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Your Rights Regarding Credit Repair

Jumat, 30 Maret 2012



No one can legally remove accurate and timely negative information from a credit report. The law allows you to ask for an investigation of information in your file that you dispute as inaccurate or incomplete. There is no charge for this. Some people hire a company to investigate on their behalf, but anything a credit repair clinic can do legally, you can do for yourself at little or no cost. According to the Fair Credit Reporting Act (FCRA):

    You’re entitled to a free report if a company takes “adverse action” against you, like denying your application for credit, insurance, or employment. You have to ask for your report within 60 days of receiving notice of the action. The notice will give you the name, address, and phone number of the consumer reporting company. You’re also entitled to one free report a year if you’re unemployed and plan to look for a job within 60 days; if you’re on welfare; or if your report is inaccurate because of fraud, including identity theft.
    Each of the nationwide consumer reporting companies — Equifax, Experian, and TransUnion — is required to provide you with a free copy of your credit report once every 12 months, if you ask for it. The three companies have a central website, a toll-free telephone number, and a mailing address for consumers to order the free annual credit reports the government entitles them to. To order, click on annualcreditreport.com, call 1-877-322-8228, or complete the Annual Credit Report Request Form and mail it to:

        Annual Credit Report Request Service
        P.O. Box 105281
        Atlanta, GA 30348-5281

    You can use the form in this brochure, or you can print it from ftc.gov/credit. You may order reports from each of the three consumer reporting companies at the same time, or you can stagger your requests, ordering one from each company throughout the year from the central address. Don’t contact the three nationwide consumer reporting companies individually or at another address because you may end up paying for a report that you’re entitled to get for free. In fact, each consumer reporting company may charge you up to $10.50 to purchase an additional copy of your report within a 12-month period.

    It doesn’t cost anything to dispute mistakes or outdated items on your credit report. Under the FCRA, both the consumer reporting company and the information provider (that is, the person, company, or organization that provides information about you to a consumer reporting company) are responsible for correcting inaccurate or incomplete information in your report. To take advantage of all your rights under the FCRA, contact the consumer reporting company and the information provider.
READ MORE - Your Rights Regarding Credit Repair

Recognizing a Credit Repair Scam

Kamis, 29 Maret 2012



Everyday, companies target consumers who have poor credit histories with promises to clean up their credit report so they can get a car loan, a home mortgage, insurance, or even a job once they pay them a fee for the service. The truth is, these companies can’t deliver an improved credit report for you using the tactics they promote. It’s illegal: No one can remove accurate negative information from your credit report. So after you pay them hundreds or thousands of dollars in fees, you’re left with the same credit report and someone else has your money.

If you see a credit repair offer, here’s how to tell if the company behind it is up to no good:

    The company wants you to pay for credit repair services before they provide any services. Under the Credit Repair Organizations Act, credit repair companies cannot require you to pay until they have completed the services they have promised.
    The company doesn’t tell you your rights and what you can do for yourself for free.
    The company recommends that you do not contact any of the three major national credit reporting companies directly.
    The company tells you they can get rid of most or all the negative credit information in your credit report, even if that information is accurate and current.
    The company suggests that you try to invent a “new” credit identity — and then, a new credit report — by applying for an Employer Identification Number to use instead of your Social Security number.
    The company advises you to dispute all the information in your credit report, regardless of its accuracy or timeliness.

If you follow illegal advice and commit fraud, you may find yourself in legal hot water, too: It’s a federal crime to lie on a loan or credit application, to misrepresent your Social Security number, and to obtain an Employer Identification Number from the Internal Revenue Service under false pretenses. You could be charged and prosecuted for mail or wire fraud if you use the mail, telephone, or Internet to apply for credit and provide false information
READ MORE - Recognizing a Credit Repair Scam

How to Dispute Credit Report Errors

Selasa, 27 Maret 2012

Credit reports are extremely important for adults who plan to get a credit card, apply for a job, buy a house, have utilities turned on, or a host of other activities. Each month, your creditors and lenders send details about your account to at least one of the three major credit bureaus – Equifax, Experian, and TransUnion.

It’s very common for credit reports to contain errors. Anything from inaccurate late payments to accounts that aren’t yours or maybe even a falsely reported bankruptcy could mistakenly end up on your credit report. Because so many businesses use your credit report to make decisions about you. It’s important that your credit report is accurate.

Federal law gives you the right to an accurate credit report. Credit bureaus aren’t allowed to report anything that’s inaccurate, incomplete, or unverifiable. Thanks to that provision in the Fair Credit Reporting Act, you have the right to dispute errors to have them removed from your credit report.
First Check Your Credit Report for Errors

The best way to find credit report errors is to check a copy of your credit report. There are several ways to do this – even for free. First, you can get a free annual credit report from each bureau once a year through AnnualCreditReport.com. Secondly, you’re entitled to a free credit report if you’ve recently been turned down because of your credit report, if you’re unemployed and planning to look for a job soon, you receive welfare or government assistance, or if you’ve been a victim of identity theft. Finally, some states have laws entitling you to a free credit report each year in addition to the free credit report you get through other sources.

