Sunday, March 27, 2011
Monday, March 21, 2011
Friday, March 18, 2011
Keep those collection Letters they are like Gold from my credit guy Ty Crandall
There are many laws that govern creditors. Collection companies are mainly governed by a law called the Fair Debt Collection Practices Act.
This law has MANY restrictions on what creditors can't do by law.
Some of these prohibited actions include threatening to garnish wages, calling you at work, calling you at odd hours, sending you mail with writing indicating there are a collection company, and many others.
You can see an article on this law Here.
Insure you keep all letters received by collection companies and keep a record of their phone calls. These letters and calls will reveal many of the collection companies' violations.
Those violations can then be used as leverage to FORCE the creditors to delete your negative items off your report.
This is referred to as Debt Validation, and is the MOST EFFECTIVE type of 100% Legal Credit Repair available.
Watch out though, there are only a few companies nationwide who do Debt Validation instead of just sending letters to the bureaus.
But make sure you save those letters and keep a record of those calls.
That information is like GOLD that can be used to drastically improve your credit profile.
Questions on credit repair and your Mortgage process feel free to call Mr.W ill from Jacksonville
This law has MANY restrictions on what creditors can't do by law.
Some of these prohibited actions include threatening to garnish wages, calling you at work, calling you at odd hours, sending you mail with writing indicating there are a collection company, and many others.
You can see an article on this law Here.
Insure you keep all letters received by collection companies and keep a record of their phone calls. These letters and calls will reveal many of the collection companies' violations.
Those violations can then be used as leverage to FORCE the creditors to delete your negative items off your report.
This is referred to as Debt Validation, and is the MOST EFFECTIVE type of 100% Legal Credit Repair available.
Watch out though, there are only a few companies nationwide who do Debt Validation instead of just sending letters to the bureaus.
But make sure you save those letters and keep a record of those calls.
That information is like GOLD that can be used to drastically improve your credit profile.
Questions on credit repair and your Mortgage process feel free to call Mr.W ill from Jacksonville
Tuesday, March 15, 2011
Thursday, March 10, 2011
Don't Be fooled on Collections on your credit report
Collection companies have done a great job over the years of convincing consumers that paying off collections will raise the credit scores.
You might be surprised to learn that paying off collections will actually LOWER your credit scores.
Collections are reported on your credit as an I9, or collection account. This means the account has already been "written off" and assigned to collections by the creditor.
Once an account is reported this way on the credit report, the damage to the credit scores is irreversible UNLESS that item is removed completely from the report.
If the account is paid off, the collection company only reports that the account now has a $0 balance, but they do NOT delete the item off the report.
The account has already become a collection, and your risk of defaulting on another account is already very high due to that collection.
So your credit score will NOT go any higher if it is paid off because paying off a collection after the fact doesn't lower your risk at all of defaulting in the future.
But what does happen is that the DATE OF LAST ACTIVITY is updated to the date you paid off the account. So if that account was sent to collections 3 years ago, the date of last activity is 3 years old and the impact to your credit score is not as much.
But if you pay off that collection today, you just update the date of last activity to today's date. The credit bureaus then read this as a recent account, and your scores go DOWN as a result.
Crazy isn't it? You just try to do the right thing and pay it off and they lower your scores as a result.
If you are going to pay off a collection, make sure you get a Pay To Delete letter. This means they agree to DELETE the item in return for your payment.
Or, hire a professional credit company to have the items deleted without having them paid off.
Most collection companies do break the law, and therefore many of those accounts are fairly easy to get deleted IF you work with a good company.
Have your collections deleted, and DON'T pay them off. Then you will have a healthy credit profile and healthy financial future.
You might be surprised to learn that paying off collections will actually LOWER your credit scores.
Collections are reported on your credit as an I9, or collection account. This means the account has already been "written off" and assigned to collections by the creditor.
Once an account is reported this way on the credit report, the damage to the credit scores is irreversible UNLESS that item is removed completely from the report.
If the account is paid off, the collection company only reports that the account now has a $0 balance, but they do NOT delete the item off the report.
The account has already become a collection, and your risk of defaulting on another account is already very high due to that collection.
So your credit score will NOT go any higher if it is paid off because paying off a collection after the fact doesn't lower your risk at all of defaulting in the future.
But what does happen is that the DATE OF LAST ACTIVITY is updated to the date you paid off the account. So if that account was sent to collections 3 years ago, the date of last activity is 3 years old and the impact to your credit score is not as much.
But if you pay off that collection today, you just update the date of last activity to today's date. The credit bureaus then read this as a recent account, and your scores go DOWN as a result.
Crazy isn't it? You just try to do the right thing and pay it off and they lower your scores as a result.
If you are going to pay off a collection, make sure you get a Pay To Delete letter. This means they agree to DELETE the item in return for your payment.
Or, hire a professional credit company to have the items deleted without having them paid off.
Most collection companies do break the law, and therefore many of those accounts are fairly easy to get deleted IF you work with a good company.
Have your collections deleted, and DON'T pay them off. Then you will have a healthy credit profile and healthy financial future.
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