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Removing Erroneous Items on a Credit Report

marcus — Wed, 07 Jul 2010 16:40:31 +0000

On a recent credit profile review with a client, the client noticed a credit line entry for a credit card of which their balance was paid and the account closed. However, on the credit profile, the credit card showed a $93 balance and a perfect payment history leading up until the time in which they closed the account. We called the creditor together and representative insisted my client must pay the balance and suggested they accept the negative effects on their credit profile and move on with rebuilding their credit.

To correct this sort of error on the credit profile report, first gather and write up the history leading up to this event and collect evidence that supports your claims. Second, determine if your municipality has a consumer protection department. In some communities, exist government or non-profit sponsored groups that will act on its resident’s behalf in consumer affairs. If your area doesn’t have a consumer protection agency, then you will need to obtain an address of the creditor so that a formal dispute can be filed with the creditor. This dispute should also be copied to the credit bureau/s that are reporting the erroneous line entry. The Fair Credit Reporting Act allows consumers to dispute entries on their credit profiles, in writing. The law also states these disputes should be resolved within a reasonable amount of time, which is generally considered 30 days.

Credit card companies keep record of conversations and payment histories of each of its cardholders, if they do not then they will have a difficult time of countering your dispute claim. The bank may need to check their archive records to either backup their claims on credit reports or by law, they will need to remove the entry from your credit profile. Be patient and persevere as the credit company may not access their archives until after the 30 days and later have the negative credit mark re-entered on your credit report. So be sure to check your credit profile again over the next year, to ensure the entry doesn’t resurface.

Secured Credit Cards vs Unsecured Credit Cards

marcus — Wed, 23 Jun 2010 14:31:48 +0000

Obtaining a credit card is a great way to work at improving and strengthening your credit profile as long as you have the discipline and ability to make payments on time each month. However, building the necessary credit profile to be approved for one of these cards may be more of a challenge than its seemingly worth. I recommend that new-to-credit consumers obtain a secured credit card initially. This will be a great aid to any credit enhancement plan while not financially extending one past their affordability. The secured credit card works just like a regular credit card and has no limitations other than the credit limit. However, some see the getting a secured credit card as less of an impact on the credit profile as an unsecured card? An unsecured and secured credit card both have the same weight on ones credit profile as far as its usage and payment activities bearing on the credit score. However, oftentimes a secured credit card will have a minimum balance starting at $150, while a secured card will generally start at $500. It’s not the difference in card type but the difference in balance that has the impact on the credit scores. By simply adding more to the initial deposit to the secured card or by adding to that deposit the secured card will just as high an impact in building a solid credit profile.

The Real First Step to Credit Enhancement

marcus — Thu, 06 May 2010 17:15:48 +0000

I have a friend that has counseled with me several times on improving his credit profile. He has obtained all three credit reports directly from the bureaus. He’s identified the erroneous entries on his credit report, typed letters disputing those incorrect credit line items and has even created a feasible repayment plan to bring all his accounts current. However, after to listening to his impressive and extensive plan to enhance his credit, I reminded him that he has missed probably the largest hurdle to improving the credit portion of his personal finances. He had never bought his wife to our meetings and had never mentioned speaking with his spouse when considering repayment plans or discovering erroneous credit entries. After asking if he had spoken with his wife about his plans for his credit repair, he admitted he hadn’t because they didn’t share any credit accounts. And although a husband and wife have separate credit profiles, taking on a journey to improve a credit profile will affect spending and savings habits as well as these changes can cause an uncomfortable ripple through the household finances. Additionally, if the spouse is not on board with the credit enhancement plan then a financial fork in the road will be met by the couple at some time and “the talk” of which I think should preamble the credit repair plan, will be had in the middle of the journey. …talk about uncomfortable. Imagine trying to cut credit card use and Automated Teller Machine (ATM) withdrawals while your partner does all the shopping and never carries cash. Talk over any new financial plans with your significant other. If both adults involved are in agreement and working to compliment one another’s effort then success is much more likely.

Getting Back on Track

marcus — Wed, 03 Mar 2010 20:00:04 +0000

Well, it beginning of the 3rd month of the year and droves of people that promised to hit the gym and start a savings plan have decided to revert back to their old habits and abandon their New year’s resolutions until… next year. However, if you are reading this then you are still in the gym and serious about getting your personal finances in order. Well, the first thing to consider is where you stand right now. How much do you earn and to whom do you owe a portion of those earnings.add all those balances and monthly payments and write those figures down (we’ll come back to those numbers). But if you are like most, you cannot begin to imagine just how much you really owe and to whom you it. So the best two places to start is your mailbox and by requesting a credit report from each of the three major credit reporting bureaus (Equifax, Trans Union, Experian)
Don’t jump on the first free credit report offers you find. Many companies offer free credit reports, but then sign you to a monthly subscription commitment. And if you default on the monthly agreement or forget to cancel, they continue collection and ding your credit profile if you fail to satisfy your contract. Depending on the state in which you live, you may be entitled to one free report per year from each bureau. Go to the bureaus websites and explore the sites before signing up for anything….you may have to request the credit report by mail, but there’s more to do while you are waiting for your report in the mail (remember those numbers…we’ll get to them)
Be sure to review and compare the information from each of the 3 reports…yes, they do report different information. Discrepancies on your credit report should be disputed and documented with the reporting creditor. Make sure to maintain copious notes and meticulous records of any correspondence with creditors on all concerns and disputes…and request all resolutions “offered’ and/or ‘agreed upon’ in writing.

