Ask The Money Coach

Posts Tagged ‘credit reports’

Q: I Have Three Credit Cards and My Combined Monthly Payments are About $700. Is it Wise to Consolidate Through a Debt Management Agency? Will This Affect My Credit Score?

A: If you’re having trouble paying your bills on your own, yes, a debt management company can help. And contrary to popular opinion, simply enrolling in a debt management plan does not impact your credit score. Read this article on the differences between debt management and debt settlement companies, and learn why I strongly recommend debt management firms.

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• Fact Versus Fiction About Credit Scores (askamoneyexpert.com)

Q: I Have a Credit Score of 625 and Am Trying to Refinance a Loan. The Bank Says My Credit Score Must Be a 700 to Get a Loan With Them. I Have an Existing Loan and When I Got it 4 Years Ago, My Score Was About a 710. I Need to Fix My Credit Soon Because My Loan is a Balloon Loan (That Comes Due) In About a Year. How Can I Clean Up My Credit Quickly?

A: The two absolute fastest ways to significantly boost your credit scores both involve getting negative information deleted from your credit files. If you have anything negative on your Equifax, Experian or TransUnion reports that is outdated, inaccurate or that can’t be verified, try contesting that information directly with the credit bureaus. Use their online credit dispute services for the fastest possible results. I’ve disputed information online and had erroneous information removed in just a day or two. Here are the direct websites for the credit bureaus to initiate an online dispute:

http://www.investigate.equifax.com
http://www.Experian.com/disputes
http://www.Transunion.com/investigate

Additionally, since you are trying to get a mortgage, you can utilize a service known as “rapid re-scoring” also known as “credit re-scoring.” Read this post about rapid re-scoring to learn how to get errors removed from your credit report in just 48 hours.

There’s no guarantee that either of these methods will boost your credit score by the 75 points you are seeking, but it’s certainly worth a shot. And if there is negative information that gets removed, you will likely experience some boost to your FICO scores.

However, if there are no mistakes to dispute, trying paying off some or all of your credit card debt. That will usually improve your credit scores. Even though it may be a hardship to come up with the money to pay off credit card bills, it’s helpful to become debt-free. Not to mention the short-and long-term savings it will net you from snagging that better loan when you are able to refinance.

For more tips on how to improve your credit score, pick up a copy of Perfect Credit: 7 Steps To A Great Credit Rating

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Q: If I Dispute Something on My Credit Report That I Feel Is Not Legit Will It Re-Start the Time on the Debt? I Have a Debt That Will Drop Off in Another Year and I Want to Dispute It But I Don’t Want to Restart the Clock on the Debt. Should I Dispute It or Leave It Alone?

A: Disputing a debt with the credit bureaus will not restart the clock on the debt. Therefore, if you feel the debt is not legitimate, I would encourage you to contact Equifax, Experian and TransUnion to get the debt removed from your credit files. After you initiate a dispute, the credit bureaus have 30 days to reply to your request. Any information that is outdated, inaccurate or that can’t be verified must be removed, in accordance with the Fair Credit Reporting
Act.

The best way to dispute a debt – and to have it quickly removed from your credit reports – is to do an online dispute.

Use these websites to reach the credit reporting agencies and dispute errors:

http://www.investigate.equifax.com

http://www.Experian.com/disputes

http://www.Transunion.com/investigate

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Q: I Filed a Chapter 7 in 2001. I Have a Couple of Other Things on My Credit. Where Do I Need to Start to Get My Credit On the Right Road?

A: A Chapter 7 Bankruptcy filing from 9 years ago is still on your credit records and thus impacts your credit rating. But frankly, it should have a limited overall impact on your credit ranking, given the long-ago time frame of your bankruptcy. Fortunately in another year or so, that bankruptcy will be dropped from your credit reports. In the meantime, the best thing you can do is to focus on paying all your bills on time and trying to clean up those other things on your credit you mentioned. If you have fairly recently collection accounts or late payments (i.e. within the past two years), try to bring them up to date. Reduce your credit card debt (if any) because that will almost certainly boost your credit score. Also consider getting a secured credit card, if you’re not able to get a regular credit card. That secured card is a good way to rebuild credit after you’ve had credit problems in the past.

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Q: I Have a Recent Outstanding Debt on My Credit Report. When I Settle It, Can The Collection Agency State As Part of Their Negotiation that They Will Also Remove It From My Credit Report?

A: If you agree to a settlement with an original creditor or with a collection agency, they can do anything they want in terms of keeping information on your credit report, or deleting that information from your credit files. Collection agencies almost always try to claim that they “can’t legally” delete negative data from your credit records. That’s hogwash. You’ll have to push for this in your negotiations. But there’s no law that prevents them from deleting
negative marks from your credit files. Get an agreement in writing upfront before you agree to a settlement. Again, a collection agency may say: “We don’t write agreement letters.” So you may have to write it yourself, submit it to them, and secure a signature from a representative at the collection agency. And Yes, and email or a fax can count as in writing. With a fax, just spell out the terms of the agreement and get the person’s signature. With an email, document your agreement and then ask the person to give you a reply email confirming the terms you’ve outlined.

Regarding the debt also appearing on your wife’s credit report, yes, it’s possible that that can occur and it could be perfectly legal. For instance, if your wife was a co-signer or authorized user on the account, the debt may show up on her credit report. Also, depending on the type of debt in question, she may be legally held responsible for your debts — particularly since you are in California, a community property state. Read this article for more tips on how to keep, for example, a spouse’s medical debt from impacting you and your credit.

Lastly, If you settle an old debt, the collection agency should agree to delete the negative information from both of your credit reports.

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