Passive Credit Repair

When you’re dealing with debts and negative credit report entries, there are two time limits you should know – the statute of limitations on debt and the credit reporting time limit. Many people get these two time limits confused, but it’s important that you get them straight. One impacts you in a lawsuit and the other deals with negative information on your credit report.

Debt Statute of Limitations

Each state has a law that defines how long a creditor or collector can win a civil lawsuit for a debt that you allegedly owe. The time limit varies from state to state depending on the type of debt. For example, a credit card balance may have a different statute of limitations from an installment loan.

There are a few important things to know about the statute of limitations. First, the statute of limitations is like a stopwatch. The clock starts ticking on the last date of activity on an account. It can start over if you take certain action on an account, like making a payment or payment arrangement. In some states, even stating that the debt is yours can restart the statute of limitations.

The statute of limitations does not stop a creditor or collector from Read more…

As credit-wise consumers, we have been told over and over that we should never disclose our personal financial information to other individuals without good reason. Identity theft and credit scams are rampant and consumers need to practice discretion when it comes to their top secret personal information in order to protect themselves and their finances.

The Fair Credit Reporting Act was established to protect the private information of consumers by limiting who is allowed to access credit reports and conduct credit inquiries. In order to understand how the protection works, consumers need to understand who is and who isn’t allowed to review their personal credit profile.

Here is an outline of the accessibility of your credit report to others:

Credit Card Companies

Since credit card companies offer lines of credit to consumers, they have a right to determine the risk you may present for defaulting on your legal obligations. The credit card company uses your credit profile and score to calculate a rate of interest on the card before issuing you credit approval. By signing the credit card application, you give Read more…

If you have been turned down for financing, you typically had to remain in the dark as a consumer when the rejection letter came. Consumers have a right to request a free copy of their credit report after being denied financing but were essentially left to their own devices when it came to figuring out why they had their application turned down.

However, starting this week, the Dodd-Frank Financial Reform Act will change the way rejections work. A new rule is being implanted that requires lenders to explain in greater detail why a consumer received a denial. Lenders are now required to display credit score information used to make the rejection decision. Consumers will be able to see their credit score range as well as the credit history data that was used in the decision process. The rule also allows consumers to be told about the factors that contributed to the decision, including negative information that affected the consumer credit score. The lender must also disclose which credit reporting agency provided the information.

On July 21, the new Consumer Financial Protection Bureau will officially launch and will be responsible for enforcing the new rules. Consumers will now have Read more…

When the economy suffers a downtown, your credit, unfortunately, may suffer too. But this may be the worst possible time to have a bad credit score. If you find yourself back on the job market, you’ll often need to have good credit to land a job and keep paying your bills. In a recession or tough economy, take necessary precautions to keep your credit intact.

Build an emergency fund.

If you’re actively paying off debt by sending lump sum payments every month, you may want to scale back on those payments for a few months while you save up an emergency fund. An emergency fund can help keep you afloat for a few weeks or months if you suffer a pay cut or get laid off. But, if you’re really close to paying off your credit cards – like a couple of months – it’s okay to knock out those credit card bills. Then, once you’re done start up your emergency fund.

Call a credit counseling agency.

After suffering a job loss, you may not be able to afford your credit card payments. Get in touch with a credit counseling agency immediately. They can work with your creditors to lower your interest rate and minimum payment. Your credit card billing statement will have the number to a credit counseling agency. Otherwise, you can visit the National Foundation for Credit Counseling’s website, NFCC.org.

Get a forbearance or deferment on your loans.

When you can’t afford your loan payments, Read more…

Credit report disputes aren’t always successful. Sometimes you believe something shouldn’t appear on your report, but the bureau disagrees and continues to report the item you disputed. If you can’t get an item taken off your report, you can tell your side of the story.

Your Right to a Personal Statement

The Fair Credit Reporting Act, the law that covers credit report disputes, gives you the right to add a 100-word personal statement to your report. You can use this brief paragraph to explain why an entry is has been listed on the report. For example, a fraudulent account may have been reported in your name, but the bureaus refuse to remove it because the card issuer continues to say that it belongs to you. Your 100-word statement would explain the identity theft and state that you tried to dispute it but were unsuccessful.

Personal statements don’t necessarily have to explain errors on your report. They can also be used to explain why you fell behind on payments, e.g. a long period of unemployment or an injury. The personal statement can be used to explain that you aren’t a deadbeat and you have a legitimate reason for falling behind on your payments.