These credit reports will provide you access to your entire consumer debt history with an exception to living expenses…i.e. housing, utilities, food, clothing, et cetera. However, the credit report provides information you will use to gain a better idea of where you financially stand and which direction/s you should move first.

Tune in next time for “what to do with those numbers”

Second Chance to Improving Credit

marcus — Wed, 18 Nov 2009 18:38:35 +0000

Thinking like a creditor and understanding why they think the way they do, can be a real asset when improving one’s financial literacy. And when trying to improve a credit profile its important to know at what creditors are focusing. When creditors receive a credit report for a credit applicant, the first thing checked is the credit score. If the credit score is above the desired mark for the particular credit program then everyone’s happy. Scores above 700 are usually the desired mark for most creditors, however, scores lower than 700 do not cancel Christmas for most consumers and creditors alike. Credit can generally be achieved with scores as low as 580. There may…will be a risk assessment imposed and a higher interest rate factored in for scores lower than 680-700.

Oftentimes, when scores are not in a program’s most desirable ranges, creditors then look to two other areas, payment history and debt carried. Payment history gives the creditor an idea of your habits in regards to paying debts owed; however, total debt is the 2nd area of importance. Few consumers understand or even realize how much debt they actually possess. Creditors want to know the amount of debt to pre-determine stressed household budgets because of overloaded debt. Developing a plan to reduce overall debt will give a big boost to a credit score and reduce total money paid for purchases because of the reduction in interest payments spread over a shorter period of time. So making a creditor’s second look your priority can significantly enhance your credit profile.

Paying Your Credit Cards is No Longer Enough

marcus — Tue, 20 Oct 2009 12:43:25 +0000

Most people believe that paying their credit cards on time will prevent them from paying extra charges. However, card holders should double and thrice check their statements as many banks including Citibank are charging extra fees in the form of supplemental annual fees for instances such as a lack of transaction activity. (Remember if these fees aren’t paid tey will reflect as unpaid each month of a credit profile and slowly reduce one’s credit scores) Banks are preparing for the reduction in interest and fees they will be allowed to bill customers when the new credit card reform act comes into being in February 2010. Many banks are making these profitable fees up with new rules and guidelines. Financially literate credit card holders would be wise to read all correspondence from their issuing banks and to review statements for new or additional charges. In addition, an occasional call with the bank to question fees and inquire of discounts and offers is always a good idea. Make sure to maintain and record any agreements and changes in charges to your account for future reference should questions ever arise.

More Month than Monthly Pay?

marcus — Wed, 14 Oct 2009 12:30:20 +0000

Any unplanned and/or unaccounted for holiday can leave a month feeling a little “longer” for anyone living on a “month to month” budget. Particular attention should be given to the holiday months and the high expenditure amount associated with this time of the year. Typically, the time spanning from Thanksgiving to New Years place an unnecessary burden on household budgets yearly. Remember to pay month financial obligations prior to shopping for dinner parties and holidays gifts. Additionally, do not rely on holiday bonuses or overtime pay. As many employers are still reeling from the fallen economy, your personal finances should not rely on past performance of employers’ generous compensation practices during the holidays. By addressing financial obligations first and considering annual financial “surprises” a household can trust bank balances and control spending during the holidays. Just imagine…starting a new year with a positive bank balance and a lack for need of debt instruments to manage finances through the holidays will be a step in the direction of financial literacy and security.