If you can’t get a free credit report, you can order one through the credit bureaus directly for $10 to $20 depending on the bureau.

You should review all three of your credit reports because they’re not necessarily identical. It can be overwhelming to do this all at once, so you might work on one credit report per month or quarter.

Once you have your credit reports, take some time to look through them and highlight the items to include in your credit report dispute.
Note The Items That Can Be Disputed

Technically, you can dispute anything, but note the credit bureau will do an investigation and only delete items that law requires them to delete. You can dispute credit report items that are inaccurate, incomplete, out of date, or that you believe cannot be verified. Negative items, except bankruptcy, should only appear on your credit report for seven years – bankruptcy can remain for ten. If you have negative entries older than seven years, you can dispute them. Other things you can dispute include:

    Payments reported late that were actually on time
    Accounts that aren’t yours
    Inaccurate credit limit/loan amount or account balance
    Inaccurate creditor
    Inaccurate account status, for example an account status reported as past due when the account is actually current

Decide Which of Three Ways You Want to Make Your Dispute

You can place your credit report dispute online, by mail, or over the phone. To dispute online or by phone, you need to have ordered a copy of your credit report within the past month – you’ll need to provide your credit report number.

While disputing credit report errors online is convenient, there are some drawbacks. When you dispute online, you can only get the results of your dispute online. If you dispute online, you can also check the status of your dispute online by providing your confirmation number, but you can only get the results online, not by mail. And you’ll still have to mail in any documentation or proof that supports your dispute.

Should you decide to dispute your credit report online, here are links to the major credit bureau pages for submitting an online credit report dispute:

    TransUnion
    Experian
    Equifax

Making a credit report dispute by mail takes more time, but gives you the paper trail you’d need if the credit bureau doesn’t respond in a timely manner. Credit bureaus have 30 days to investigate and respond to your credit report dispute, or 45 days if you send additional proof during the investigation period. If they don’t respond in that time frame, you have the right to sue in Federal court for up to $1,000.

When you dispute via mail, you should write a letter explaining the information that should be removed and include the reason that detail is inaccurate. Also include proof of the error if you have it. Send the letter via certified mail with return receipt requested so you have proof of when you made the dispute and when the creditor receives it. Make sure you keep track of the time that’s passed.
Wait for the Credit Bureau Response to Your Credit Report Dispute

The credit bureau may respond to your dispute by immediately deleting the information you’ve disputed. However, they have the right to reinsert previously deleted items if those items are later verified. The credit bureau has to notify you, in writing, that the item has been put back on your credit report.

The credit bureau has 30 days to investigate your dispute and respond to you, in writing, with the results of the investigation. Any data you provided about the inaccuracy of the information will be forwarded to the original information provider. The information provider is then required to investigate and respond back to the credit bureau.

Once the investigation is complete, the credit bureau will provide you with the results, along with a free copy of your credit report if the dispute resulted in a change. You can request that the credit bureau send a correction notice to any company that accessed your credit report within the past six months.

If there is inaccurate information in one credit bureau's version of your credit report, it's likely that the information will be inaccurate on the other two bureaus' reports as well. You should check all three credit reports to be sure that the information in each is complete and accurate.
Types of Proof to Send With Your Credit Report Dispute

You’ll need to submit proof if there’s something wrong with your address, name, date of birth, or your social security number. You can send a copy of your driver’s license, recent billing statement, or your social security card to solve these issues. Proof might also be a cancelled check showing that you paid your bill on time. Or a recent billing statement showing your credit card limit or balance. Make sure you send a copy of the proof and keep the original documents for your files.

If you send the additional proof after you've already sent the dispute, the credit bureau has 45 days, instead of 30, to respond to your dispute.
Hardest Things to Remove From Your Credit Report

Some things are easier to remove from your credit report than others because these items are easier to verify and less likely to be erroneous. Items that are a matter of public record are more difficult to remove. This includes bankruptcy, foreclosure, repossession, lawsuit judgments, and loan default (especially student loan default). Sometimes it’s hard to get these removed even when they’re legitimately inaccurate.

