Posted by Info BestCreditRx on Fri, Feb 17, 2012 @ 08:24 AM
Great question... Many of our clients have been asking this lately and we're going to ablige them...
In most cases, bankruptcies will remain on a credit report for 10 years following the discharge of the bankruptcy. Other entries remain for about 7 years from the date of the last activity. This means that, generally, the 7-year clock is reset whenever you generate any activity on a non-delinquent account, including making a payment. But once the account has gone and remained delinquent, the clock cannot be reset. Some unscrupulous creditors will try to reset the clock by reselling the account, but this is not correct. The FTC has made their position clear on this.
Current law generally prohibits consumer reporting agencies from including in a consumer report accounts placed for collection or charged to profit and loss which predate the report by more than 7 years. The law now specifies that the seven-year period with respect to information concerning a delinquent account charged to profit and loss may begin no more than 180 days after the commencement of the delinquency.
Congress intended to establish a single date --the start of the delinquency --to begin the obsolescence period (7 years plus 180 days). This avoids the "multiple date" problem that arguably existed prior to the 1996 amendments to the law. Thus, the date of the "commencement of the delinquency" that led to the creditor's chargeoff or collection action would be the earliest date from which the account was continuously delinquent, plus 180 days.
The start of the 7 year period is now described with some precision by the statute, and subsequent events, including sale of the charged off account by the creditor, or a payment, or a dispute about the account by the consumer, do not change the allowable reporting period.
There is an exception for chargeoffs or collections that were first reported before December 29, 1997. Adverse information such as collections or chargeoffs reported before December 29, 1997, are not subject to the new "commencement of the delinquency" provision, and can be reported for 7 years from the date the creditor actually charged it off.
If you have further quesitons or concerns about this, please do not hesitate dropping us and email. We'll be glad to help...
Posted by Info BestCreditRx on Fri, Feb 10, 2012 @ 09:24 AM
Good Morning and Welcome! Many people have have had many quesitons about the FCRA. Not only is this informaiton in our "Resources Tab" but we're going to break it down a bit so that its not so "Legal."
Basically the FCRA wanted to address credit issues and provide a remedy to consumers for poor record keeping on the part of the credit reporting agencies. The US Congress first passed the Fair Credit Reporting Act (FCRA) in 1971. Since then, it's been revised and refined several times, most recently in 1997. The laws established by this act require the credit reporting agencies to remove all obsolete, inaccurate, irrelevant, outdated, misidentifying, incomplete, incorrect, erroneous, and misleading information from their credit reports.
Specifically, if the completeness or accuracy of any item in a consumer's file at a credit reporting agency is disputed, the agency should re-investigate free of charge and record the current status of the disputed information and/or delete the item before the end of the 30-day period. The time begins on the date on which the agency receives the notice of dispute.
In addition, the credit reporting agency shall promptly provide notification of any dispute to anyone who provided any item of information in dispute. If an item is found to be inaccurate or incomplete or cannot be verified, the credit reporting agency shall promptly delete the item, or modify the item, as appropriate, and notify the consumer no later than 5 business days after the completion of the re-investigation.
The credit reporting agency must also provide the consumer with notice that a description of the procedure used to determine the accuracy, including the business name, address and telephone number of any furnisher of information, must be made available to the consumer upon request. This description of the re-investigation procedure must be provided within 15 days of the request.
The relevant laws are found in United States Code, Title 15, Chapter 41, entitled Consumer Credit Protection. The laws relating specifically to credit bureaus are found in Subchapter III of the above cited chapter, entitled Credit Reporting Agencies. The laws which detail requirements relating to information contained in credit reports is found in 15 USC § 1681c. The laws which require the credit reporting agencies to assure maximum possible accuracy are found in 15 USC § 1681e.
If you should have more questions you can click below to be taken to that page:
Posted by Info BestCreditRx on Wed, Feb 01, 2012 @ 05:57 AM
Your credit score is likely the most important three-digit number in your life.
