are they for real???

Well the answer is yes…and no. Companies that claim they will erase all your past credit mistakes are generally not being 100% honest.

You can’t erase your past, you can just make better choices in the future.

All a credit repair company can do for you is dispute items on your credit report…and to be quite honest since you are on this site, you know you can do that yourself! All you need is access to all 3 credit bureaus. Companies like FreeCreditReport.com from Experian can provide you with instant access to your credit report. As there name states the “Free” report they give you is only for Experian, but if you upgrade (and I would if I was you) you can see all 3 scores.

Most agencies just send out removal request after removal request to the credit bureaus hoping that they might be able to get 1 or 2 thru. Its not real credit repair just being obnoxiously persistent! Many credit bureaus are wise to this practice and begin to discount and penalize such request by flagging your account. That way when they get yet another letter requesting removal of some credit line or another from you , they will not give it the attention it deserves.

Save yourself time and money! Only dispute LEGITIMATE errors on your credit report. You can use the letters on this site, but make sure you write an ORIGINAL letter explaining your UNIQUE situation. Believe me, the agencies have probably seen a lot of these credit repair letters that you find online already. You will not get the attention that you need and deserve sending a form letter.

Make sure your letter is detailed and if you have any proof, include a copy of it in your letter. Keep track of your disputes and all responses you receive back. If you are not good with details or record keeping then ask a family member or friend to help you. If you they can’t help you, then and only then would I contact one of the many online companies to do it for you. One such company is Lexington Law Firm.Good Luck!


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Free credit score.com …More than just a catchy jingle!

I LOVE their old commercials. That jingle sticks in mUnderstand Your Credit Scorey head…. I just wish I had really HEARD its message and not just hummed along w/ the jaunty tune.

I constantly tell clients if they are going to apply for a loan, lease or credit card to first make sure they have pulled their most recent credit report. Well I ignored my own advice to my own detriment.

I got turned down this morning for a card based on the fact that I’m carrying too much revolving debt, in spite of having scores well in the mid 700’s! A good score doesn’t go as far as it used to!

If I had had FreeCreditScore.com from Experian I would have checked to see if my recent payments had posted & my credit report now reflected my new low revolving balance status before applying. I had given my payment nearly a month to post so I thought it was ok to apply. I was wrong. They only send in their tapes for updating once a month and I had applied about a week too soon. As I spoke with the woman at AMEX I was surprised again to learn that she felt I should actually wait 2 or 3 months before applying again because I had been carrying a few large balances for the last 4 months.

Lesson Learned!

In today’s credit crisis having good scores is only 1 piece of the credit approval process. They are actively looking at HOW MUCH of your credit is revolving. If I had taken the time to sign up and do a quick check before applying I could have avoided the inquiry on my credit and subsequent turn down.

FreeCreditScore.com from Experian boast a quick and easy sign up and in less than 5 mins I could see all 3 scores.


Understand your Credit Score

 

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