Creditors charge off accounts all the time to avoid being responsible for the debt you owe them. They have every right to do it, but it would be nice if they tried to negotiate payments with you before charging off your account dinging your credit reports and lowering your credit scores. Because once they charge off it off, your account is closed with no chance of a good payment history showing up again. At least with a late payment you have some good payment history showing and the chance of having the creditor removing the late payment themselves, but not with a charge off.
This is the best way to remove a charge off from your credit report.
Credit Bureaus Disputing
This can be extremely easy depending on the creditor and situation or it can stay on their forever if done incorrectly. The Fair Credit Reporting Act was put into place for consumers to dispute anything on their credit report they believe to be inaccurate or erroneous. Consumers may dispute anything on their credit report by just asking for verification on the item.
Never dispute everything on your credit report at once (unless you just have 1 or 2 items needing disputing) or accidently verify the item yourself by claiming you had an account. Do it this way or your account could get marked as frivolous and make it impossible to send in another dispute for at least 60 days. Take your time, be honest, and write a good dispute letter. If the item comes back as verified, do it again, these things can take time.
Disputing and removing charge offs is not a new thing and has been around for several years, but the chance of removal has gone way up with rise in the following actions:
* Identity Theft - The fastest growing crime in the world.
* Credit Reporting Errors - The whole reason the Federal Trade Commission put the Fair Credit Reporting Act into affect.
* Unfair Creditor Practices - Obama has begun new legislation to stop credit card companies and other creditors from treating customers unfairly.
As you can see now more than ever we should be aware of our credit reports and what creditors are reporting to it. Dispute anything that is reporting negatively by asking for verification and your chance of charge of removal will improve drastically.
The credit bureaus have been forced to remove millions of negative items on people's credit reports. The leading credit repair firm in the nation removed 158,531 charge offs in 2009. I'm sure they could remove charge offs for you too.
Thursday, October 14, 2010
"Credit Charge Offs" - What They Mean to Your Credit
Once a charge off was declared by your creditor, they would consider it as bad debt and would be allowed to include it in the Profit and Loss section of the debtor's financial statement. This would allow your creditor to treat your bad debt as a business expense and the Internal Revenue Service would not demand any taxes on these items.
Although it is considered to be a bad debt, it does not mean that it would not be uncollected. Your creditor would still be doing necessary steps in order to collect their money including filing a lawsuit if hiring an outside collection agency does not work.
According to the Fair Credit Report Act, these charge offs could remain for as long as seven years unless your creditor asked the credit bureau to remove it. Of course, you will have to negotiate payment of your debt, whether in partial or full. Factors that your creditor will consider before agreeing to any negotiation include debt amount, offered settlement, and other policies that the creditor requires.
If you are attempting to settle your charge off, you should remember to document everything. Also important is to make arrangement with someone for the creditor's office who has the legal authority to enter into such agreement. You should make sure that the agreement is legal and binding before you pay anything. If not, you will never have the chance to remove the charge-off record on your credit report.
When negotiating payment terms, you should make sure that you are doing so realistically. Do not make promises that you will have difficulties keeping. You will only make matters worse if you try to commit to paying more than you can afford. To deal with your charge-off troubles, you must be able to realistically face your financial situation. Determine what the reasons for your indebtedness were and how you can manage them. In most cases, a change in spending habits and bills management is in order.
charge offs can actually be avoided if you are just diligent in paying your bills or speaking with your lender. On the other hand, if the charge-off is already there in your credit history, then dealing with it should be your top priority. Although it would take some time, it is only the responsible thing to do. You should definitely learn from this experience and make sure it does not happen again.
Although it is considered to be a bad debt, it does not mean that it would not be uncollected. Your creditor would still be doing necessary steps in order to collect their money including filing a lawsuit if hiring an outside collection agency does not work.
According to the Fair Credit Report Act, these charge offs could remain for as long as seven years unless your creditor asked the credit bureau to remove it. Of course, you will have to negotiate payment of your debt, whether in partial or full. Factors that your creditor will consider before agreeing to any negotiation include debt amount, offered settlement, and other policies that the creditor requires.
If you are attempting to settle your charge off, you should remember to document everything. Also important is to make arrangement with someone for the creditor's office who has the legal authority to enter into such agreement. You should make sure that the agreement is legal and binding before you pay anything. If not, you will never have the chance to remove the charge-off record on your credit report.
When negotiating payment terms, you should make sure that you are doing so realistically. Do not make promises that you will have difficulties keeping. You will only make matters worse if you try to commit to paying more than you can afford. To deal with your charge-off troubles, you must be able to realistically face your financial situation. Determine what the reasons for your indebtedness were and how you can manage them. In most cases, a change in spending habits and bills management is in order.
charge offs can actually be avoided if you are just diligent in paying your bills or speaking with your lender. On the other hand, if the charge-off is already there in your credit history, then dealing with it should be your top priority. Although it would take some time, it is only the responsible thing to do. You should definitely learn from this experience and make sure it does not happen again.
Tuesday, October 12, 2010
What's a Good Card for My Credit Score?
One of the questions frequently by those seeking help with repairing their credit, whether by sifting through credit repair reviews for professional services or trying to go it alone is what the best type of credit card for their credit score is, or if there even is one. Will a secured credit card get them more points than an unsecured one? What about the differences between cards from banks vs. credit unions? And how do store cards factor in?
Well, the good news is that you can carry any type of credit card; none of them adversely affect your score. credit repair services The only two types that really matter are bank credit cards and retail cards.
What's in your wallet?
So now that we know which two types of cards matter the most, is there any difference of points between them as well? There is a slight difference according to FICO, the firm that came up with the most widely used credit scoring method. How you use your bank card can impact your score more than store cards - not having one in the first place can actually dock you a few points in the Types of Credit Used category.
