First Time Home Buyers » Credit Center

Myth #5: Seeking Help In Reparing Credit Is Unlawful

Admin — Sat, 13 Dec 2008 05:00:00 +0000

Some companies occasionally (and vaguely) suggest that using a third-party violates some law. Sometimes, they’ll send a letter to consumers who have challenged one or more items on their reports that basically accuses them of having sought outside assistance with the problem. Note that they never actually come out and say plainly, “Using outside counsel is against the law,” because it isn’t. The specific wrongdoing is never spelled out, of course, but the effect is the same: By donning the cloak of artificial officialdom, they hope to intimidate consumers into backing down and getting right back into line with all the other quiet people who are afraid to challenge such faux authority. Lexington clients are instructed to simply send such correspondence to the firm, but even those attempting to address their credit reports on their own are well advised to simply ignore such provocations.

So long as consumers can be managed through skilled deception, creditors will continue to unfairly profit at our expense. Faulty credit scores will continue to define our suitability for home ownership. Credit acquisition, insurance, and employment will continue to be lost as a result of sloppy data maintenance. Fundamental changes will only occur when consumers reject these untruths which are propagated so successfully within our culture.

Information by Lexington Law PsychDoc…www.lexingtonlaw.com

Myth #1: The Nature of Credit Bureaus
Myth #2: Your credit report is reviewed carefully!
Myth #3: Including A Credit Statement Is Helpful…
Myth #4: Negative Items Must Remain For 7 Years…
Myth #5: Seeking Help In Reparing Credit Is Unlawful

Myth #4: Negative Items Must Remain For 7 Years…

Admin — Sat, 13 Dec 2008 04:00:00 +0000

That’s sheer and utter balderdash. Even so, consumers hear it every day when they telephone creditors directly: “Sorry, by law that has to remain on your report for seven years.” The next time you hear that, know this: The automaton posing as a customer service representative is either spreading lies or ignorance, neither of which is good for your fiscal or mental health.

Sure, creditors want consumers to believe the lie because they can charge higher rates of interest to those who have nasties on their credit reports. As far as they are concerned, the longer the stuff remains on consumer credit reports collectively, the larger their profits. The truth, though, is that nobody is required to report anything about any of us for any minimum length of time to anybody else. Put bluntly, relevant laws like the Fair Credit Reporting Act only serve to place LIMITS upon how long items can remain on reports.

Information by Lexington Law PsychDoc…www.lexingtonlaw.com

Myth #3: Including A Credit Statement Is Helpful…

Admin — Sat, 13 Dec 2008 03:00:00 +0000

The 100-word statements can only harm the consumer. First, as we’ve discussed, such personal statements are essentially never read by potential creditors anyway since the credit score is the usual qualifying determinant. Second, those statements only m

Myth #2: Your credit report is reviewed carefully!

Admin — Sat, 13 Dec 2008 02:00:00 +0000

Consider this myth: Your credit report is reviewed carefully

The problem with that business model (i.e. your credit report is reviewed carefully) is that it isn’t very scalable. Scouring an individual’s credit report takes time, and it also takes skilled (with any luck, that is) human beings to render careful judgments. Unfortunately for fair decision-making, that’s just not manageable if you want to extend credit to hundreds of thousands or even millions of people on a national scale. Automation, of course, must save the day, and technology hasn’t yet allowed that to include an individualized reading and analysis of everybody’s credit reports.

That’s where the credit score comes into play. A seemingly wonderful solution, credit scores actually introduce a boatload of other new problems.

So squash myth #2 here and now. Of course creditors want consumers to believe that things haven’t changed, that life is as quaint as it was decades ago when customer service meant “personal service,” and that they actually pay attention to the report itself rather than treating potential customers as little more than impersonal credit scores.

Information by Lexington Law PsychDoc…www.lexingtonlaw.com

Myth #1: The Nature of Credit Bureaus

Admin — Sat, 13 Dec 2008 01:00:00 +0000

Consider this myth: Credit bureaus are official

Even quasi-governmental agencies, and such vital American institutions work alongside your creditors to keep every adult citizen toeing the financial line.

There’s so much wrong with practically every word of this fantasy that it’s tough for a consumer advocate to know where to begin. To be sure, there isn’t anything much official about the credit bureaus at all. Rather, the major consumer reporting agencies — Equifax, Experian, and TransUnion — are simply three large companies operating respectably within the private sector.