Your score affects how much you pay for credit, and it can affect other bills you pay, where you live and where you work.
- Banks and credit card companies review your score when deciding whether to extend you credit and how much interest to charge.
- A high score can lead to lower car- and home-insurance premiums, a deposit waiver from utility companies and a better service package from the cell-phone company.
- Many landlords check credit scores before allowing you to sign a lease.
- Many employers do credit checks on prospective employees.
With so much at stake, it's wise to find out where you stand and take steps to raise your score if it's below 700, particularly before you apply for a mortgage or other loan. Above 760 and you're in the upper echelon. A score below 620 tells people you're not a good risk and dooms you to credit denial or subprime interest rates.
And don't be surprised when the low end credit score of 620 is increased to a minimum of 640 to get approved for a home loan. The mortgage lenders and Fannie Mae and Freddie Mac have already said that higher scores will be required in the future to get approved to buy a new home.
Credit requirements are tightening everywhere. Why? Risk. Scores below 680 are considered much more risky then those over 680 when it comes to whether or not you are going to pay your monthly obligations or not.
Every time you make a late payment your score drops. Every time you pull your credit your score drops. When your balances on credit cards goes above 30-40% of your total avaialable credit, your score drops.
So what do you do? Pay your bills on time. Don't apply for credit at every store you shop. Don't let your credit line creep up on you. Pay down your cards. Make payments on time and don't get credit at every Tom Dick and Harry you shop at.
Posted by Info BestCreditRx on Fri, Jan 27, 2012 @ 10:54 AM
Until recently, a credit score of 680 was something to be proud of. It meant you paid most of your bills on time, got dinged when you went shopping for a refi, but in general, had a solid enough record to get a loan at the best rates.
Not anymore. That 680 is firmly second-tier these days. Now, borrowers need at least 720 to get the biggest loans or the best terms, including a credit card with the longest 0% APR promotion or a jumbo mortgage. For millions of once-desirable consumers with scores between 680 and 720, that 40-point jump could cost thousands of dollars over the life of a typical loan.
Once that line has been drawn, there’s no wiggle room, either. Lenders place borrowers into brackets, which means someone with a score of 719 is lumped into a bracket that starts as low as 690. That one measly point could cost more than $600 over the life of an average 36-month car loan, or $2,500 over the life of a 15-year home equity loan, according to Informa Research Services. And that is "ludicrous on its face," says Ed Mierzwinski of the U.S. Public Interest Research Group. "Credit scores are a blunt tool being abused by creditors as if they were a sharp instrument.”
For their part, lenders say the credit scores aren’t arbitrary and that a score of 720 predicts the borrowers who are most likely to repay their debts and least likely to default. At the same time, they’re more profitable than people with a perfect score of 850, because they’re also likely to carry a balance or incur fees – and therefore, to generate profit for the lender.
As for 680, it’s become a casualty of the market crash. When Fannie Mae and Freddie Mac were backing mortgages after the crash, they settled on the 720 threshold for the best pricing, says Keith Gumbinger, a vice president at HSH Associates, a mortgage-data tracking firm. At the time, most borrowers were afraid of lending to anyone, so 720 seemed plenty low. Because most mortgages are backed by Fannie or Freddie, the major lenders kept the same threshold, and as banks have started to put loans on their books again, it’s stuck.
Of course, while earning a 680 wasn’t all that difficult before the recession, the new good-credit bar of 720 is harder to reach. With more people out of work and unable to pay their bills, even consumers with previously envious credit scores might not reach 720. To get there, a consumer would need low balances on credit cards and a 15-year credit history — but might have missed a couple payments over the last two years. Someone who regularly pays on time could drop from the mid-700s if he applied for several new credit cards recently. Other 720-scorers: Those who haven’t missed a payment but carry balances that are more than 30% of their credit line; or those who have a short credit history but pay on time.
