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Posts Tagged ‘Credit Reports’

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Credit Bureau Blues? Contest That Debt!

February 17th, 2010 by Matthew C. Keegan | 4 Comments | Filed in Credit Reports

Credit reports contain important information concerning you including where you reside, work, in addition to particulars in relation to your credit history. Lenders, employers, landlords, hospitals, and various parties can easily acquire copies of your credit reports to discover your creditworthiness.

housing crisisIn a June 2004 survey, the Public Interest Research Group (U.S. PIRG) discovered that one in four credit reports contained serious enough errors to deny consumers credit, keep them from getting an apartment, or be denied employment.

Obtain your credit reports. You found an error on one credit report, but you should check your other two reports to determine if this same mistake continues to be included on those as well. Experian, Trans Union, and Equifax are the three credit reporting bureaus.

You can obtain one free copy annually of each credit report by visiting AnnualCreditReport.com. Review each report; errors must be reported directly to the respective credit bureau.

File a credit report dispute. According to the Federal Trade Commission (FTC), both the credit bureau and the information provider must correct inaccurate or incomplete information appearing on your report. In your case the information provider would be a lender who insists that you owe them money.

Send a dispute letter to the credit bureau explaining why you believe certain information is incorrect and include copies of supporting documents such a copy of your loan showing that it has been paid off. Visit the post office and request that your letter be sent by certified mail with return receipt requested in order to ensure that the consumer reporting company received it. Keep copies of your dispute letter and enclosures for your records. Repeat this step with each credit bureau only if that information appears on their reports.

Wait thirty days. Once you have filed your dispute, the credit bureau has to investigate your claim, something they must complete within thirty days if your claim has merit. They will contact your lender and provide to them a copy of your dispute letter and supporting documentation for their review. Once the investigation is complete, then the credit reporting bureau must give to you their findings in writing.

If ruled in your favor, then the credit bureau will also issue to you a free, corrected copy of your credit report. You will also be supplied with contact information of the information provider. You can also request that the credit bureau, at their own expense, notify everyone who has looked at your credit report within the past six months that a dispute has been settled in your favor. For employment purposes, that right extends for two years.

Follow up with the credit bureau. If the credit bureau determines that the debt has not been settled, then you can arrange with your lender to make payments or a settlement. You may also want to ask the credit bureau to place a statement of your dispute in your file and in future credit reports. That way people who obtain copies of your credit report know that you have addressed the issue.

Considerations

A sample dispute letter is available on the Federal Trade Commission site. Send your letter and supporting documents to the address provided by the credit reporting bureau.

Cautions

Make sure that the information in your credit reports is accurate before applying for a loan, buying insurance, or applying for a job. The dispute process can delay everything else until your situation has been resolved.

Resource

The New York Times: BASIC INSTINCTS; Credit Reports: They’re Free But Flawed


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Do Debt Relief Companies Offer Real Help?

December 17th, 2009 by Matthew C. Keegan | 5 Comments | Filed in Consumer Tips, Debt Management

Consumers who find themselves in a financial bind often turn to debt relief companies to aid them in the recovery process. With professional assistance, cash strapped consumers may find that debt settlement services can provide the help that they need by extinguishing their debt, lowering their credit card interest rates, or coming up with some other plan to help them manage their finances better.

Debt Settlement

money trapUnfortunately, what consumers sometimes discover is that the debt settlement services don’t always explain what they do for the consumer nor do some understand that they can handle the bulk of these tasks themselves.

For example, if the most significant problem you have is the high interest rate on your credit card, you can get it lowered simply by asking. Lucy Lazarony advises, “A five-minute phone call to your credit card issuer could save you hundreds, even thousands, of dollars in interest charges.” (see Bankrate.com: Want a lower credit card rate? Just ask)

Though there isn’t any reason for a credit card provider to lower your interest rate, if you politely make your request known to them you may get the lower rate. If you find resistance from the bank, explain your financial position. Better to lower your interest rate than to have you file for personal bankruptcy which means they’ll lose everything.

Lump Sum

Another way that you may be able to help your cause is by offering your creditor a lump sum to settle your account. Instead of making monthly payments which may last for many years, you can ask your creditors to accept a lump sum in exchange for paying off your obligation and closing your account.

According to Sarah Rubenstein, debt settlement companies “…often charge high up-front fees, and their strategies can drag down clients’ credit scores and even make their debt burden balloon.”

You think you’re paying off your debt, but there is no guarantee that the settlement company is negotiating with your lenders, sending off payments, and settling with your creditors. Worse, your credit may be trashed for many years to come. (see The Wall Street Journal: How to Fix Your Life in 2009)

Nonprofit Help

Some consumers are attracted to the nonprofit status of a debt relief company thinking that this assures them of receiving good service. Harry Weisbaum urges, “Don’t rely on names or the claim of a non-profit status. Check them out with the Better Business Bureau or your local consumer protection office.”

What’s more, you need to learn what fees are charged including set up and monthly maintenance fees for this service. According to Weisbaum, the Consumer Federation of America identifies a $50 set up fee and $25 monthly service charge as being fair. (see MSN Money: Debt relief deals ‘preying on consumer’s trust’)

Do Your Homework

When hiring any debt relief or debt settlement company (these names are often used interchangeably) you need to find out what services are offered, fees charged, and how this company can help you get back on track.

