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I’ve spent many years writing a lot of letters. Not love letters unfortunately but letters to deal with credit issues. Letters to creditors, collection agencies and credit bureaus.

You’d be surprised just how many people do not how to write a letter, not because they’re uneducated but because these letters are tricky in nature. Anything you put in writing to a creditor or collection agency can come back to haunt you in a big way.

When a consumer uncovers a negative entry on their credit reports, their first instinct is to contact the source and try to improve it or remove it. But if your dealing with a collection account that is a big mistake unless you know what you’re doing.

The collection agency can easily get you to admit the debt is yours or worse, pay it before you’ve even had a chance to determine if its truly accurate. I don’t think you’d pay someone else’s bills so why pay an invalidated debt?

People do though, all the time. The truth is, you should never simply pay a collection item on your credit reports without first asking to have the debt validated. Validation of debts is where you ask the collection agency to provide proof to you that the debt is valid such as, balance, date of last activity, charges and supporting documentation.

Once you have clearly investigated the debt then you would be wise to send the agency a letter. Phone calls don’t preserve your rights so make sure everything is in writing. Remember, a collection agency isn’t your creditor. They are hired simply to collect debts.

Whether you decide to pay it or dispute it, you need to be careful how you word your letter because it will become ammunition for the debt collector to come after you.

If you decide to pay it, because you’ve determined it is accurate and you owe the money, draw up a letter advising the collection agency that you will pay the debt if they agree to remove the item from your credit reports. You really don’t want a “paid collection account” on your credit because it still looks bad. You want it gone.

Some may say, well isn’t that illegal? Absolutely not. A collection agency owns the right to the debt and just as they reported it, they can remove it. Most of the time the agency only places it on your credit anyway as a collection tool. To get you to contact them. It’s a bargaining chip. It is not the same as a creditor who must report your credit history during the time you do business with them.

I’ve deleted tons of negative entries on credit reports back in the day before I began offering financial advice simply because I asked. You cannot underestimate how bad the agency wants to collect the debt and they will bargain with you.

On the other hand, if you feel the validation process proved the debt isn’t yours or is in some way inaccurate, then you need to proceed with great caution in your letter because anything you say WILL be used against you.

I recommend you first check the SOL (Statute of Limitations) on the debt. Debts expire and if yours has, legally you cannot be sued. Yep, it’s true and everyday thousands of consumers pay old expired debts.

In your letter to the collection agency be sure to list your complaint, I.e, my debt is past the statute of limitations, the debt is not mine, the time allowed to place it on my credit reports has passed and so on.

Be specific and mention nothing about promising a payment if you dispute the debt. Doing so can renew the SOL on the debt all over again.

Do some research before you write any letters and be careful to review and research what you put in those letters to protect yourself. There’s a lot of information online about writing sample letters, researching expired debts and dealing with collection agencies.

Do research until you’re satisfied that you are handling the issue correctly.

Source

I was watching MSNBC today and they were talking about just how bad the credit crunch is going to get and that millions of Americans haven’t even begun to see the credit report issues until now.

People were so busy living off credit cards to pay their daily/monthly expenses that no one seemed to be worrying about their credit. After all, they had bigger fish to fry like mortgage payments and gas. Not that kind of gas, fuel!

In the United States, an individual’s credit history is compiled and maintained by companies called credit bureaus. Credit worthiness is usually determined through a statistical analysis of the available credit data. A common form of this analysis is a 3-digit credit score provided by independent financial service companies such as the FICO credit score.

An individual’s credit score, along with his or her credit report, affects his or her ability to borrow money through financial institutions such as banks.

The factors which may influence a person’s credit rating are

• ability to pay a loan
  interest
  amount of credit used
  spending patterns
  debt

Slow and steady we are seeing a rise in the number of consumers who are just now realizing the impact of the economy on their credit. From maxing out their credit cards to late paid mortgages, consumers are now starting to wonder what havoc it had on their personal credit reports.

When you are worried about the economy and your job, you don’t think much about your credit, until… you need it again. Now that consumers have gotten some breathing room with rate cuts and refi’s, they now see their credit reports and wonder what to do.

