If you have collections on your credit report, you can count on most of them staying on there for minimum of 7 years from the original collection date. Sometimes you will have the collections sold to different collection companies. This could be a challenge trying to get the original collection date, but the creditor currently reporting the collection must report this information correctly. Typically the creditor reports the wrong original collection date, so you have to dispute it. They must comply with this request under the (FCRA) Fair Credit Reporting Act.
Here is how long items stay on your credit report from original collection date:
1. Medical collections – 7yrs
2. Charge Offs – 7yrs
3. Late payments – 7 yrs
4. Judgments – 7 yrs
5. Tax Liens – until you pay off
6. Repossessions – 7yrs
7. Chapter 7 Bankruptcies – 10 yrs
8. Chapter 13 Bankruptcies – 7yrs
9. Collections – 7 yrs
10. Inquiries – 2 yrs
11. Foreclosure – 7 yrs
I am sure you have heard you can get obligations that you owe removed from your credit report. I will tell you and so will the FTC that you cannot get obligations removed from your credit report even though you owe the debt. The only items you can get removed are items that are not correct, for instance.
Debt that is not yours
Maybe you and your father have the same name, and report is skewed
Duplicate items
Items over expiration date
Inaccurate reporting, like slow pays.
Maybe you don’t know what is being reported on your credit report. Its time you find out, so if there is inaccurate information you will know. Current statistics show that 1 out of 4 credit reports have incorrect information on it that would cause a denial of some type of loan.
This is a step by step guide that will give you the tools to fix inaccurate information on your credit report. First you need to check when the information being reported is set to expire. Next use our customizable dispute letter, and sent it to the Credit Bureaus. It is really that simple.
Step 1: Look for incorrect information being reported about you:
Order a current copy of your credit report with scores from all 3 Bureaus online. Print your credit report and view it carefully. Make note of any information that is not correct. Determine when the information is set to expire. This guide will help you determine if and when the negative information on your credit report will expire.
Public Records:
a.Bankrupcties- Chapter 7 Bankruptcy will expire from your report after 10 years of file date. Chapter 13 will expire from your report after 7 years from file date.
b. Judgements- Court ordered decisions stay on your credit report for 7 years from file date. Example: child support, civil and small claims court.
c.Tax Liens- Tax liens stay on your credit report until you pay it off. Once you have paid the tax lien, it will stay on there 7 years from paid date. This applies to City, State, and Federal tax liens.
Charge –off – records- this record will show up on your credit after a creditor has wrote off the debt as a loss. This will remain on your file for 7 years.
Inquiries- Records of application for credit. These types of inquires usually stay on credit for a maximum of 2 years. Checking your credit online with credit sores does not damage your credit like these inquires do.
Closed Accounts- This information whether negative or good stays on your credit report for 7 years.
Collection Accounts- This record should expire after 7 years from the last 180 day late payment that led the account to collection to begin with. The expiration date is the same even if the collection is sold multiple times.
Foreclosure Records- Foreclosure and property deed-in-lieu records remain on credit for 7 years from foreclosure date.
Late Payments- Late payments stay on record for 7 years.
Repossession Records-Vehicle repossessions stay on you credit report for 7 years.
Use this expiration information to determine what should not be on your report. You should also check for information that is being reported on there that is not yours. Also make sure there is no information that are cross records either.
Step 2: Write Dispute Letter
Once you have determined what is not correct on your report, it is time to write you disputes to the Bureaus. You will need to send the letter to each of the credit bureaus via certified mail.
Example dispute letter:
Date
Your NameMailing AddressCity, State, Zip
Re: Disputing Inaccuracies on My Credit Report
Name of Credit Reporting Bureau Mailing Address City, State, Zip
Dear Sir or Madam:
I am writing for two (2) reasons:
1. To dispute certain information in my credit file; and
2. To have you investigate/re-investigate and remove inaccurate information from my Credit Report and prevent its re-insertion. The item(s) I dispute are encircled on the attached copy of the credit report and further identified by (identify the items by name of source, such as creditor or tax court, etc. and identify type of item, such as credit account, judgment, etc.)This item is (inaccurate or incomplete) because (describe what is inaccurate or incomplete and why). I am requesting that the item be deleted (or whatever specific change you are requesting) to correct the information.(If you are enclosing documents such as copies of canceled checks, payment records, court documents, send copies only, you should always retain the originals — and use the following sentence.)