Don't fret if you don't have any bank cards in your wallet - most are incredibly easy to get. Even if you find you only qualify for a secured credit card (the difference being you'll be required to put down a deposit to open the account), there's no worry as secured and unsecured cards are treated no differently.
Even if you don't feel like going out and getting a bank card (even though you really should, if you want the best credit profile you can get), you can still build up a good credit score with at least revolving retail card account. credit repair services You likely won't achieve the highest score possible (850 on the FICO scale), but you will able to at least taper off at a nice spot in the 700s.
So there you have it. When it comes to your credit score, bank cards are the absolute best cards you can have. Of course, your types of credit used only make up 10% of your overall credit history. In addition to what types of cards you should have, and how many (we recommend no less than 3 open cards), you should remember to keep focus on everything else that goes into your profile as well, from making payments on time to paying down all outstanding debts.
Well, the good news is that you can carry any type of credit card; none of them adversely affect your score. credit repair services The only two types that really matter are bank credit cards and retail cards.
What's in your wallet?
So now that we know which two types of cards matter the most, is there any difference of points between them as well? There is a slight difference according to FICO, the firm that came up with the most widely used credit scoring method. How you use your bank card can impact your score more than store cards - not having one in the first place can actually dock you a few points in the Types of Credit Used category.
Don't fret if you don't have any bank cards in your wallet - most are incredibly easy to get. Even if you find you only qualify for a secured credit card (the difference being you'll be required to put down a deposit to open the account), there's no worry as secured and unsecured cards are treated no differently.
Even if you don't feel like going out and getting a bank card (even though you really should, if you want the best credit profile you can get), you can still build up a good credit score with at least revolving retail card account. credit repair services You likely won't achieve the highest score possible (850 on the FICO scale), but you will able to at least taper off at a nice spot in the 700s.
So there you have it. When it comes to your credit score, bank cards are the absolute best cards you can have. Of course, your types of credit used only make up 10% of your overall credit history. In addition to what types of cards you should have, and how many (we recommend no less than 3 open cards), you should remember to keep focus on everything else that goes into your profile as well, from making payments on time to paying down all outstanding debts.
How to fix your credit rating woes
A credit score that's anywhere above 650, is generally considered healthy. A credit score that's raised to 720 can save you a lot of money, through a reduction in interest rates. For those who've got a decent credit score, but would like to raise it, to save on interest rates, or obtain credit cards with ease, and also those who've got a not so good credit score, read further to know, how to improve credit scores.
Reports indicate that there are more than 30 million people who have severe credit blemishes. There are a few pointers that might indicate a falling credit score. For example if you have been denied a credit card, chances are that you have a bad credit score. Utility services always run a credit check to decide before extending their services for you. If they've decided not to continue their services, chances are you are running into a bad credit score. Debt collectors calling you is also a sign that your credit scores are going downhill. credit repair services Creditors transfer your account to a debt collection agency only if they are assured that you are unlikely to pay back their bills.
It's hard to believe but credit reports are also the basis of promotions in many companies, especially in financial companies. If you've been denied a promotion, even though you deserved it, chances are that your credit scores aren't too rosy. Your landlord is also most likely to check for credit scores. For those who have had to face one of these experiences, its time you meet up with a professional credit repair services agency. These credit repair service guys help you to sort out your finances and come up with solutions that could help you to not only come out of a bad credit score, but also manage to get you a good credit score.
There are a number of websites that offer credit repair services. Before you choose one, there are a few things that you need to know. The first and foremost thing is to know what your credit score is. You could also a get a free check of your possible credit rating through these websites. These credit rating service agencies offer different packages that you could choose from.
Besides these there are a few simple steps that you can take to improve your credit scores. For example remember to use the credit card sparingly and as little as possible. You could start by paying cards that are close to their limits. This would help you to keep the credit score in check. Also check for the credit limits. Often credit card companies, show a limit that's lower than your actual limit. You could always call these companies and get them altered.
A few, but significant steps can change the way, the world thinks about you. A good credit score not only helps you attain financial freedom, but also makes you feel good about yourself.
Reports indicate that there are more than 30 million people who have severe credit blemishes. There are a few pointers that might indicate a falling credit score. For example if you have been denied a credit card, chances are that you have a bad credit score. Utility services always run a credit check to decide before extending their services for you. If they've decided not to continue their services, chances are you are running into a bad credit score. Debt collectors calling you is also a sign that your credit scores are going downhill. credit repair services Creditors transfer your account to a debt collection agency only if they are assured that you are unlikely to pay back their bills.
It's hard to believe but credit reports are also the basis of promotions in many companies, especially in financial companies. If you've been denied a promotion, even though you deserved it, chances are that your credit scores aren't too rosy. Your landlord is also most likely to check for credit scores. For those who have had to face one of these experiences, its time you meet up with a professional credit repair services agency. These credit repair service guys help you to sort out your finances and come up with solutions that could help you to not only come out of a bad credit score, but also manage to get you a good credit score.
There are a number of websites that offer credit repair services. Before you choose one, there are a few things that you need to know. The first and foremost thing is to know what your credit score is. You could also a get a free check of your possible credit rating through these websites. These credit rating service agencies offer different packages that you could choose from.
Besides these there are a few simple steps that you can take to improve your credit scores. For example remember to use the credit card sparingly and as little as possible. You could start by paying cards that are close to their limits. This would help you to keep the credit score in check. Also check for the credit limits. Often credit card companies, show a limit that's lower than your actual limit. You could always call these companies and get them altered.
A few, but significant steps can change the way, the world thinks about you. A good credit score not only helps you attain financial freedom, but also makes you feel good about yourself.
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