5 Demystified credit repair myths every debtor must be aware of

Do you have bad credit and are you looking for ways to repair it without putting much extra effort? If answered yes, you must be aware of some particular credit terms like credit repair. Credit repair is nothing but restoring your credit score and emerging creditworthy to obtain favorable lines of credit in the near future. Apart from the easy and effortless ways to improve your credit score, there are some credit repair myths too that are believed by most people who are looking for credit repair services. If you too are someone who is geared up to repair your credit, you must first be aware of the credit repair myths so that you’re able to boost your credit score without taking any wrong decisions.

Myth No. 1: You need a third party organization to repair your credit

Truth: While a credit repair firm can help you out, it is just possible to repair your credit on your own. Most studies show that among 90% cases of credit repair are all due to mistakes that are committed by the credit bureaus. By disputing the erroneous information, it is quite possible to boost your credit score on your own. Before taking help of a pro to repair your credit, think twice as this can easily be done on your own.

Myth No. 2: Credit scores are always the same from all credit bureaus

Truth: You must be aware of the three credit bureaus, TransUnion, Experian and Equifax. But if you’re misled into believing that the score that you obtain from all the credit bureaus is all the same, you’re grossly mistaken. Each store, agency or bank with whom you deal will use different credit bureaus. It may happen that your grocer uses TransUnion while your dentist uses Experian. Therefore, as you pull out a copy of your credit report from all the three credit reporting agencies, you will get a different score. Differences can often be as good as 80 points.

Myth No. 3: Checking your credit score may cost you some points

Truth: This is partially a myth as checking your credit online by signing up with the website of any of the three credit bureaus will not hurt your score as this will be considered as “soft inquiry”. Unauthorized checks by companies including the credit repair firms may also not hurt your score. On the other hand, if you’re applying for loans from companies and they want to check your credit score, this will cost you some points.

Myth No. 4: Shopping around for loans may hurt adversely affect your credit score

Truth: You, as a debtor, must be aware of the fact that most credit bureaus will classify credit checks within a 12 day period to be a single inquiry. This rule has been designed specifically so that the people can shop around for a reasonable loan without putting their credit score at stake. Thus, if you go to a lending institution on two consecutive days, the credit bureaus will consider this as one single enquiry.

Myth No. 5: Credit repair only deals with removing erroneous information

Truth: Sure, credit repair does involve removing all the erroneous information but that doesn’t mean that it is all about removing the wrong information. You also have to keep on paying off your high interest debt and lessen your debt burden so that you can boost your credit score and become creditworthy.

Thus, if you’re keen on repairing your credit score, you must make yourself aware of the myths mentioned above. Stay aware of all the credit terms so that you are not hoodwinked by the financial institutions.

Student Loan - 6 Ways To Get Your Student Loan Out of Default Status

Ever wonder how many days you could be late on your student loan payment before you are considered in default status. Well, you are considered in default once your payment is 270 days behind. Once this takes place, the lending institution can come after you with the power of the government. The entire balance of the loan will become due. You will not be eligible for a deferment or forbearance. There is no statute of limitation on collections. You can't discharge the loan in bankruptcy. You can't get further loans. The school may withhold your transcripts, and your tax refund will be intercepted. Your wages can be garnished. Your credit report will be damaged, collection fees will be added to your balance, liens can be placed on your personal and real property, and your bank accounts and other assets can be seized.

How do I get out of default status?

• Ask the lender for a payment plan based on your income.
• Try to get into the loan rehabilitation program. With this plan, you make 12 on time payments, and then a new lender will buy your loan providing you with a fresh payment plan and a lower monthly payment.
• Consolidate all of your defaulted loans. You will get a better interest rate and payment plan under a different lender.
• Settle your balance by seeking a compromise with the lender.
• File for bankruptcy after proving undue hardship. You must show that your present income is too low to pay the loan, and there are various steps you must take to prove your case.
• File a Chapter 13, and your interest, collection attempts, wage garnishments, and tax refund interception will stop while you are paying back your loan.

As you can see defaulted on your student loan could have a tremendous negative effect on your personal and financial life. When you are in default status, most lenders will assist you with bringing your account current. However, you have to take action and use one of the above techniques that fits your situation.