Enclosed are copies of the following documents supporting my position?
1.
2.
3.
Please reinvestigate this (these) matter(s) and (delete or correct) the disputed items within the time frame required by the Fair Credit Reporting Act (FCRA) and inform me in writing of the outcome. Thank you for your time and consideration in this matter.
Sincerely,________________________
(Signature)Your name
Step 3: File your dispute
Submitting your dispute by mail is the suggested way, but only Equifax and Transunion allows this kind of dispute. Experians requires all disputes to be submitted online.
The 3 Credit Bureaus have 30 days to investigate your dispute and update your credit report if the dispute is valid. Once they have investigated your concern, they will send you a letter stating what was updated on your credit report. If you were not able to get a inaccuracy fixed you will need to resubmit your dispute with new documentation.
A credit inquiry is an item on your credit reportthat shows with permission a creditor requested your free credit report.
Not all credit inquiries affect your credit score: You may notice when you pull your credit report there are inquiries on there from a business you are not familiar with. The only inquiry that affects your credit score is the one where you are applying for credit. This is considered a hard pull on your report.
Inquiries that affect your credit score: There is only one type of inquiry that affects your credit score. This type of inquiry is applications for a mortgage, auto loan and other credit, by you authorizing these creditors to access your credit report. This type of inquiry prompted by your own actions ends up on your personal credit report and affects your score.
An inquiry that does not affect your credit score: Checking your own personal credit report or any business that offers goods and services that requests your report. A business that you already have a account with that requests a check. A potential employer that does credit checks. Some of these types of inquiries might show up on your report but do not affect your credit score.
Checking your credit report does not affect your Credit Score:
Checking your credit report on a regular basis to ensure it is accurate and error free is recommended by Fair Isaac the inventor of the FICO Score. Maintaining a error free credit report is part of credit management which will improve your credit rating over time. Ordering your credit report at CreditScoreQuick.com does not hurt your credit score.
How credit inquiries are factored in your Credit Score: There are five types of information used to calculate your credit score. Each category accounts towards a percentage of your score.
Payment History – 35%
Amounts Owed – 30%
Length of Credit History – 15%
Types of Credit in use – 10%
New Credit – 10%
Don’t let inquires scare you. There is nothing wrong with shopping for a better rate, or better terms on a loan. As you can see in the about chart, payment history is the biggest factor in calculation process of your credit score. The second biggest factor is how much of your approved credit limits are charged up. But of course you don’t want to go out and start applying for every credit offer out there either. Be responsible and have a good mix of credit, but stay away from too much credit as well You really on need 3 lines of credit reporting on your credit report. Example: 1. credit card
2. car note
3. installment loan
This type of credit mix accounts for 10% of your score.
Did you think Identity Theft Protectionis unnecessary? Well you might want to think again. Dallas based actress Liz Mikel just found out the hard way that someone had stolen her identity and been having a field day. She stars in the NBC show “Friday Night Lights”, found out that identity thieves had went on-line and opened accounts in her name.
Mikel said that she went to the mail and to her surprise there was a notice from Capital One that there was a problem with an account she did not have. After a phone call to the company she had learned that someone had been opening accounts in her name since early March.
What you need to know Identity theft affects 9 million people every year, and is currently growing in epidemic proportions according to the FTC. Identity theftstarts with the theft of your social security number, your credit cards, and financial information. For Identity thieves this information is like gold.
Here is a variety of methods identity thieves may get a hold of your personal information: 1. Pretexting- The use of false pretenses to obtain your personal information from financial institutions, telephone companies, and other resources with your information. 2. Phising – They pretend to be financial institutions by send you e-mail or pop ups hoping you will reveal your personal information. 3. Old-Fashion Stealing- They steal wallets, credit cards, mail credit card offers, purses, financial statements, and new checks that come in the mail. They steal personal records and bribe employees who have access to your records. 4. Changing your address – They divert your mail by putting a change of address request in to the post office. 5. Skimming – They steal credit card and debit numbers by using a special storage device when swiping your cards. 6. Dumpster Diving – They go through dumpsters looking for mail that was not shredded with your personal information.
Examples of what identity thieves do once they have your information.
Bank / Finance Fraud
• They create counterfeit checks using your name and account number
• Open bank accounts in your name and write bad check
• They may clone your credit or ATM card and electronically drain all your accounts.
Credit Card Fraud • They may open credit cards in your name. When they will charge these cards up, and not pay the bill. As a result it appears on your credit report.
