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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.

Calculating Your Personal Finances

marcus — Thu, 29 Apr 2010 12:27:46 +0000

You have a tri-merged credit report and gathered any collection letters in your hand. You are now on your way to the easiest part of regaining control of your personal finances. First, we need to understand what percentage of your income (take home pay after taxes and deductions) is owed out each month. Divide each debt by your take home pay and you will reveal the percentage of your money that is being used each month for the individual debt.

Example:
Monthly Income – $2,400
Monthly Housing Payment – $975 975/2400 = 41%
Monthly Auto Payment – $245 245/2400 = 10%
Monthly Credit Cards – $125 125/2400 = 5%

Idealistically, your entire monthly debts should not equal more than 50-70% of your monthly take home pay. If you are living outside of that percentage area…lower is great, but on the higher side…then you are running the risk of financial collapse should you or the economy ever stumble again….and it will stumble again If your numbers mirror the above example then its time to get the red pen out and contact your creditors to negotiate a new lower payment. Base your requesting the reduced payment on the percentages and record their exact responses and remember to get any offers they extend in writing. And lastly, do not make any decision to pay one group without reviewing the totality of your new financial recovery plan. Its a good idea to start allowing an overnight time period before making financial decisions.

Next time, we will further discuss the conversation and the follow up with your contact with creditors, so you can begin feeling the effects of a recovering personal finance plan.

Credit Card Fees For Non-Usage

marcus — Wed, 13 Jan 2010 03:07:44 +0000

Credit card companies are full of surprises this year. With new consumer protection – credit card laws starting this year, many credit card companies are already changing fee policies to make up for the consumer protections the banking industry perceives as revenue decreasing. Don’t be tempted by lower rate offer without reading the entire agreement. Sometimes these lower rates carry a minimum usage clause, which require a certain dollar activity during a given period. Some credit card companies are now placing fees on accounts for non-usage or for not meeting a minimum dollar amount of activity per year. Make sure to open mail from credit cards and read the contents carefully. Part of the new law now mandates credit card companies to inform consumers with more advance, however, if the notice aren’t read the new protections would be useless.

New Credit Card Laws Coming Soon

marcus — Thu, 17 Dec 2009 12:30:43 +0000

An important rule to becoming financially literate, don’t ignore your finances. This coming new year, new laws will take effect on the time limit and notification policies placed on credit card companies providing information on any changes to terms or rates to your account. Many of these notifications will require the card holder to decide on various options offered by the card issuer. Ignoring these notices can and will bring about unfortunate and expensive surprises on your credit card statements and at the atm.

Reclaiming Your Finances

marcus — Thu, 03 Dec 2009 01:44:15 +0000

If you are like millons of Americans you are seeing the glimmers of evidence that the economy is turning around. The three years the nation has suffered under the failing economy has tested the financial planning abilites of most households. However, as you face your future and decide upon financial directions to travel, remember the number one rule of reclaiming your finances….address your issues head on. Call your creditors and at the very least, acknowledge them and try to design a debt management workout plan. Its best to consult with an attorney on the possibilties and consequences of bankruptcy, but ignoring your debts could lead to future financial stumbling blocks. Stumbling blocks such as law suits that could lead to judgements, garnishments of bank accounts or income. Oftentimes these garnishments come “without” warning until after lein have been placed on assets…however, the real warning is coming right now. If you owe…don’t simply think that these debts will just somehow fix themselves…you have to act.

Holiday Financial Fitness

marcus — Tue, 24 Nov 2009 17:58:51 +0000

No time of the year can be more detrimental to one’s personal finances than the next 6 weeks of holiday celebrating and shopping. Between, shopping for gifts, preparing large meals, entertaining and friendly gatherings, a household budget can become strained and cause people to rely on credit cards, savings and even expensive payday (or auto title) loans. Many employers pay employees early during the holiday season so future income can be used to manage the increased expenses that accompany holiday preparations. However, households need to adhere to financial plans and their holiday budget…you should have a budget for holiday shopping…a holiday budget can help prevent the “too good to be true” moments in shopping and picking up the tab after running into the old friend at the bar. Don’t get caught in the trap of using too much of your early holiday pay before the month ends. This could lead to a shortage of available cash to carry your personal finances into December. And remember gift giving month of December is notorious for robbing households of the gift of financial stability.

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.