How to Write a Convincing Debt Negotiation Letter Article Source: http://EzineArticles.com/5794077

Let me ask you a question. Are you searching for a way to reduce your bills through some form of settlement? If so, you may have an understanding of what a debt settlement letter is, and how it could help you financially. You can also look at these letters as a powerful debt negotiation tool.

These letters are very straight to the point and persuading. They could be used in court if either party broke their agreement. These letters are very important if you expect handling debt negotiations yourself and not employ a third - party company. In the planning stage of negotiations, you must understand how to craft a convincing letter that gets results. Understand that a convincing letter is one of your secret weapons to reducing your debt load in a big way. Keep in mind that you must convince the lender that it is in their best interest to settle with you. This in returns lowers your debt.

Right before send out your first letter to the lenders or collectors, make sure that you have a basic knowledge on how the game works. You have to know the ends and out of debt settlement because the creditors and collectors are masters in this area. Here are a few tip you can use when crafting your convincing debt settlement letter.

1. Because the debt settlement letter could be used in court, have an attorney review it to make sure all terms are accurate.

2. You can also seek the advice of a friend who has successfully negotiated debt with these types of letters.

3. Make sure you understand the terms and conditions that you are asking for in the letter.

4. Include what you want eliminated like, fees, taxes, and interest rates.

5. Include the total amount you can pay in the settlement.

6. Let the creditor know that in exchange for the payment, you want the negative item deleted from your credit report.

7. Creditor's know most of the strategies used by consumers and debt settlement companies, so do not try to trick them with words like if you do not accept my payment, I will file bankruptcy. Instead, say that this is all the money I have, and I am are currently unemployed.

Here is a sample debt settlement letter that you can use as a model to write your first letter.

Your name:

Your address:

Address of the creditor or the collection agency:

Date:

Reference account number:

Dear creditor or collection agency,

In the last six months, I have been facing hard times with a lost of my job, my mother passing away and my brother going to jail. I sincerely apologize for falling behind on my debts, but I assure you my neglectfulness was circumstantial. Now that I have a job, I'm ready to settle my outstanding debt, and I would like to offer you 20 cents on the dollar (put a dollar amount here) for a deletion of all negative information from my credit report and no further collection activities. Currently, I'm in negotiations with other creditors on a similar deal, and I would like to close my account with you fast. If I receive a signed agreement from you, I will gladly send payment out overnight.

Sincerely,

Your signature here.

In summary, know what you owe and then compare it to what you have in your bank account. By doing this, you will know where to start with your negotiations. In addition, some creditors will ask for 80% of the balance but this is just a starting point of the settlement. You do not have to have that amount to settle with as it is just the start of negotiations. Your letter must be accurate due to its legal nature, and always double - check the terms and conditions of the letter before sending it out. Now that you are empowered with more information, go out there, and take action.

Mark Clayborne is a Certified Credit Consultant with ten years of experience assisting consumers with credit issues. For more powerful secrets on credit repair, debt settlement, stopping collectors, rebuilding your credit, and raising your score, please read the first chapter of The Guide to credit and get a Free Restore your Credit E-class at http://www.hiddencreditrepairsecrets.com

Student Loan Garnishments - Secrets Revealed on Student Loan Garnishments

In this economy, it is becoming more common for people to be unable to afford their student loan debts. When you have no income and are forced to choose between making a payment and feeding your family, a loan debt can understandably be set aside. However, by not paying your debt, you are leaving yourself vulnerable for a student loan garnishment and possibly a higher overall debt.

What is a student loan garnishment? A student loan garnishment is when your loan payment is taken out of any income you have. This can easily be a paycheck (if you have become re-employed) or an income tax refund.

How does this happen, you wonder? Well, the IRS can legally intercept if you default on your loans. This is one of the most popular ways the Department of Education collects from defaulted loans. In fact, they claim to receive millions of dollars annually through this avenue. This is usually the most common way that government issued loans are repaid if they are defaulted on.

Another way a loan garnishment happens is through your paycheck. How this works is a set amount comes out of each paycheck, via your employer, and goes straight to the loan lender until your debt is fully paid. While no lender can request more than 15% of your disposable income or 30 times the federal minimum wage limit, this can definitely leave you financially vulnerable.

Student loan garnishments can also come via any federal benefits you may have, including Social Security retirement benefits and Social Security disability payments. Again, there is a limit to what can be taken of no more than $750 per month. This student loan garnishment through your retirement and disability income would continue until the debt is paid in full.