For someone on the cusp, the differences could be as small as one extra credit inquiry – like when a lender looks up your credit score before approving you for a loan, or if a prospective employer pulls your credit report without telling the credit bureaus it’s strictly for employment reasons. The same thing could happen if you’re suddenly using more of your available credit because you made a big purchase, says John Ulzheimer, president of consumer education at Credit.com.
What’s a 680 to do? Sadly, not much beyond the regular steps to credit score maintenance, experts say. That means paying bills on time and keeping debts to a reasonable level. And be patient, says Ulzheimer: As lending picks up, lenders will be forced to relax their standards once again. Within as early as six months to a year, 680 could be back on top.
Posted by Info BestCreditRx on Tue, Jan 17, 2012 @ 08:43 PM
A person's credit score determines their ability to get credit for everything from purchasing a home to a new car loan to student loans and credit card approval. Most consumers understand the importance of maintaining a strong credit score. Simultaneously, many consumers are uncertain how credit reporting agencies determine their credit score. The agencies use complex mathematical algorithms and your credit score looks at the various factors that can affect an individual’s ability to handle loan and or credit payments to the lender. Credit scores put a number on how likely you are to pay your loan or default on the borrowed amount.
Higher credit scores are more likely to maintain a positive payment history while lower credit scores are more likely to let payments be late and/or default entirely on the loan.
Credit scoring methods look at a weighted mathematical value to 5 key factors which have been proven to have the maximum potential of an individual’s ability to pay their debt off and maintain a strong and positive payment history. These are the most critical factors that the credit reporting agencies look at when determining your credit score:
- 35% Payment history
- 30% Debt to credit ratio. How much debt you have outstanding vs. your total line of credit.
- 15% How old your accounts credit history is.
- 10% Kind of credit accounts you hold.
- 10% The total amount and quality of inquiries against your credit report.
Now that you understand what makes up your score, how do you go about repairing your credit?
- Repair your credit yourself. Takes a significant amount of research and letter writing.
- Consult and attorney or debt settlement specialist. May eliminate some of your debts but not address your overall credit needs.
- Find a credit repair company that provides an individualized prescription to the problem at hand. These companies are experts and professionals in repairing credit. They do it hundreds of times per day and they have the resources and ability to get you the best credit results in the shortest period of time.
Get a Professional to give you the proper prescription to your credit issues.
Posted by Info BestCreditRx on Tue, Jan 17, 2012 @ 05:12 AM
Ok here is the last tips we have about fixing your credit and things to think about. I know some of these things you must be saying, "I dont have the money for that," well guess what, alot of people don't and you have to start somewhere. We're positive that everyone can scrap together a little cash to start saving and putting away!
Start an emergency fund: When you have an emergency fund, you don't have to resort to credit or loans when you have a financial emergency, like a major car repair. Building an emergency fund can take considerably less time than paying off a credit card used to cover an emergency expense. The ideal emergency fund will pay for six months of your living expenses, but socking away $1,000 or $2,500 is usually a more realistic short-term goal.
Pay less interest: Essentially, interest is the cost of having credit. The money you pay in interest pads your creditors' pockets when it could be padding your own. You can pay less in interest by negotiating lower interest rates or paying your balances off sooner (or both). Transferring balances to a zero percent interest rate balance transfer credit card can also temporarily reduce your interest payments.
Stop paying late fees: Paying late fees is another unnecessary expense that goes to your creditors. Not only do late payments result in late fees, you might also see a spike in your interest rate (after a 60-day delinquency) and a drop in your credit score. These negative results can be avoided by paying your credit card bills on time.
Live within your means: To live within your means requires big changes. It means using a budget to keep your spending in check. Tracking your spending to figure out where your money is going. Finally, you'll have to stop using your savings or credit cards to extend your paycheck.