In fact, in you were so inclined, you could own a piece of Equifax and Experian yourself just by telephoning your stockbroker. (Forget about buying shares in TransUnion for now, though, as it’s still privately owned.)

Sadly, too many creditors want Americans to believe that the credit bureaus enjoy an official, quasi-governmental franchise and will somehow punish consumers who dare to fight back against sloppy reporting, usurious APRs, exploitative late fees, inexplicable surcharges, unethical debt collection practices, and worse. Such creditors want consumers to believe that challenging a credit report item is like questioning a courthouse record. Fortunately, that’s just not so.

So contrary to the prevailing perceptual reality, there are no official bureaus. And while most Americans perceive their credit reports to have at least the same legal standing as their driving records, the truth is that the government has no role in producing them. Put bluntly, no law mandates a credit report’s existence, and such documents may be considered to be no more than a list of allegations remaining to be proven.

Information by Lexington Law PsychDoc…www.lexingtonlaw.com

All About Credit Repair

Admin — Sat, 25 Oct 2008 07:04:35 +0000

Download our All About Credit Repair Whitepaper

Credit Repair Organizations

Admin — Sun, 03 Feb 2008 05:59:22 +0000

The Truth

No one can legally remove accurate and timely negative information from a credit report. The law allows you to ask for an investigation of information in your file that you dispute as inaccurate or incomplete. There is no charge for this.

However, if you simply do not have the time to truly follow-through on the tedious parts of having your credit accurately updated, we have had clients use these organizations with success:

Credit Verification and Review

Admin — Mon, 28 Jan 2008 06:08:44 +0000

How to obtain your free Credit Report

We recommend www.annualcreditreport.com

This central site allows you to request a free credit report, once every 12 months from each of the nationwide consumer credit reporting companies: Equifax, Experian and TransUnion.

While they won’t usually provide you with a score unless you pay, you will be able to find out what these top three credit bureaus are reporting for you. It’s very likely that they’re all a little different. Creditors don’t have to report to all three credit bureaus, so they typically report to the credit bureau to which they also subscribe.

What you can do on your end

1. Print a copy of your report if you can

2. Circle any errors you see on your report. This would include any current and past accounts (what’s open, what’s closed), invalid accounts (identity theft), late payment reporting history, collections and judgments. Nearly every consumer has an error on at least one credit report from one of the major credit bureaus so be thorough. Any accounts that may have been included in a bankruptcy, please make a note.

3. Now go back over your report again and prepare a list of all the credit items you determined to be innacurate. One tip might include listing these items in an order of most recent to least recent. Credit scores are impacted more by your most recent activity (last 2 years) rather than items that are in the past.

4. Prepare your next step. Disputing your credit report.

Credit Optimization

Admin — Mon, 28 Jan 2008 01:35:06 +0000

There are 2 ways essentially to improve your credit score.

The first step is by disputing any innaccuracies that are reported when you reviewed your credit report.

The next step, in correlation with the first step, is to start working on your personal finance plan yourself. This would include organizing a budget, paying off the right items, and setting personal finance goals. There is a right way and a wrong way in determining what to pay off.

We will discuss the 5 primary reasons why your score is lower and what you can do on your own to help optomize that score in the most efficient way possible .

1. Balance Reduction Technique

Admin — Sun, 27 Jan 2008 20:35:06 +0000

Most borrowers are overwhelmed when they look at their overall debt picture and wonder how they are going to pay off all or any of their debt. The first step is figuring out which debts are influencing your credit score the most and focus on those first.

Here are the debts you want to focus on first.

1.) Pay down the balance of a revolving account to a small amount (such as $10 or $15), specifically those that have a past due balance or those with a balance greater than half of the available credit limit.

2.) Transfer a maxed credit line balance to another card that isn’t over half the credit line. The idea here is to get as many of your revolving accounts to have a balance less than half of the credit limit.

3.) If a credit bureau is reporting a significant difference (over $100) in the total balance owed on an account, then make sure you mark this as an item to include in one of your dispute letters, so that the bureau can update this. Keep in mind however that if you recently made a payment on an account, sometimes it takes a while to update and the creditor might report at different dates to each bureau.

4.) Charge a small balance to an open revolving account with a zero balance. For example, go out and charge a small amount (such as 10$) to a credit card with good payment history. Remember however to make a payment on this new charge because you don’t want them to report it late should you forget about it.