The final common way a student loan garnishment takes place is through a lawsuit. Both the federal government and private lenders can take you to court to try to get your loan payments made. This can be even more costly than the initial debt, as court costs and lawyer fees are often tacked onto the full amount. The final judgment amount usually ends up on your credit record and will cause you to have to make higher payments than you originally had.

In short, even if your income is limited, it is beneficial to continue making loan payments. Discuss with your lender your current financial situation and you might be able to get the monthly payment amount temporarily lowered. Now that you are empowered with more information, go out and take action.

How to Write a Convincing Debt Negotiation Letter

Let me ask you a question. Are you searching for a way to reduce your bills through some form of settlement? If so, you may have an understanding of what a debt settlement letter is, and how it could help you financially. You can also look at these letters as a powerful debt negotiation tool.

These letters are very straight to the point and persuading. They could be used in court if either party broke their agreement. These letters are very important if you expect handling debt negotiations yourself and not employ a third - party company. In the planning stage of negotiations, you must understand how to craft a convincing letter that gets results. Understand that a convincing letter is one of your secret weapons to reducing your debt load in a big way. Keep in mind that you must convince the lender that it is in their best interest to settle with you. This in returns lowers your debt.

Right before send out your first letter to the lenders or collectors, make sure that you have a basic knowledge on how the game works. You have to know the ends and out of debt settlement because the creditors and collectors are masters in this area. Here are a few tip you can use when crafting your convincing debt settlement letter.

1. Because the debt settlement letter could be used in court, have an attorney review it to make sure all terms are accurate.

2. You can also seek the advice of a friend who has successfully negotiated debt with these types of letters.

3. Make sure you understand the terms and conditions that you are asking for in the letter.

4. Include what you want eliminated like, fees, taxes, and interest rates.

5. Include the total amount you can pay in the settlement.

6. Let the creditor know that in exchange for the payment, you want the negative item deleted from your credit report.

7. Creditor's know most of the strategies used by consumers and debt settlement companies, so do not try to trick them with words like if you do not accept my payment, I will file bankruptcy. Instead, say that this is all the money I have, and I am are currently unemployed.

Here is a sample debt settlement letter that you can use as a model to write your first letter.

Your name:

Your address:

Address of the creditor or the collection agency:

Date:

Reference account number:

Dear creditor or collection agency,

In the last six months, I have been facing hard times with a lost of my job, my mother passing away and my brother going to jail. I sincerely apologize for falling behind on my debts, but I assure you my neglectfulness was circumstantial. Now that I have a job, I'm ready to settle my outstanding debt, and I would like to offer you 20 cents on the dollar (put a dollar amount here) for a deletion of all negative information from my credit report and no further collection activities. Currently, I'm in negotiations with other creditors on a similar deal, and I would like to close my account with you fast. If I receive a signed agreement from you, I will gladly send payment out overnight.

Sincerely,

Your signature here.

In summary, know what you owe and then compare it to what you have in your bank account. By doing this, you will know where to start with your negotiations. In addition, some creditors will ask for 80% of the balance but this is just a starting point of the settlement. You do not have to have that amount to settle with as it is just the start of negotiations. Your letter must be accurate due to its legal nature, and always double - check the terms and conditions of the letter before sending it out. Now that you are empowered with more information, go out there, and take action.

Mark Clayborne is a Certified Credit Consultant with ten years of experience assisting consumers with credit issues. For more powerful secrets debt settlement, please read the first chapter of The Credit Ebook Book and get a Free Restore your Credit E-class at http://www.hiddencreditrepairsecrets.com

Sample Dispute Letter - Can You Show Me One?

When using sample dispute letters, enter the information in the letter as directed. Make sure you put your report number at the top of the letter. Within the sample dispute letter, enter the reason for your dispute. You can find various valid reasons to dispute by cafefully viewing your credit report. Retype and print out the first dispute letter and then sign it. Make a copy of each credit report with the negative items circled and send it with your first letter. Include any proof that will help validate your claim, like receipts stating the item was paid.

Include a copy of your driver's license and a recent utility bill that displays your name and address, as the credit bureau needs this information to verify your identity. Every time you send sample dispute letter, send a copy of your credit report with the negative items highlighted. Mail your letters certified mail with a return receipt to establish a paper trail just in case you have to sue the credit bureau for failing to investigate your disputes. Send your letters to the following credit bureaus listed below.

