Collectors and Credit Repair

You may encounter a reasonable, mild mannered collector someday, but do not hold your breath. Collectors are trained to be emotionally effective. This means aggressive. They will keep you on the phone as long as they can in an attempt to bend your will to theirs. Their goal is to get money out of you, whatever it takes. Unfortunately, in their effort to dominate, they often step over the line of legality, and hence arises the need for credit repair techniques to neutralize their wayward conduct.

Stand Up For Your Rights

Do you have collection trouble? Here comes the Fair Debt Collection Practices Act (FDCPA) to the rescue. The FDCPA defines the behavior that collectors are allowed to engage in. The need for the law is self-evident, but you will not be surprised to hear that FDCPA rules are often bent, twisted, and even downright ignored. If you have been accosted by an aggressive collector you should take an hour, read the FDCPA, and arm yourself with the credit repair strategies you need to stand up for your rights! Here are some highlights to get you started.

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Identity Theft Concerns

There are a number of reasons you might have a concern about the illicit use of your identity. A lost wallet, unexplained accounts on your credit report, mysterious transactions on a credit card; these can all give rise to very reasonable worries about fraudulent activity. These events may be of little consequence, or they may be quite serious. Either way, there are a variety of credit repair solutions that you should implement immediately. Credit repair solutions include investigative, preventative, and curative, and all three should be employed.

Investigate the Issue

If you discover activity on your credit report that is not yours it may be the result of a file merger error. This means that someone else’s credit data has been merged with yours. As awful as this may sound, it is pretty innocent and has an easy credit repair cure. So, before you jump to conclusions about identity theft take a few minutes to investigate. Get copies of all three credit reports, circle the unknown accounts, call the creditors, and ask them if they have an account in your name. If they tell you that they have no record of the suspect account you are a victim of a file merger error. This is easily cured with a bit of credit repair. Just write to the credit bureaus telling them that someone else’s credit is showing on your report, and ask them to correct the error. Be sure to provide your identification. File merger errors are surprisingly common and the credit bureaus will most likely resolve the problem for you right away.

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Plan Your Credit Repair Effort

Are you planning to make an effort at credit repair? Make sure to do it right. An informed effort will produce amazing results, and subtle details can make a world of difference. Take a bit of time to plan your attack and you will prevail. Here are my five favorite credit repair tactics proven to produce solid and significant results.

1. Don’t Wait to Rebuild Your Credit

If a stretch of hard times have left you with no open accounts it is tempting to postpone rebuilding credit until your credit repair project has borne fruit. You may think that if you wait until your credit is clean you are less likely to get denied. Unfortunately, the logic is flawed. Your credit scores will not recover if you don’t have active accounts. And new credit takes time to yield positive credit score results. If you put off opening new accounts you will be disappointed with your credit repair project. Now is the time to start rebuilding. Open two secured credit cards. Do it today. Once you receive them, use them, and keep them active. But be careful to manage the balances properly.

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For those of us in today’s society who are unable to get a valid bank account or credit card, for whatever reason it may be, do I have the solution for you.

The answer to your credit problems, well, at least the beginning answer, is a reloadable credit card.

There are many choices out there today. You will find cards that are hidden fee friendly and unless you read the fine print, the company who is issuing the card will make out in the long run, kind of like some financial institutes that love to hit you with fees.

The best choice that I have found after doing my research is apply for any reloadable credit card that offers Credit Builder. What is credit builder you ask? Well, just as simple as it is to say it, it is that easy to explain it. Credit Builder is a tool that not all reloadable credit cards offer. This wonderful tool is used to help rebuild your credit while you are using their services. Thanks to a national credit reporting agency called PRBC-Payment Reporting Builds Credit, when you start to make payments on a regular basis with your new reloadable credit card, the company that you chosen and that offers the credit builder, will begin to report to the three main credit bureaus (Equifax, Experian and Trans Union.

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Credit Repair Knowledge is Power

Before reporting to the credit bureaus a collector must furnish a collection notice. This may be a straightforward collection letter, or may take the form of an offer to settle. Either way, the receipt of a collection notice is the beginning of your collection adventure. As with any credit repair issue you should take a few minutes to understand your legal rights. Collectors are governed by the Fair Debt Collection Practices Act (FDCPA). Understand your rights and you will be able to control the situation and maybe even come out ahead. When it comes to credit repair, knowledge really is power.