Posted by Info BestCreditRx on Wed, Jan 11, 2012 @ 09:17 AM
Good Morning Everyone. To continue our dicussion of 2012 New Years Resolutions, here are some more topics that are very helpful when thinking about your credit and what to do:
Repair your credit: Need to fix bad credit? What are you waiting for? The New Year is as good a time as any to start repairing your credit. First, check your credit report to figure out what's causing your bad credit. Then, plan a solution for each of those things, e.g. dispute the account, offer a pay for delete, or let the credit reporting time limit elapse.
Use credit wisely: Have you been using credit in a way that encourages debt, like swiping when you know you can't afford it? To change bad spending habits, first you have to recognize you have them. Then, you must consciously decide to keep your spending in check. After making good credit decisions for a few weeks, you'll find that good spending habits start to come naturally.
Stop living paycheck to paycheck: The paycheck to paycheck habit is a dangerous one. All it takes is one big expense to send you to financial ruin, possibly even bankruptcy. Pulling yourself out of this bad habit may take several months. Track your expenses, cut the things you can live without, and use a budget to give you some breathing room in your paycheck.
Improve your credit score: Your credit score influences whether or not you get approved for new credit cards and loans. It also affects the interest rate you pay. Lower credit scores risk denied applications or high interest rates. Improving your credit score improves your ability to get good credit card and loan terms.
Stop maxing out your credit cards: You're taking a big financial risk if you continually charge your balance all the way up to the credit limit. You should always keep some available credit if not to protect your credit score, then to leave room for an emergency (which you'd turn around and repay from your emergency fund). This year, resolve that you'll stop maxing out your credit card.
Do you have more quesitions? If so, give us a call today to discuss further.
Posted by Info BestCreditRx on Thu, Jan 05, 2012 @ 01:47 PM
We've all made our New Years Resolution but was one of them about your credit? Most New Year's resolutions involve improving health or getting rid of a bad habit. Don't forget about improving your financial health and your bad credit habits in the new year. As you resolve to make some changes this year, add one or more of these credit/debt New Year's resolutions to your list.
Monitor your credit: You don't have to sign up for a credit monitoring service to keep an eye on your credit throughout the year. Instead, you can order your free credit reports through AnnualCreditReport.com. Monitoring your credit report helps you detect identity thefts, ensure creditors are reporting your information correctly, and enables you to take action on credit/debt problems before they get worse.
Clean up your credit report: Don't take for granted that the information contained in your credit report will be accurate. Mistakes happen all the time and it's up to you to correct those mistakes. A clean credit report is important especially if you plan to apply for a mortgage, car loan, or credit card. A credit report dispute is a good place to get started removing negative information from your credit report.
Get out of debt: In 2011, Time.com listed "Get out of debt and save money" as one of the most commonly broken New Year's Resolutions. Perhaps it's because people don't have a good plan for getting out of debt, or maybe they lose motivation in the middle of the year. Make this year the year that you get serious about getting out of debt for good.
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Posted by Info BestCreditRx on Thu, Dec 22, 2011 @ 11:09 AM
Perhaps you are among those whose credit has taken a nosedive in recent years, for which you are suffering this holiday season. If so, BestCreditRx.com has a holiday gift for you.
BestCreditRx’s online free credit repair kit goes into great detail about the urban legends of credit, different theories and logistics behind the credit repair process. (you can probably find many books at your local library to help you as well) Below are some basic steps to follow:
1. Request copies of your credit reports: It is essential you take advantage of the annual free credit report you are entitled to from each credit reporting agency.
2. Analyze your report: Go through your credit report with a fine-tooth comb, making sure you know every item listed, good and bad.
3. Make a list of all items that you consider to be questionable or negative: Note, it is important that you dispute all negative items, whether you agree with them or not. It is your legal right to dispute anything on your credit report.
4. Write dispute letters to the credit bureaus: BestCreditRx.com free credit repair guide provides sample dispute letters for your reference.
5. Mail letters to the credit bureaus: Send them certified mail so you have proof when the credit bureaus receive them. Bureaus have 30 days to process disputes -- if they can't do it within this time, they must remove the listing.