Experian
NCAC PO BOX 9701
ALLEN TX, 75013

Equifax
PO BOX 105518 

ATLANTA GA, 30348

Trans Union
PO BOX 2000
CHESTER PA 19022

A sample dispute letter looks like this.

Your Full name:
Your Address:
Your Date of Birth:
Your Social Security number:
Report Number:
Date:

Dear Credit Bureau

I'm writing to let you know that your company is reporting inaccurate credit information on my credit report. The FCRA ensures that bureaus report only 100% accurate information. Therefore, I would like for the following information to be investigated.

Account one:
Account two:
Account three:

Please delete this misleading information, and supply me with a corrected credit report within 30 days.

Sincerely,

Print your name here.

Sign your name here.

Mark Clayborne is a Certified Credit Consultant with ten years of experience assisting consumers with credit issues. If you liked this article, then please sign up to read the first chapter of The Credit Repair Book/HCRS and get a Free Restore your Credit E-class at http://www.hiddencreditrepairsecrets.com This article may be freely reprinted or distributed in its entirety in any Ezine, newsletter, blog, or website. The author's name, bio and website links must remain intact and be included with every reproduction.

Disputing Your Credit Report - How Can I Remove Negative Items From My Credit Report?

Disputing your credit report can be a time consuming process. Using the dispute process to remove negative items off of your credit report can be frustrating. Nevertheless, it is one of the best ways to get negative information off of your credit report. Starting with the basic dispute process is quite often the fastest and most effective way of disputing your credit report.

Now that you have your reports in front of you, make sure to check the personal information section and check that all entries are correct. Check your name, date of birth, present, and past address, current and past employer, and social security number. After you have verified your basic information, you should scan all three reports and circle or highlight any errors you find. 

Scroll down each report and check for any errors or discrepancies regarding accounts, or 

inquiries.

Here are some important red flags to look for:

When disputing your credit report look for discrepancies regarding accounts and inquiries:

Unauthorized users
Customers listed as deceased
Former spouse name
Negative accounts from your divorce
Negative co-signed accounts
Unauthorized inquires
Illegally re-aged collection accounts (which report an incorrect last date of activity)
Foreclosure attempts
Consumer credit counseling loan indications
When disputing your credit report look for Discrepancies regarding balances and accounts
Balances incorrect
Credit limits listed incorrectly
Duplicate collections
Accounts listed incorrectly
Credit lines not listed
Paid accounts still showing that you owe
Closed accounts shown open
Closed accounts should say closed by consumer and not closed by the creditor

When disputing your credit report look for Discrepancies regarding negative trade lines:

Late payments, 30, 90, and 120 days
Collections
Charge offs
Tax liens
Judgments
Debt consolidation marks
Bankruptcies not saying withdrawn or dismissed
Repossession indication when it should say voluntary surrendered

Now, before you start trying to repair your credit report, let me tell you what the law says about disputing your report.

The Fair Credit Reporting Act regulates how the credit bureaus handle your report under § 611. For procedures in cases of disputed accuracy [15 U.S.C. § 1681i], the law states that if you dispute the accuracy of any item or data in your reports, the credit bureau shall conduct a reasonable investigation within 30 days to determine if the challenged item is correct.

After the 30 days have expired, if the credit bureau has not verified or completed the investigation, the disputed item must be deleted. There you go, that is the law, and you will use it to start your dispute process.

When disputing your credit report, you can write your own dispute letter or use a standard dispute letter that you find on the internet. If you decide to write the letters, you must include your full name, date of birth, address, social security number, the items you're disputing, the reason you are disputing them and your signature at the bottom. Once you have your letter s are ready, send them to the following agencies:

Experian
NCAC PO BOX 9701
ALLEN TX, 75013

Equifax
PO BOX 105518 

ATLANTA GA, 30348

Trans Union
PO BOX 2000
CHESTER PA 19022

Mark Clayborne is a Certified Credit Consultant with ten years of experience assisting consumers with credit issues. If you liked this article, then please sign up to read the first chapter of The Credit eBook/HCRS and get a Free Restore your Credit E-class at http://www.hiddencreditrepairsecrets.com This article may be freely reprinted or distributed in its entirety in any Ezine, newsletter, blog, or website. The author's name, bio and website links must remain intact and be included with every reproduction.

Article Source: http://EzineArticles.com/5549585