• They may change the address on your credit cards so that you no longer receive the bill, and run up charges on your credit cards. It may be sometime before you realize there is a problem.
Government Document Fraud • They may file fraudulent tax returns in you name
• They may use your name and social security number to get government benefits
• They may get a drivers license or id picture with your name but with their picture.
The Credit Scoreof Warren Buffet was recently reported to be a 718 by Fortune Magazine. You are probably wondering how in the world is this possible. He is supposed to be the richest man in the world.
When it comes to your credit scores it does not matter how rich you are, your credit score has nothing to do with how much money you have in the bank. No matter how much you have in assets, your credit score will always be determined by your credit history. The reason for Warren not having a credit score above a 720 could be for any number of reasons. Example: Late payments High balances on credit cards Inaccurate information being reported on credit report
We know that wealthy people can have applications for loans turned down just like anyone else. That is why your credit scores are very important. You never know when you might need a loan, don’t let your credit scores get you denied. This goes to tell you that your credit scores speak louder than dollars.
How to beat a millionaire. Here are some tips to increase your score; you never know a bad credit score could cost you that job that pays millions.
1. Never, never be late on your bills. The quickest way to lower a credit score between 100 and 150 points is to have a 30 day late on credit report. Set up on-line bill pay, that way you don’t have to worry about whether you are on time or not with obligations to your creditors. Unless you are rich, you will probably need a loan one day, and you don’t want a creditor to so no because of your score. 2. Limit yourself on how much credit you have. Don’t apply for ever credit card offer that comes. Typically you don’t need more than a couple of low interest rate credit cards. 3. Don’t charge up your credit cards like you are a Warren Buffett. To go out and max out your cards will cause a disaster for your future FICO score.
Identity theftis something that can be compared to burglary. Can you stop burglary? Yes and NO. You can put in a security system, window bars, locks, and security cameras, but there is no guarantee. Identity theft is the same way these days. There are preventive measures and solutions that you can implement to help out. Here is what you can do.
VIDEO about Identity Theft from the FTC.
1. Don’t carry around unnecessary information in your wallet. Such as social security card, more than one credit card, birth certificate and passport. Make a copy of everything in your wallet incase someone steals your wallet. Do this so you will know what to report stolen.
2. Don’t click on any e-mails from financial institutions even though you feel 100% confident it’s from your bank. Go to your web browser instead and type in the bank web address. Example (www.wellsfargo.com). Some of e-mails being sent out currently are fake and are called “phishing” e-mails.
3. Install virus and spyware detections software and keep them updated.
4. Take credit card receipts with you; never throw them in a public trash can.
5. Install lockable mail box at your residence in order to prevent mail theft.
6. Make sure you computer is set to automatically setup to download the latest updates and patches. Any computer software will have security holes in it.
7. Limit the number of credit cards you have.
8. Don’t have the bank send your checks in the mail, let them know you will pick up at the bank.
9. Destroy all checks if you close a checking account. Destroy or keep in a secure place any courtesy checks they send you.
10. Reconcile your checking account and credit card statements in a timely manner, and challenge any charges that are not yours
11. Memorize your usernames and passwords, don’t write them down. Be aware of your surroundings make sure no one is watching you enter in your pin number at an ATM.
12. Safeguard all statements from creditors, once paid shred them .You can always access your statement if on line.
13. Don’t throw away any credit card offers, shred them all. Go here to stop all credit card offers permanently.
14. If you don’t receive your billing statements notify the company immediately.
15. Pull your credit report regularly to check for any fraudulent activity.
16. Set up credit monitoring with one of the Bureaus.
17. Don’t allow your financial institutions to print your social security number on your checks
What is the current Crisis Over the last 10 years our country went through a real estate boom. There were three categories of loans being provided. The first was Prime, the second was Alt a, and the third was Sub-Prime loans. Typically any loan less than Prime had higher rates because of the risk of the borrower. The Sub prime loan was a creative loan that was provided and is currently the reason for around 46% of foreclosures in the U.S. This is astonishing if you think about it, and is the cause for a downturn in our economy. When you have this type of debt being wrote off, someone is affected. That is why our banking industry has had a liquidity problem. There were more loans being bought back than there was cash in the bank.