6. Be Sure to document your efforts: Record when you sent your letters, and the results.
7. Waiting game for the bureaus to investigate your claims: Did the credit bureaus respond in time? If not, they must remove the listing.
8. Review and analyze the results: After the credit bureaus have responded to your request, go through your (hopefully) adjusted credit report to note changes, or the lack thereof.
9. Try, try again: Dispute your negative listings once again, but this time noting different grounds for dispute than the previous time. Any number of things could prove impossible for the credit bureaus to verify.
About BestCreditRx.com: BestCreditRx.com was founded in 2004 as one-stop destination for consumers looking for professional help and free advice on repairing bad credit and rebuilding good credit. We advocate the self-help approach to credit and debt management but as many people experience, they do not have the time nor have the resources to do it on their own. Thats where we come into play!
For More Information on BestCreditRx.com Click the logo below:
Posted by Info BestCreditRx on Sat, Dec 10, 2011 @ 11:40 AM
The three credit reporting agencies - Experian, Equifax and TransUnion - get overwhelmed during the holidays, specifically between Thanksgiving and New Year's. The reason is credit card companies flood the agencies with holiday "Instant Approval" applications to be processed with credit checks. Then throw in the fact a large number of staff at the bureaus, credit card companies, and collection agencies are using their vacation days during this time. This under staffing and overwhelming workload makes it difficult to get all of the credit reports resolved during this time. The good news for consumers is that more negative accounts are deleted during this time than at any other time of the year.
Staffing at the Credit Bureaus in the Customer Service Areas Handles:
- Taking In and Logging Disputes
- Verifying Information
Taking in Disputes - The Call Center: Apparently, the attrition rate is VERY high in call centers, as is the "call off rate" (people calling in for personal time and sick time.) On an average day the call off rate is about 10-15%. If a customer service pool consists of 200 employees, this means that 20 people are absent. Often, the missing employee workload plus any additional high volume can be transferred to a third party vendor.
During the holidays, many employees want to spend their vacation with their families, and the call off rate is about 25%, or 40-50 missing employees. To give you an average rate of pay: Customer Service Reps $12.75 an hour plus bonuses every quarter, and company paid benefits (100%)
All credit bureau call centers are not just under the thumb of the FTC and the Fair Credit Reporting Act(FCRA). Their customer service must also follow federally mandated guidelines, the Average Speed of Answer or ASA. They can't just let the phones ring off the hook.
Credit Dispute Investigation: Like the call centers, the credit dispute investigation department has extremely high turnover and attrition, and they don't get the best candidates for the positions because they pay so poorly. The people doing the investigative work pay their staff even less than the call center people ($7-8 bucks an hour) and can't hold the ones they have. It's no wonder credit reports are all screwed up. Part of the problem seems to be training. The credit bureaus must abide by many different kinds of law and most people of the caliber they recruit aren't up to learning the details and technical information.
If a dispute is sent, and it seems knowledgeable as far as the FCRA, the dispute is sent to Special Handling. The employees in "special handling" are merely people that have been employed for a few years, not necessarily those with better (or any training).
Take Advantage of These High Absenteeism Rates! Take the hypothetical situation that a Call Center Manager faces: a ton of investigations sitting in a system waiting for verification, as well as high call volumes and not enough people to handle them. Many times people are pulled from the investigation area to answer the phones, lest they get in trouble with the government for not keeping to the federally mandated ASA.
In the meantime, credit disputes are piling up, and the staff to handle them is diminished. Disputes are sitting there waiting, with very few people to work them. The FCRA states that if a credit bureau cannot verify information in a dispute, the information must be deleted. Many times the information is deleted just so the credit bureaus can stay within federal guidelines.
The bottom line is that from around the end of November until after the 1st of the year, productivity is at an all time low because they have staffing issues. This is the best time to send in your disputes. And to make it harder on them, we recommend you send in only one item at a time per letter.
Running 3 Month Holiday Special... Give us a call today to find out more!