Credit & Debt Consolidation from the Wise-Old-Blogger.com®

Debt repayment problems? One possible solution to debt repayment problems is Debt Consolidation with a credit repair service, but many experts say No to credit repair services. Why? Check out these articles from the Federal Trade Commission: "Credit Repair: How To Help Yourself", and "In debt?".

This Consumer Federation of America (CFA) study from December, 2003 is still relevant today and caution is advised when choosing credit repair assistance, even when companies claim non-profit status. Also find links to Consumer Cooperatives, and State/Local Consumer Groups.

"Unlike the previous generation of mostly creditor-funded counseling services, new agencies often harm debtors with improper advice, deceptive practices, excessive fees and abuse of their non-profit status."

Request a FREE Credit Report from all three credit reporting agencies, once per year: AnnualCreditReport.com, "...the official site to help consumers to obtain their free credit report".

http://www.experian.com/ Experian 1-888-397-3742
http://www.tuc.com/ Trans Union 1-800-916-8800
http://www.equifax.com/ Equifax 1-800-685-1111

According to the Fair Credit Reporting Act:

You are entitled to a free copy of your credit report if you've been denied credit, insurance or employment within the last 60 days. If your application for credit, insurance, or employment is denied because of information supplied by a credit bureau, the company you applied to must provide you with that credit bureau's name, address, and telephone number.

You are entitled to one free credit report per year if you can prove that (1) you're unemployed and plan to look for a job within 60 days, (2) you're on welfare, or (3) your report is inaccurate because of fraud. Otherwise, a credit bureau may charge you for a copy of your report.

Equifax
P.O. Box 740241
Atlanta, GA 30374-0241

Experian
P.O. Box 2002
Allen, TX 75013

Trans Union
P.O. Box 2000
Chester, PA 19022

What if there is an error on my credit report?

Both the Credit Bureau and the organization that provided the information to the Credit Bureau, such as a bank, a mortgage company or credit card company, have responsibilities for correcting inaccurate or incomplete information in your report. To protect all your rights under the law, contact both the Credit Bureau and the information provider.

You can dispute mistakes or outdated items for free. Ask the credit reporting agency for a dispute form, complete their online dispute form at their web site or submit your dispute in writing along with any supporting documentation. Do not send them original documents. Here are two sample letters to credit bureaus to contest erroneous information: (1), (2).

How to repair bad credit yourself: The RLRouse Directory offers some specific steps to repairing bad credit without paying for Debt Consolidation: http://www.rlrouse.com/credit-repair.html.

Non-profit Credit Counseling Service: If you can't resolve your credit problems yourself or you need additional help, you may want to contact a credit counseling service. There are non-profit organizations in every state that counsel consumers in debt. Counselors try to arrange repayment plans that are acceptable to you and your creditors. They also can help you set up a realistic budget. You can find the office nearest you by checking the white pages of your telephone directory. (Source: FTC.)

Note from the Wise Old Blogger regarding credit card and debt settlement:
If you have assets, forgiven debt could bring a 1099-C Cancellation of Debt and possibly an unexpected tax bill if the IRS believes the forgiven debt was income, depending upon the type of debt and your financial fitness when the debt was forgiven. For more information about forgiven debt, talk with a qualified tax advisor. If your debt was the result of an Adjustable Rate Mortgage, learn more about fixed-rate Mortgages at the Mortgage Professor website and this page at Recovery.gov or Hud.gov.

How do lenders decide credit worthiness? The FICO Score: A credit score developed by Fair Isaac & Co. Credit scoring is a method of determining the likelihood that credit users will pay their bills. Fair, Isaac began its pioneering work with fico credit scoring in the late 1950s and, since then, the fico score has become widely accepted by lenders as a reliable means of credit evaluation. A credit score attempts to condense a borrowers credit history into a single number. Fair, Isaac & Co. and the credit bureaus do not reveal how these scores are computed. The FTC has ruled this to be acceptable. (FICO Source)

Credit scores analyze a borrower's credit history considering numerous factors such as:
Late payments
The amount of time credit has been established
The amount of credit used versus the amount of credit available
Length of time at present residence
Employment history
Negative credit information such as bankruptcies, charge-offs, collections, etc.

Sample Dispute Letter

Date
Your Name
Your Address
Your City, State, Zip Code

Complaint Department
Name of Company
Address
City, State, Zip Code

Dear Sir or Madam:

I am writing to dispute the following information in my file. The items I dispute also are encircled on the attached copy of the report I received.

This item (identify item(s) disputed by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment, etc.) is (inaccurate or incomplete) because (describe what is inaccurate or incomplete and why). I am requesting that the item be deleted (or request another specific change) to correct the information.

Enclosed are copies of (use this sentence if applicable and describe any enclosed documentation, such as payment records, court documents) supporting my position. Please investigate this (these) matter(s) and (delete or correct) the disputed item(s) as soon as possible.

Sincerely,
Your name

Enclosures: (List what you are enclosing)

Sample Letter (2) to Credit Bureaus (Source)

Your Name
123 Your Street Address
Your City, ST 01234

The Credit Bureau
Bureau Address
Anytown, State 56789

Date

Dear Credit Bureau,

This letter is a formal complaint that you are reporting inaccurate credit information.

I am very distressed that you have included the below information in my credit profile due to its damaging effects on my good credit standing. As you are no doubt aware, credit reporting laws ensure that bureaus report only accurate credit information. No doubt the inclusion of this inaccurate information is a mistake on either your or the reporting creditor's part. Because of the mistakes on my credit report, I have been wrongfully denied credit recently for a <insert credit type for which you were denied here>, which was highly embarrassing and has negatively impacted my lifestyle.

optional With the proof I'm attaching to this letter, I'm sure you'll agree it needs to be removed ASAP.

The following information therefore needs to be verified and deleted from the report as soon as possible:

CREDITOR AGENCY, acct. 123-34567-ABC

Please delete the above information as quickly as possible.

Sincerely,

your signature

Your Name
SSN# 123-45-6789
Attachment included.

Don't forget to provide proof if you have it!

Keep a copy for your files and send the letter registered mail.