Insight on reason for foreclosures Most of the mortgages given during this real estate boom that were Sub-Prime were adjustable rate mortgages (ARM). This type of loan looked very attractive with its initial “low teaser rates”, which typically expired after 2 years. Most of these loans were set to reset between 2 to 5 years which would cause the payment to increase dramatically. The selling point on these loans over the years was, if you keep your credit rating good you can refinance your ARM loan into a 30yr fixed mortgage once the ARM reset. Unfortunately with the declining property values and the tightening up on underwriting guideline it has made it impossible to refinance these types of loans. The result is the mortgage payment will increase dramatically and a foreclosure to follow afterward s. Since all of this has taken place we are seeing global implications on foreign investors that might have put there stock in Mortgage backed securities. IN other words investors global wide are pulling there interest out of these types of loans. Since the book is still being written on this crisis we anticipate the overall economy to feel the strain of this unfortunate crisis and for ARM loans to be less common in the future.
What can I do about my current ARM loan? Here are the steps in regards to determining whether you can refinance your current loan.
* Determine if you have the current credit to refinance into a FHA loan.
* Determine if you have the equity to refinance your current mortgage
* Call your loan officer to determine if they can help you
If you feel you are not going to be able to afford your mortgage payment, call your lender before you are late on payments. Make arrangements with them rather than not notify them at all. If you find that your lender will not work with you there are counselors that you can talk to. Here is a list:
Hope Now An alliance between counselors (HUD approved), servicers and investors that strives to keep homeowners in their homes by helping them renegotiate their loans.http://www.hopenow.com/
Homeownership Preservation Foundation
A nonprofit that creates partnerships with local governments, nonprofit organizations, borrowers and lenders to help families overcome obstacles that could result in the loss of their homes.http://www.995hope.org/
Counseling Agencies Approved by HUD Developments
The U.S. Department of Housing and Urban Development (HUD) sponsors housing counseling agencies throughout the country that can provide advice on buying a home, renting, defaults, foreclosures, credit issues, and reverse mortgages.http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm
NeighborWorks Center for Foreclosure Solutions
Works to preserve homeownership in the face of rising foreclosure rates.http://www.nw.org/
Financial Education/Assistance
My Money Management A collaborative effort by the financial services industry to provide consumers with access to financial education to help inform their personal finance decision process.http://www.mymoneymanagement.net/
FHASecure plan A refinancing option that gives credit-worthy homeowners, who were making timely mortgage payments before their loans reset but are now in default, a second chance with a FHA insured loan product.http://portal.hud.gov/
Here are some helpful tips for avoiding foreclosure from U.S. Housing and Urban Development.
Did you think checking your credit report was not necessary? I would think again, recent studies show most employers are checking your credit as part of the decision process. They are looking into your personal history is to see if you are responsible enough to hold a job. Companies don’t want to hire someone that is financially tapped out; someone that is in this situation might be desperate and attempt to steal. Jobs that involve money handling
A position that involves an employee handling money will typically require a credit report check. These companies do a background check as well. If a company is hiring you to handle there money, they want to make sure you are very responsible. There are accounts where potential employee applied for a position with a company as was denied employment due to bad credit. If you think your credit report is littered with collections, charge offs and late payments you might want to work on cleaning those types of issues up. This type of activity whether it’s a professional job or a cashier job could cost you a potential opportunity.
Government Jobs When the government looks into hiring an individual they pull your credit report. They want to make sure you are not a security risk. They also pull your credit after you have been hired. Judy Langley was hired at by the “City of Dallas” for a clerical position. The requirement was once she was hired she had to improve her credit. The city hiring manager knew she had some credit issues, and required that she improve her credit over a 12 month period. In other words if you have past credit issues, your new employer could require you to clean it up. Your Rights under the Fair Credit Reporting Act (FCRA) The FCRA requires written consent on your behalf before an employer can pull your personal credit score report and/ or background check. Nether less if you suspect you have credit issues, and you are in the market to find that dream job you might want to pull a recent copy of your report with scores. Everyone looks at your credit scores as well. When an employer uses your credit report as part of the hiring process, they are suppose to inform you of this. If they deny you employment due to your credit, they are supposed to do two things:
* The employer is supposed to give you a copy of your credit report and give you your rights under the FCRA.
*The employer is also to disclose which company gave the information so they can dispute any information that might be inaccurate.
Rather than go through all of this they will simply say you were denied for other reasons.
Find out what’s on your record This is why it’s so important to pull your credit report regularly, so if you have to get a new job or your current employer is doing credit checks, you don’t want to have issues due to bad credit decisions.
