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Posts Tagged ‘Equifax’

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. One excellent non-profit organization is the National Foundation for Debt Management (www.NFDM.org).

I’m sorry to hear that you are in a financial bind. But you’ve definitely taken the first step to turn things around financially, which is to recognize that you do indeed have a big problem. Maybe you were in denial in the past, or maybe your economic fortunes simply changed recently for some reason. Whatever the case, you seem to acknowledge that things can’t go on the way they have been. Not with you living $400 in the red each month.

If you’ve had a home for 22 years without missing any payments, I would hate to see you lose your house, so I hope you’re not talking about skipping payments on the home. Probably not. Since it sounds like you’ve reached out to your mortgage lender and received at least some support. I assume you are considering not paying other creditors, like credit card companies or perhaps your auto lender, that kind of thing.

I would suggest you take two steps. The first is to do an honest assessment and overhaul of your budget. Even if you get some relief from your creditors, it won’t do you any long term good if you are deficit spending. Go over your spending with a fine-tooth comb and see where you can cut back. Surely there are some areas/expenses you are willing to sacrifice or slash in order to keep your home, maintain your very good credit rating, and have financial peace of mind. Read this post about how to create a proper budget and this article on overhauling your budget too.

Additionally, before you simply stop paying creditors, contact each one directly and see what options, if any, might exist. Perhaps some of them are willing to put you on a deferred payment plan. You suggested in your email that a six-month reprieve from certain payments would give you some breathing room. Tell that to your creditors. If you make small token payments, that may show a “good faith” effort on your part, and it may keep bill collectors and creditors from hounding you. But those partial payments won’t necessarily stop creditors from reporting you to the credit bureaus. Anytime a debt is not paid as originally agreed, the creditor has the legal right to report that information to the major credit reporting agencies: Equifax, Experian and TransUnion.

If your creditors won’t offer any relief, and there’s nothing else in your budget to cut, yet you find yourself still in the red, then yes, it’s time to “cry Uncle.” At that point, I would make strategic decisions about what bills get paid first and which are second and third-tier obligations. See this TV interview in which I explain how to prioritize bills when you can’t afford to pay everything. Good luck!

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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:

www.investigate.equifax.com

www.Experian.com/disputes

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.

You should start by taking control of your finances and being honest about what is going on. You are the victim of identity theft, pure and simple. And it’s well past time you started letting others know that you did not authorize or open those utility accounts and that you are not responsible for them, period. End of story. Start monitoring your credit every month to make sure nothing else unexpected pops up there. Put a credit freeze and a credit alert on your credit reports to prevent further damage from this person who has blatantly taken advantage of you.

Lastly, you need to confront this person directly. It doesn’t matter if that person is a “close” family member. I don’t care if it’s your sister, a cousin – or even your mother. Let this individual know that they have totally crossed the line and damaged your finances and credit rating in a way that is completely unfair, disrespectful to you, and that has long-lasting implications. Tell the person that they have exactly 1 week to contact every creditor in which they used your name to cut off service in your name — and put it in their name.

If that person’s credit is bad (which I suspect it is) and they can’t get a phone, electric service or cable in their own name, that’s their issue to deal with; not yours. A week’s time is plenty of notice for them to take action. Tell them that if they don’t handle it in a week, you will be forced to contact those utilities directly and advise them of the situation. Hopefully, you will be stern and straight-forward enough in your approach to this person that he/she will know that you mean business. I’m not saying that you have to turn the person in (although they do deserve it). But neither should you be held continually responsible for someone else’s financial mess.

If the person doesn’t act quickly, and follow through as you’ve told them to do, don’t hesitate to get those services cut off. If push comes to shove, and you “have to” tell who the culprit is, I would go ahead and do it. Why would you go through unwarranted financial stress for this person when clearly they’ve shown you absolutely no personal or financial consideration whatsoever?

This debt should have long since fallen off your credit report. Under the Fair Credit Reporting Act, negative information such as the 90-day late payment you mentioned can only legally remain on your credit file for 7 years from the time of your delinquency. In your case, that would be seven years from the time you missed a payment or defaulted (i.e. November 1986). Because your debt is nearly 25 years old, it should definitely no longer appear on your Equifax, TransUnion or Experian credit files. If it does, simply initiate an online dispute with the credit bureuas and request that the credit account be removed on the grounds that this is outdated information. There is also a separate “Statute of Limitations” that doesn’t apply to your credit, but to the length of time after which a debt is no longer legally enforceable. After a debt, such as a credit card bill has run its statute, or expired, a creditor can no longer legally sue you in court, get a judgment against you, or do anything to pay you pay an old debt. In most states in America, the statute of limitations on old debts runs between 3 and 10 years. So again, from this standpoint too, that old debt should not cost you any money — or any worries.