If you have inaccurate public records on your credit report, try to work directly with the court or agency that has the item listed on your credit report. Once they’ve updated their records to show what’s accurate, it will be much easier to work with the credit bureau to clear up your credit report. Creditors and other businesses that report to the credit bureaus have the same obligation to investigate and clear up credit report errors. So, if the credit bureau is being stubborn, go straight to the source and dispute with the creditor.
Make Sure Your Disputes Are Legitimate

Be sure you don’t do anything to make the credit bureaus think your credit report disputes are frivolous. For example, don’t dispute everything on your credit report and definitely don’t send all your disputes at once. If you dispute the same item more than one time, you should give a different reason for each dispute, so the credit bureau won’t think you’re sending duplicates. The credit bureau has the right to deem your disputes frivolous and if that happens, the bureau also has the right to reject your dispute.
READ MORE - How to Dispute Credit Report Errors

5 Things to Know About Your Financial Aid Package

Jumat, 23 Maret 2012

You've received your financial aid award letter for the upcoming academic year. Amidst all of the financial aid terms and figures, there is some important information that may not be explicitly mentioned but that is good to know.

1. You can -- and should -- shop around for loans. Just because your financial aid office gave you a student loan from Company A doesn't mean you can't get a loan from Company B instead. Shop around -- at your bank, at other lenders your school works with, at the credit union your folks may belong to -- to find the best interest rate possible. It could end up saving you hundreds, if not thousands, of dollars later.

2. Know that your financial aid package is negotiable. Yup, that's right. You're not "stuck" with whatever your school gives you. If you are a first-year student trying to decide where to go, use your financial aid offer from College A to get a better deal at College B. A school can sometimes match another school's offer if they have the available funds and want you to come badly enough. Additionally, if you feel like the package you've been given is from a formula and doesn't, for example, take into account the high medical bills your family has, make an appointment with a counselor to see what they can do for you.

3. Your school may increase your financial aid the longer you attend. A high number of students transfer or drop out of college during their first or second years. Consequently, if you've stayed at your school for two or three years, the financial aid office may be willing to "invest" more in you because they know you are statistically more likely to stay than an incoming first-year student.

4. Be on good terms with the financial aid office staff. Think about it: every time you walk in, they are super busy and trying to work with a lot of students requesting a lot of different things. They work hard at a hard job. Consequently, yelling at a financial aid staff member isn't going to help you any. Finances can be touchy for a lot of people, so make sure to remain polite and respectful of the people who work all day trying to make sure you can stay in school.

5. If you have an emergency, the financial aid office can be a great resource. Short several hundred dollars for rent at the end of the semester? Have to fly home for a family emergency, but don't have the money in your budget? Check with the financial aid office about what they can do. Some schools have emergency funds available for students in emergency situations. And even if they don't, they can point you in the right direction so that an unexpected financial bump doesn't turn into a decision to withdraw.
READ MORE - 5 Things to Know About Your Financial Aid Package

adverse action notice definition

Selasa, 20 Maret 2012

An adverse action notice is a letter sent after you've had an application - credit, loan, insurance, employment, etc. - denied. If you were denied because of information in your credit report, the Fair Credit Reporting Act (FCRA) requires creditors, lenders, and other businesses to send an adverse action notice letting you know the reason(s) you were you were denied and the name, address, and phone number of the credit bureau who provided the credit report. The adverse action notice can be oral, by phone, or in writing and must be sent in a "reasonable" amount of time.

The credit-based adverse action notice must include a statement letting you know you can obtain your credit report free from the agency listed in the notice within 60 days. The notice will also state that the credit bureau wasn't involved in the decision and that the bureau can't tell you why your application was denied. (Those reasons will be listed in the notice.) Finally, the adverse action notice will include a disclosure of your right to dispute inaccurate or incomplete credit report information.

If you had a credit card or loan application denied, but not because of information on your credit report, you'll still receive an adverse action notice. This adverse action notice will also list the specific reason(s) your application was denied, but won't include the name of a credit bureau or allow you to receive a free credit report. There will be an Equal Credit Opportunity Act (ECOA) notice at the end of this adverse action stating it's illegal to deny your application based on race, color, religion, national origin, sex, marital status, age (as long as you're old enough to sign a contract), participation in public assistance program, or exercising your Consumer Credit Protection Act rights.
READ MORE - adverse action notice definition

Student Credit Cards -- What You Need to Know

Jumat, 16 Maret 2012

The moment a college student arrives on campus, he or she is bombarded with credit card offers. Advertisements for student credit cards are everywhere: in bags at the bookstore, in the campus newspaper, in your regular mailbox, in the residence halls.

With so many college students graduating with large amounts of credit card debt (figures vary, but most are at least in the thousands), learning how to manage a student credit card can be an important lesson for any student. While using a card wisely can be an important part of building credit and making it through a difficult time, knowing how to use a card wisely can be the hard part.
When to Use a Student Credit Card in College

Stick to the following rules when, and if, you need to use a credit card:

    You can repay the charge(s) within the card's next billing cycle. (For example, you need books this week but your loan check doesn't come in until next week.)
    You must meet your basic needs, like food / clothing / shelter, but set rules and be aware that you will need to repay those charges at the end of the month.
    You hit an unexpected problem that will keep you from staying in school, like a major car repair if you commute to campus. However, challenge yourself to think of alternatives: can you take the bus or carpool? Also keep in mind that many schools have funds set aside especially for students who are in "emergency" situations. Talk to your financial aid office as soon as possible if you think this applies to you.