In any case you can do much of the work yourself including following the debt reduction tips offered on our related SayLending.com website. And, download copies of your free credit reports at AnnualCreditReport.com to make sure that all debt obligations are correctly reported.


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Free Credit Reports & Where To Get Them

September 8th, 2009 by Matthew C. Keegan | 2 Comments | Filed in Credit Reports

The Federal Trade Commission (FTC) through an act of Congress has authorized that all three major credit reporting bureaus provide one free copy of your credit report to you on an annual basis. This ruling has proven to be a boon for consumers who are now able to learn what creditors are saying about them and quickly respond to errors and omissions. However, not all businesses offering to help you obtain your free credit reports are in truth free. So let’s review how you can know if a particular offering is right for you.

Cutting up your credit cards is one way to control spending. But so is obtaining free copies of your credit reports to see if youre creditworthy in the first place.

Cutting up your credit cards is one way to control spending. But so is obtaining free copies of your credit reports to see if you're creditworthy in the first place.

Firstly, only AnnualCreditReport.com is the web site recognized by Experian, Trans Union, and Equifax to supply free credit reports for consumers directly by these three big credit reporting bureaus. At that site, you can get one free copy once per year from each company, however you will have to pay $5-8 to receive your credit score, which is separate from your credit report. You don’t have to order your score, but it is valuable information that every consumer should have.

Secondly, there are companies out there who claim to provide free copies of your credit report and credit score. At face value these schemes might look like acceptable offers, but they almost always come with caveats, namely requiring you to purchase some other services. These services may include credit monitoring, credit watch, and so forth. Charges for these services vary, but you’ll probably commit to paying $8 to $12 per month for most plans. Together, you may pay out more than $100 annually for this kind of program while it would only cost you $20 or less yearly through the FTC’s authorized site at AnnualCreditReport.com

Finally, it is not illegal for these businesses to offer these services to you. It can seem to be a bit deceptive, but they normally are upfront about what is being offered to you through their plans. However, if you obtain your credit reports on a scheduled basis, then you simply don’t need their credit watch service. Just keep on the alert for possible problems cropping up through your free reports.

If you choose to utilize a credit monitoring program, make sure that you can cancel the plan at any time. Stay away from yearly contracts but consider using these kinds of businesses if you need an extra pair of eyes to watch out with you. In some cases (such as an ongoing identity theft issue) these services may be helpful, but in the majority of cases your personal oversight will do the trick while also saving you money.

Resources

Check Your Credit

Federal Trade Commission

Financing Tips


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Should You Consider A Debt Consolidation Loan?

June 1st, 2009 by Matthew C. Keegan | 1 Comment | Filed in Consumer Financing, Consumer Tips, Credit Cards

With the financial markets having basically collapsed and with personal credit tighter than it has been for years, thinking about a debt consolidation loan seems like sheer lunacy to some. After all, wasn’t it irresponsible consumers and greedy lenders who got us into this mess in the first place?

money trapOf course, that mindset is like taking a broad brush and painting it across every lender and consumer you see. Most certainly, not every consumer is overwhelmed by debt and not ever lender is looking to abuse consumers. You’re certainly not likely to get a bunch of debt consolidation letters or credit card offers in the mail as was common as recently as last summer, but lenders will loan money to people who have maintained good credit all along. In this case the operative word is good so be prepared to have your credit history examined thoroughly before applying for a loan.

Your Doubts About Debt Consolidation

Even with good credit you may have some doubts about obtaining a debt consolidation loan. In the best case scenario, a debt consolidation loan would tackle all of your debt and replace it with just one, low monthly payment. At least that is what the advertisement says it will do!

In actuality, that may not occur. In fact, bad credit could sink your loan application or force you to compromise by accepting a higher interest rate for your consolidated loan. Just in case you don’t realized this, a debt consolidation loan is unsecured debt – just like your credit cards – which means your loan rate will be quite a bit higher than a loan that is secured by your home or other personal property. Thus, your hopes of securing a loan rate of 10, 12 even 15% isn’t likely. Expect 20% or higher instead!

Considering Your Financing Options

If you’re not careful about choosing the right loan you could end up going from several hard to manage debts to one impossible to control debt. Or, in a bid to procure a lower monthly payment you could find your loan dragged out for ten, fifteen even twenty years or longer. However, if you were to stop using your credit cards and began working toward reducing your debt, you might see your bills paid off in four or five years time. That’s a huge difference in repayment time and you would save on interest charges as well.

In the end, the big difficulty for you is changing your conduct. You may need to take on a second job to have the funds on hand to lower your debt or you could get hold of your credit card providers and tell them you are in a desperate financial situation. Yes, just by hinting that you are considering personal bankruptcy you may find your APR as if by magic reduced on the spot. You just don’t know, but it could be worth a try.

Adv. — Have you checked your credit report lately? How about your FICO score? As a consumer, you need to be on top of your credit history, checking for errors and making certain that the information in your consumer credit reports is accurate. Employers, banks, mortgage companies and other lenders base your credibility on a three digit score. Avoid surprises — check your credit report today!


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