A Collection Letter is an Opportunity

If you receive a collection letter please don’t ignore it. You have a very special legal credit repair opportunity under the Section 809 of the FDCPA. For thirty days from the time you receive the letter you have the right to demand that the collector provide you with proof that they have the legal right to collect, as well as an objective accounting of the amount they claim you owe. This credit repair process is called debt validation. Once you have initiated your debt validation request the collector must cease all collection actions and not report to the credit bureaus. If the collector cannot provide the documentation required these prohibitions become permanent; the collector and the questionable account must vanish from your life and your credit report forever.

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Debt Settlement is a process in which a consumer eradicates his or her unpaid debts to his or her current creditors. Debt settlement serves as one alternative to filing bankruptcy. In debt settlement, usually an escrow, or trust, account is set up by the consumer who is facing a lot of debt. The consumer accumulates money in this escrow account every month in order to serve as proof that once a settlement on the debt has been agreed upon the consumer does indeed have the resources to begin making, and is capable of continuing to make, the payments in accordance with the agreement made. Many consumers chose to utilize a debt settlement company to settle their outstanding debts with creditors. Using a debt settlement company may be a wise decision for a consumer who is ready to get his or her finances in check but may not have the time to haggle and bargain with all of his or her current creditors. It is important to note however, that one should shop around for the best debt settlement company that suits one’s needs. Consumers should be wary of fraudulent debt settlement companies. Here are some things to look out for:

•Ridiculous Fees- Most debt settlement companies charge fees for their services. Consumers should be cautious of debt settlement companies that beat around the bush when asked exactly how much the debt settlement companies’ services cost. Before committing to a debt settlement company, consumers should ask for a break-down of their monthly payments; namely, consumers should find out how much of their monthly payments in the escrow account is going towards the companies’ fees and how much of their monthly payments in the escrow account is going towards actually settling the debt with creditors.

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On October 19th, 1987, the stock market experienced one of “…the largest one day stock market crash{es} in history”. The Dow went down by a value of $500 billion, or 22.6%. Additionally, the Nasdaq composite lost 11.3% and the S&P 500 Index to lose 20.5%. The crash was escalated by a bull market commencing in 1982, characterized by merger mania, hostile takeovers, and leverage buyouts. In order to raise capital to execute company buy-outs, companies issued junk bonds (very risky bonds with high return rates) and initial public offerings (IPOs.) In the 1980s, technologies for microcomputers were booming. These advancements glorified investors’ economic opportunities in many, many companies. Unfortunately, at the beginning of 1987, the Securities and Exchange Commission (SEC) began to investigate illegal trading activities and fraudulent IPOS. The great economic growth, surged by investors buying and selling, urged the Fed to raise interest rates for the short-term. Raising the interest rates caused brokerages to use portfolio insurance. Unfortunately, brokerages would now benefit from the market crashing. The market became unstable, people were attempting to sell like crazy, but there were no people wanting to buy shares due to the market’s instability. This was a downward spiral. Consequentially, the Fed lowered short-term interest rates, thus marking the recovery of the market, implemented by the buyback of companies’ own shares due to the shares’ under-evaluation.

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With the economy in the state it’s in and foreclosures at a record high, many consumers are falling victim to the housing slump. Over the last year renters are being evicted from their residences because the landlord has defaulted on the mortgage. People are being forced on the street and some aren’t even receiving their security deposit back. In these turbulent times educated consumers are beginning to capitalize on the situation rather than falling victim to it. The housing industry is now becoming a buyer’s market with so many homes being sold at huge discounts (so the banks can try to get some of their money back). Everyone that is currently renting is urged to consider home ownership. You can purchase homes for lower prices than ever before and don’t have to worry about ending up on the street because your rental property has been foreclosed on.

Owning your residence also has many bonuses. Your monthly payment is going towards owning something rather than just paying your landlord money each month and having nothing to show for it. A mortgage on your credit report will look favorably to creditors and may increase your credit score. Lenders like to see that you have a diversity of accounts on your credit report and can handle credit responsibly. Now is a better time than ever to consider purchasing your own residence. (more…)

Many companies and programs are offering fast credit report tips, however they often come with a hefty price tag. There are many things the average consumer can do to make improvements without the help of a professional. If you have the time and a some organizational skills, and a do-it-yourself attitude, you can increase your credit score rather quickly. In some cases the results can be a couple days, but within 30 days significant improvements can be made.

The first step is to access a copy of your credit report and review it for errors. Seventy-five percent of credit reports include inaccurate information. One in four reports include errors that actually hurt you in a negative way, so pay particular attention to loans that you never took out, credit cards that should have been closed years ago, and late payments on accounts that you’ve always been on time for. If there is something as serious as a bankruptcy filing that does not belong to you, that is something that would take immediate priority, as you might be a victim of identity theft.

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