Worried Man
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           Many people due to unforeseen circumstances or financial mismanagement have had adverse actions reported on their credit report.  Your credit rating says to anyone looking extend you credit what your credit worthiness is at that time.  The Fair Isaac Corporation has the most recognized credit score called the FICO score.  This score means the difference between getting credit and being denied credit.

            In the age of technology this credit score and information has hurt a lot of people looking for jobs as well.  Many states allow your credit report to be reviewed as a part of the hiring process.  This means that if you have some derogatory information reporting on your credit report, it may eliminate you from potentially finding work.  Your credit score also helps you to save money.  The better the score the lower the interest rates that you will receive when the need to borrow money or make large purchases arise.  This leaves more money for you and your family.

            There is nothing that a credit repair organization can do for you for 100’s of dollars that you cannot do yourself for free.  Save your money by taking out the time to do it yourself.  This will not only keep money in your pocket but empower you to take responsibility for yourself.  Below we will discuss how to improve your credit.

1.    Go to www.annualcreditreport.com and pull all three credit reports (Equifax, Experian and Transunion).  This site is the only place to actually receive your credit report at no cost.  When you go to their site, fill out the one page information sheet and you will have immediate online access to your credit report.  NOTE:  if you have a fraud alert in place you may have to call the credit reporting agencies directly to get your report.  If you don’t have access to a computer you can contact them at 1-877-322-8228 and order the reports over the phone.  This system is automated and you should receive your report in about two to three weeks.  You can also mail in a request form to Annual Credit Report Service, P.O. Box 105281, Atlanta, GA 30348.

2Review all information on your credit report.

A.     Make sure that your name and date of birth are correct.  Be on the lookout for any variations of your name or social security number.  If you notice any discrepancies this information needs to be disputed.  Put a check mark and note by the incorrect entry.

B.     Review each creditor entry for accuracy.  Make sure that the report details are correct.  If you don’t recognize an account or see an account that names you as an authorized user without your knowledge make a note of it.  This information needs to be disputed as well.  Also review the status of each account.  Paying as agreed means that you are on time with your payments.  30-90 days or more late means that you are behind on your payments.  This will have a direct impact on your credit rating.  Written off or transferred means that the original creditor is no longer handling your delinquent account and have either sold it or transferred servicing of the account to a debt collection agency.  Closed means the account contract is completed or transferred and no longer active.  Make sure the report status is correct if not make a check mark and a not e as to why beside the entry.

C.     Look at the date on Experian and Transunion (Equifax does not provide this information on their report) when the information will be deleted or turn positive.  This date is usually 5 to 7 years after the first delinquency.  This date is when your account will reach the statute of limitations which is established by each state.  If the date of deletion is in the next 3 to 6 months, leave the account alone and let the information just fall off.   NOTE:  This only applies if you aren’t about to make a major purchase or need your credit restored to seek employment.  If the dates are extended past 6 months then the entry needs to be addressed.

D.    For any revolving accounts (credit cards) pay close attention to the balance.  According to myfico.com, the average high achiever only uses 7% of their available credit.  By paying down your credit cards you can immediately improve your credit rating.

3.       Begin the dispute process.  I recommend starting the dispute process immediately for any information you don’t recognize. Any of the inaccurate information that we discussed previously should be disputed.   This can be done online for each of the three credit reporting agencies using the links listed below:

 Transunion- http://www.transunion.com/personal-credit/credit-disputes/credit-disputes.page



It will take about 30 to 45 days for your disputes to be resolved.  Depending on the creditor your results may be quicker.  Your dispute results will be either deleted(taken off the report), updated (new information reported), no change (meaning according to the creditor's  records the information is correct).

4.      Settle your collections. Any debt that has been turned over or transferred to a collection agency can potentially be resolved by offering a settlement.  Debt collection agencies will normally settle debt for about 50% of what is owed.  However, depending on the age of the debt it may be a little more or a little less.  When you contact the collection agency be prepared to settle the debt on that date.  This will get you the best results.  Make sure that you ask for a faxed or email copy of the debt settlment prior to paying it.  This will ensure that the collection agency doesn't come back later attempting to recoup the forgiven amount.  Also request a deletion prior to paying any money.  About 50% of the debt collection agencies will delete the information once you have settled the debt.  This will give an immediate boost to your credit rating.  Debts that are under $100 normally must be paid in full.  If the debts are too large to be paid in settlement then a pay arrangement may work for you.  Just remember, make all of the payments on time and as agreed upon.  I recommend doing settlements by pay period, one or two per month or all at once if you 've received some type of windfall.   NOTE:  Any debt settled with a balance left over $600 for example:  You owed $1200 and the debt was settled for $600 leaving an unpaid amount of $600; this may result in you receiving a 1099-C form which will also be sent to the IRS reporting that amount as income.  This could mean that you may owe money come tax time. 

          This information will help you take steps in the right direction to improve your credit.    By taking the necessary steps to improve your credit rating you will improve your overall financial health.