How Credit Can Affect Employment Opportunities

marcus — Wed, 07 Oct 2009 12:30:03 +0000

The current unemployment rate is 9.8% And as the rate sits at its highest level in 25 years, economists expect the unemployment rate to surpass the 10% mark this year even as the economy improves. This essentially means that 10% of all non-military employed persons or persons actively seeking employment are out of work. Because of the bleek job market many former employees are leaving the labor force starting business. And as millions of unemployed Americans and new business owners search for the economic means to provide for themselves and their families, they are finding that credit is more important than ever. Small businesses need credit to build and supply their business until a profitable goal is achieved, but jobseekers are finding potential employers requiring a credit report review prior to hire.
Some points to consider on your credit profile when applying for employment are the credit report your possible future employer will see is different than the consumer credit reports. The credit profile accessed by employers does not reveal credit scores. Credit scores are only used for evaluation on requests for credit. However, delinquent accounts, collections and public records such as judgments and bankruptcies are seen and the employment applicant should be prepared to address any of these issues with the potential employer.
Request a free copy of your credit report and address any holders of judgments, collections, or delinquent accounts and attempt to develop a plan to either pay in full (or partially) the debt to satisfy the account. Request any payment agreements in writing and make sure to write copious notes whenever talking with representatives of any debt/collection companies, in case reference are needed to prove your efforts to correct any errors on your credit profile. Consider writing a statement to address any derogatory information and request your statement be placed on your credit report with the three major credit reporting bureaus. Most of all remember to review your credit profile regularly for errors and act quickly to correct any mistakes as you credit could be the key to your employment future employment.

Back to School on Personal Finances

marcus — Wed, 16 Sep 2009 13:00:00 +0000

Kids have returned to school and between supplies, clothes and books needed to help those little darlings learn as much as possible, now is also the perfect opportunity to educate your youth on some sound principles of personal finance.

Allow kids to view and tabulate receipts for some or all of the goods purchased for school.

Assist in creating a weekly or monthly budget for lunch payments or for the purchase of food items to prepare lunch at home.

Involve kids in the decision to pay more or less for a desired item as it relates to the risk of affordability of another item wanted/needed .

Allowing your kids to participate in the household finances is as imperative to financial literacy as exposing a budding swimmer to deep water. The budding financial literate must be able to experience the “feel” of participation to fully understand the ebbs and flows personal finance. And simple waiting until your kid gets to college is allowing the “new-ness” of independent college life to compete with the financial choices that will guide your child’s life into adulthood.

However, college kids, finances and credit cards do not have to be a nightmare. When it comes to credit card use and the college students, set usage guidelines and establish spending limits with the card issuer to request co-signers approval. Perform a monthly review of the statement with the student and offer congratulations and criticism where necessary.

6 Financial Exercises to Strengthen Your Credit Scores

marcus — Thu, 25 Jun 2009 04:08:32 +0000

Each summer millions of people rush to the gym to improve their health and physical image in preparation for fun times in the sun. However, what’s a great outer appearance if your financial stress is eating cutting years off your life expectancy? However, don’t give up your exercise regimen; just begin some simple but good financial exercises to sharpen your financial literacy quotient and improve your credit scores.

1. Read the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681. Reading the FCRA will give you a better understanding of your rights as a consumer and credit holder. In addition, the FCRA provides the acceptable procedures to inquire on issues concerning mistakes and inaccuracies on credit profiles with creditors and credit reporting bureaus.

2. Review your credit report for accuracy – The summer’s a great time to review your credit profile and report, especailly since over 70% of credit profiles contain errors. Check for any inaccuracies and dispute these mistakes found to the appropriate credit reporting bureaus immeidately. In addition, if late payments appear on the credit report that do not coincide with your budget records or check register, review your older statements for previously unnoticed late charges. Challenge any and all inconsistencies immediately, so that your credit profile is always portrayed accurately…you never know when you may need access to credit, but not have the time necessary to fix the reported inconsistencies.

3. Remember to keep the balances of revolving credit accounts below 40% of the available credit allowed by the creditor. Your credit scores are partially tabulated by the ratio of available credit to total debt. So if your credit balances are higher than your available credit, then your credit report will reflect a lower score. Carrying higher balances illustrates a higher need for credit to manage one’s finances and is a sign of poor debt management and financial planning. In addition, the summer time is a great excuse to “throw” something on the credit card, but remember the rule that if the price is too much to pay in cash, then it is probably too expensive to place on a credit card as well.

4. Create a summer budget that will allow you to happily experience your summer, eliminate debt and encourage saving. You know the vacation you want and the costs associated, so create a save and plan for the vacation, while maintaining your living expenses. Remember that there are seasons that will follow the summer and you don’t want to face them with a depressed budget and declining credit scores.

5. Pay all creditors before leaving for a vacation….whether the payments are due or not. Timely payments make up about 30% of one’s credit score. Vacations can offer a plethora of excuses why one should “go for it” on various expenditures and abandon budget boundaries. Imagine coming home from paradise to late-fee riddled, overdue credit statements because that para-sailing offer from your vacation guide was too good to turn down or the credit card statement arrived the day after you left for a 2 week vacation.

6. Place the gym membership on hold during the summer. It’s nice outside and there’s plenty to do to burn calories. With the membership savings, one could pay down the balance on a credit card on which the membership is billed and buy a fitness book on exercises done outside of a gym. In addition, don’t forget to place any monthly billed memberships on hold before going on vacation. If you’re not in town and unable to use these membership, then save that membership fee until you are back home and extend the expiration date.

With a little planning, pushing and pulling you can get yourself in great shape above and below the belt and enjoy your summer with good looks and peace of mind.