Make sure your personal statement doesn’t cast you in a bad light. You don’t want to say something like “I was young and didn’t realize late payments would affect me.” That type of statement probably won’t give the lender a good Read more…

In order for a small business to become financially successful, it has to be able to stand on its own two feet. While most businesses need to rely on the owner’s personal credit history and score before a business can be established, there must be a point of separation to ensure the stability of the business. If a business can not establish or repair its own line of credit, there is a chance the business will not succeed financially or otherwise. Bad credit can mean other vendors and companies will not want to conduct business with your small business. Your business credit must be trustworthy, especially in light of the current economy of the nation.

In order to develop and maintain good business credit, it is important for a business owner to make the effort to keep credit in good shape. Here are 4 of the basic rules for maintaining good business credit:

Take the Personal Out of Business
Once you make the decision to separate business finances from personal ones, it is essential for you to not look back. Keep records separate and utilize money in the same manner. Develop a solid system for keeping the business accounting of its own accord and not extending credit from the business for personal reasons. Doing so can either jeopardize your Read more…

Most consumers realize they have a credit score – a number that indicates whether you have good or bad credit. It’s a number creditors and lenders use to decide whether to approve your application and what interest rate to give you. But, there are several other scores businesses use that aren’t as publicized. Some of them are not even available for consumer use.

Behavior Score

Your credit card issuer has a wealth of information about your shopping habits and uses this information to determine just how risky of a borrower you are. Creditors may use your behavior score to determine your limit, to raise your interest rate, raise your annual fee, or cancel your credit card all together. Using your card at certain places, like pawn shops, can make you seem riskier.

Because card issuers don’t share the score, or the factors that influence the score, it’s impossible to raise your score. Cutting back on your plastic utilization used to share your behavior score can negatively affect you too – creditors may misinterpret the reason you’re using your credit card less.

Bankruptcy Score

Banks use your bankruptcy score to predict the likelihood that you’ll file bankruptcy in the near future. They may use your bankruptcy score to charge you higher Read more…

A divorce can not only be a painfully emotional time, it can also do a number on your credit rating forcing you to deal with financial hassles of credit repair in addition to the many other aspects of the process. While divorce proceedings do not directly harm your credit, the financial fallout from a contested divorce can damage it.

How Divorce Impacts Credit

Couples who marry typically combine and are jointly responsible for the various expenses and financial obligations obtained during the marriage. When a divorce is sought, couples often have issues dividing up those obligations and as a result some of the bills do not get paid. Whether the missed payments are done out of spite or simply due to the lack of funds, the scores of both parts of the former couple will suffer as a result.

Late or missed payments on your mortgage, credit card bills, or other financial obligations can drop your score by a lot of the financial trouble is long-term. Additionally, the black marks on your credit history will remain with you for 7-10 years Read more…

As a parent, you may choose to provide financially for you children even after they have turned of legal age and accountable for their own finances. However, it is important to realize that while your gestures may be nice, the fallout from the gesture can do your credit score serious damage. You will then need to repair your credit if you wish to continue keeping a solid score for your own financial well-being.

Why Lend Your Credit

Many young adults lack the financial history necessary to get credit. It is a Catch-22 situation and in some cases, parents agree to step in and co-sign for credit cards, car loans, or student loans. Parents typically do not agree to pay the monthly note but as a cosigner on a financial obligation, the parents ultimately become responsible whenever a payment has been missed. By the time a late payment has gone overdue, many parents will find their score has already dropped and their credit history has been affected.

While young adults may lack credit experience, it may not always be a wise idea for parents to Read more…

The PLUS Score may be an unfamiliar term for many consumers but it can be an integral part of repairing your credit and improving your knowledge as to how make your credit work for you. Experian, the consumer credit reporting agency, created the PLUS Score as a way to help consumers better understand how to manage and repair their credit scores.

The PLUS Score is consumer-friendly credit score that was created by Experian to help consumers understand what is having an impact on their present credit score. It PLUS model also provides detailed information about what consumers need to do in order to see their credit scores increase.

How PLUS Score Works

The PLUS Score is calculated from the data on an Experian credit report. The calculation is relative to the methods utilized by lenders when making credit decisions. The PLUS Score ranges from 330 to 830. Much like a traditional credit score, the higher a consumer PLUS Score is, the less of a credit risk they pose to lenders. While most creditors will pull a consumer’s FICO score when making decisions, the PLUS score can be Read more…