When NOT to Use a Student Credit Card in College

Using a credit card while in school can be so easy -- and much more trouble that it's worth. Don't use a credit card if:

    The charge is not in your budget.
    You won't have the money to pay off the balance at the end of the month.
    The item / service you are buying is a want instead of a need. (Do you really need that new jacket? Or just want it?)
    You are buying an item / service you already have, like a gym membership, item of clothing, meals (if you have a meal plan on campus), or new cell phone when your old one still works fine.

What to Know About Student Credit Card Use in College

If you do want a credit card, just be smart about it. (They let you in to that school because of your brain, right?) Don't automatically get the first one you find. Shop around for a card that has the lowest interest rate possible, and consider places that may not be advertising on campus (like a local credit union). Additionally, be aware of any card's repayment options: When will payments be due? How much will they be? A credit card is not like a loan that comes with a grace period after you graduate and waits until you are done with school. That new sweater and nice dinner out will need to be paid back right away.
READ MORE - Student Credit Cards -- What You Need to Know

12 Reasons Your Credit Card Application Was Denied

Kamis, 01 Maret 2012

If you’ve had a credit card application denied, you’re probably wondering why. The credit card company rarely tells you on the spot just why your credit card application was denied. Instead, they send an adverse action letter within 7-10 business days of your application. The adverse action letter will give you the specific reason your credit card application was denied. While you’re waiting to get your letter, here are some possible reasons your credit card application could be denied.

1. You didn't completely fill out the application.

If your application is missing vital information, you risk being denied. The good thing about most online credit card applications is that they often won’t let you submit the application until it’s complete. That way, you eliminate the risk of having your credit card application denied because it wasn’t complete.

2. You're not old enough to get a credit card.

If you’re under age 18, you’ll probably have your credit card application denied. There are some exceptions, for example, if you’ve already been added as an authorized user to your parents’ credit card. Even young adults under 21 can be denied if they don’t have income or a co-signer.

3. Your income is too low.
Income limits vary by credit card issuer. You could have your credit card application denied if you don’t make enough money for that credit card. Seldom do credit card issuers publish minimum income requirements for their credit cards, so it’s up to you to estimate which credit cards fit your income.

4. You haven't been at your current job long enough.
An unstable work history could have your credit card application denied. Credit card issuers like applicants who have been on their job consistently. If you’ve been job-hopping and have periods of unemployment, you may have a hard time getting approved for a credit card.

5. You have a thin file or limited credit history.

Having little or no experience with credit could result in a denied credit card application. If you don’t have at least one account that’s been active in the past six months, FICO can’t generate a credit score for you. Without a credit score, the credit card company can’t approve your application.

6. You have a recent collection or public record.
As time goes on, collections and public records affect your credit less. However, when these negative items first appear on your credit report, they hurt your credit score most. These serious delinquencies are a sign to the credit card company that you don’t have enough money to meet your financial obligations.

7. You have a charge-off on your credit report.

A charge-off is a credit card balance that went unpaid for six months or more. It’s one of the worst things that can appear on your credit report. Honestly, if you failed to pay another credit card, a new credit card company will hesitate to give you a credit card. Paying the charged-off balance will improve your chances at getting approved.

8. Your last delinquency was too recent.
Credit card issuers not only look at the type of delinquency, they also consider how long it’s been since you were last delinquent. A 90-day late payment from six years ago won’t hurt as badly as one from six months ago

9. There are too many inquiries on your credit report.
Applying for too many credit cards and loans within a short period of time can get your credit card application denied, regardless of whether you’re approved for the other credit cards. Keep your inquiries to a minimum to improve your chances at getting your credit card application approved.

10. You have too many credit cards.
The number of credit cards you have can influence whether your credit card application is denied. There’s no universal number that applies to all credit card applications. Instead, it varies by credit card issuer.

11. Your loan balances are too high.
If you haven’t been lowering your loan balances, credit card issuers are hesitant to give you a credit card. You may not pay that off either. Before you apply for a credit card, pay off some of your existing loan balances.

12. Your credit card balances are too high.
Credit card companies want to see that you’re only using a portion of the credit that’s available to you. If you’re using too much of your available credit, especially if you’re maxed out, you can count on having your credit card application denied.
READ MORE - 12 Reasons Your Credit Card Application Was Denied

 
 
 

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