I’m sure millions of people who once had A+ credit now have F- credit. It was inevitable for many simply because inflation and the economy made it impossible to stay afloat.

Well, you can work on fixing your credit but be prepared to spend some time really researching the issue of credit repair.

It may  be a few late payments, over limit fees or more detrimental damage like a foreclosure or repo but… you can improve your credit over time. You have to find the courage to look at all three credit reports and then make a plan. A great resource for self help credit repair can be found here. For information on full service credit repair, go here.

When you’re looking for convenience, FreeCreditReport.com is pretty good. I’ve tried many different credit report sites, some out of business now, but FreeCreditReport has served up over 20 million customers and they’ve pretty much wired what the consumer wants.

They gives you access 24/7, they make it easy to order, they deliver all three credit reports in very consumer friendly formats and they give you the free credit scores.

I like all the tools they offer along with the product and I like being to log in quickly and easy and manage my credit reports.

Summer is a time where people buy new cars, boats, and rental property so if you’re getting ready for a purchase, check your credit BEFORE you apply for any loan to make sure everything looks good. One small problem and you can see your rates jump.

With credit card companies penalizing consumers more than ever before, you need to make sure your credit stays good. Otherwise you may see a rate jump as much as 9%.

Make sure you keep an eye on your credit score and pay everything on time so it doesn’t go down. Remember, getting your credit reports from FreeCreditReport.com does NOT add a hard inquiry to your credit, so it wont harm your score.

There is no one thing that will always improve your score. In general, there are several things you can do to increase or maintain your score.

•  Pay your bills on time  This is the single most important factor tied to having a good score.
•  Establish a credit history  Having a few debts is good, it shows that you can responsibly pay for items. Keeping those accounts open for  many years also helps ‘age’ your report.  Having an established credit history for 5 years is better than only having credit for 5 months.
•  Don’t take on too much debt  The more debt you owe the higher risk you are to future creditors.
• Get your FREE credit score and more!
  

Consumers are often overwhelmed by credit repair. The words alone send some consumers into denial. Most are afraid they’ll make their credit worse or they assume hiring someone to do it for them costs too much money.

That’s not always the case. With the advent of technology, streamlining credit repair is getting faster and better for consumers. About 10 years ago, it was a tedious process getting your credit reports to a credit repair agency and waiting for results.

Nowadays, it can be as easy as signing up online and sitting back waiting for the results. Don’t get me wrong, I think a lot of people have what it takes to do the task themselves but if you’re one of millions who find it overwhelming or simply don’t understand or have the time to fix your credit, then hiring a pro can be beneficial.

As always, as with any service, know who you are hiring. When seeking a credit repair company always look to their policy of refunds or guarantees. Make sure the company has a clean and clear BBB record (Better Business Bureau) and make a list of questions to ask before you sign up.

Once you’ve decided who you’ll hire then you can get on the road to better credit. Critics often say that credit repair is impossible. I don’t buy that at all. I’ve repaired many many credit reports. It’s possible and fortunately for us consumers, the bureaus and creditors make lots of mistakes.

I say make your credit the absolute best you can. Once you get there, keep it pristine.

A good source of FAQ about credit repair is DSI. Click here to read their FAQ on credit repair procedures, guarantees and more.

A “reverse” mortgage is a loan against your house that you do not have to pay back for as long as you live there.

With a reverse mortgage, you can turn the value of your home into cash without having to move or to repay the loan each month. The cash you get from a reverse mortgage can be paid to you in several ways:

Whether you’re looking for a lump sum loan or a cash line, a reverse mortgage can be ideal for seniors who live on a fixed income.

To qualify you must be 62 years old or older. You basically never have to pay it back until you sell the house or die. It’s a great way to get cash on hand out of your investment without having to take money out of your monthly income or hard earned savings.

Many seniors take advantage of this type of mortgage to help a grandchild through college or to travel in their golden years. Let’s face it, your house is supposed to be an asset to you so if you need cash what better way than using your hard earned asset.

Of course, just as with any loan, you’ll want to be careful of who you use and find a reputable broker or lender. A good resource to learn more about a reverse mortgage is AmeriTek Mortgage. They have a lot of information regarding the process and can make qualifying an easier task for seniors.

Learn more about AmeriTek Mortgages.