A credit score is a number that reflects your creditworthiness at any given time. Typically the higher your score the better your credit. Individuals with higher credit scores typically can obtain mortgages, credit cards, loans and insurance with better terms. The lower your score the worse your terms are on any offer. The Credit Score is based on the information stored with in your credit report.
Each Bureau has its own score Each Bureau has its own name for the FICO® Score.
The general scoring ranges between 300 – 850. Fair Isaac divides the scores into five categories.
780 – 850 – Low Risk
740 – 780 – Medium – Low Risk
689 – 740 Medium Risk
620 – 690 – Medium High Risk
620 – and Below – High Risk or “sub-prime.”
A credit score can change quickly for several reasons, including late payment or big increases in credit card balances. Each credit bureau may not have identical information about you, in large part because some creditors only report to one or two bureaus instead of all 3. This results in different credit scores amongst the credit bureaus. Some insurers and creditors use there own formula to calculate score in conjunction with the FICO score model. For example one lender might emphasize more on payment history within the credit report, where another lender might focus on something totally different within your report. A credit score itself might be the determining factor of better rates and terms with other creditors. But in the insurance context, the “credit-based insurance score, “typically is on of the many factors determining whether a policy is underwritten or at what premium. Most lenders and insurance companies scan your credit report for derogatory terms like bankruptcy, judgments, foreclosures, and collections.
How is a credit score calculated?
Factor 1: Payment History (35%)
Factor 2: Amount Owed – Extent of Indebtedness (30%)
Factor 3: Length of Credit History – The Longer, The Better (15%)
Factor 4: How Much New Credit? (10%)
Factor 5: Type of Credit (10%)
Foreclosure is a common subject these days, but there is life after having one. If you have recently had a foreclosure on your credit report, you will be able to recover from this bad experience. Fair Isaac with its new FICO 08 with due time will forgive you for a foreclosure as long as you are not a repeat offender. This new calculated risk software understands that unfortunate situations come up in ones life, but don’t make the same mistake again. Definitely don’t make it a habit of having credit problems is the point.
How long will it take before you can buy again? Your credit report might recover quickly as long as you have other good standing credit reporting on your credit report. But that does not mean you can buy a home right a way. Most people that have foreclosures usually take time to recover from such a bad experience. HUD knows this, and that is why you cannot get a FHA loan for a minimum of three years from foreclosure date. It’s almost impossible to get a Conventional loan, because conventional loans are automated approvals. Typically with a foreclosure, collections or low scores this automated software will deny you. FHA is a different type loan all together, since it’s a government insured loan you can get what they call a manual underwrite for this type of loan. What this means is if the automated process through Freddie Mac or Fannie Mae says no, you can get an underwriter to manually approve the loan. So you can expect to wait at least a minimum of 3 years after foreclosure date before you can begin to think about financing a home again.
Pay everything on-time When a bank lends you money, it’s a big risk. Banks don’t want to lend money to someone that has total disregard for their credit. If you have had a recent foreclosure the last thing you want to do is have late payments, collections or any other negative information hit your credit report. Let’s face it, the whole reason banks, mortgage companies, car dealers, landlords, and employers pull your credit report is to see if you pay your debts. I personally would not lend to someone that did not pay their bills back, would you? With the recent tightening up in the lending arena you might want really work on increasing your credit score. Also make sure you have at least 3 lines of credit reporting on your report. If you had to let everything go, you might consider getting a secured credit card. This type of card will help you re-establish your credit.
Save Money Saving money is very important when it comes to getting a loan. Lenders like to see you saving money because it shows stability. Let’s assume you loose your job, well if you have 6 months payments in the bank you are less likely to let your house go. If a emergency comes up you have some money in the bank to assist in some way. Saving money also shows you are responsible as well. Let’s say two people go to the bank to get a loan and they both have bad credit. The main difference between the two bad credit borrowers is one has $5000.00 in the bank. Who do you think the bank is more likely to approve? These are some key point I wanted to touch on to revive your credit after a foreclosure. There is life after so make sure you manage your credit report and credit scores so you can begin home ownership soon.
Disclaimer: This information has been compiled and provided by CreditScoreQuick.com as an informational service to the public. While our goal is to provide information that will help consumers to manage their credit and debt, this information should not be considered legal advice. Such advice must be specific to the various circumstances of each person's situation, and the general information provided on these pages should not be used as a substitute for the advice of competent legal counsel.
