Archive for the ‘Credit Repair’ Category

For victims of identity theft, the experience of losing a good credit score can be crippling. The lasting effects are just as bleak as those with bad credit; identity theft victims also face the potential of denied loan applications, lost opportunities, and high interest rates.

Despite the unfortunate circumstances that surround identity theft, credit repair is an option – just not an easy one. Many people spend countless hours and thousands of dollars attempting to improve their credit score and restore their good name. However, this doesn’t mean you should give up. Good credit is important, and there are ways to fight for it.

What should I do first?
According to the Federal Trade Commission, there is a long list of steps to take after realizing that your identity has been stolen:

1. Contact one of the consumer reporting companies (Equifax, Experian, or TransUnion) immediately. They will place a fraud alert in your credit file and notify the other companies to do the same.

2. Obtain and review your credit report. Make note of any charges you did not make and call to ask your creditors (e.g., your bank, retail stores, etc.) to freeze or cancel your accounts. In future months, you should continue to check your credit report periodically to make sure no other fraudulent accounts have been opened in your name.

3. File a report with your local police station. Ask for a copy in order to verify the date and time it was filed.

4. File a complaint with the Federal Trade Commission. This will help the police to track and hopefully locate the person or people who have committed this crime.

How do I repair my credit?
Even after taking the necessary first steps, the process of cleaning up your credit is long and difficult. In order to have fraudulent charges removed from your credit report, the Fair Credit Reporting Act (FCRA) requires you to contact both the consumer reporting company and your creditors. You must supply them with a copy of your Identity Theft Report and a letter highlighting the fraudulent charges. From there, the consumer reporting company will decide whether to block and expunge the charges from your record. If, however, they choose to deny your claims, the charges will remain on your credit report and you will be responsible for paying off charges you did not make. If this happens, you will be forced to go through a frustrating dispute process to further prove that your Identity Theft Report is accurate.

Need Help?
If you don’t want to handle this process alone, ask for help. Credit repair companies handle identity theft cases on a regular basis and are equipped with the expertise needed to represent you during an often stressful and emotional time. As the victim of a crime, you should not be forced to spend your time defending yourself and your innocence. Focus on your life and let experts focus on your credit score.

The statistics on the number of marriages that end in divorce are varied and open to interpretation, but what is certain is no one who enters a marriage with the person they believe to be their perfect match plans to experience the agony of dissolving the union.

As exhilarating as it is when you think you have found the person you will spend the rest of your life with, the realization that it is not meant to be is just the opposite. And if it wasn’t enough that the lifestyle two people have worked so hard to create is torn apart, a divorce can also wreck havoc on a person’s credit score. After the emotional and monetary sting of a divorce has started to subside, many people find they have also lost their good credit rating along the way.

The credit reporting system leaves much to be desired when it comes to accounting for a divorce and this is what makes a divorce one of the five credit killers according to the book “Credit Revolution: Path of the Smart Consumer.”

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The credit reporting system isn’t perfect. Just ask Ken Clark from Little Rock who was turned down for a vehicle loan and accused of being a con man by the auto dealer because his credit report was marked “deceased”.

Credit reporting errors like these are surprisingly common, and this makes sense in a system where so much information is exchanging hands everyday. Even errors with a “one in a million” chance of happening will happen 3,500 times every month when you factor in the 3.5 billion pieces of account information the credit bureaus receive from lenders per month.

Then factor in systemic flaws in the system and credit errors are much more common. For example, the algorithms used to match loans to credit files use partial matches in some cases. Because of this, someone else’s loan could end up on your credit reports if your name and Social Security numbers are very similar.

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Daniel from New York wrote into CNBC’s “Ask The Experts” feature with the following question:

“Are there ANY credit repair companies that are legit? I’ve used a couple and both times they have been scams. I obviously won’t do it again but people should be aware if they are all trying to rip you off!!”

His concern is valid. There are all too many credit repair clinics out there who are much more interested in separating you from your cash than in helping your credit situation. But the response he received is even more concerning.

In her response to Daniel’s question, Carmen Wong Ulrich host of the program “On the Money” states:

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The USA.gov website has a recently updated list of popular New Year’s resolutions. As evidence of how important credit is in today’s society, two of the first three resolutions listed are related to your credit standing.

The top five New Year’s resolutions listed on the page are to lose weight, manage debt, save money, get a better job, and get fit.

If these are among your New Year’s resolutions then it is in your best interest to pay special attention to your credit score in 2009. By increasing your credit score, you may be able to get approved for lower interest rate loans or credit cards. Refinancing your mortgage at a lower interest rate than you are currently paying could end up saving you hundreds of dollars every month which would not only help you achieve your resolution of saving money, but it could give you a great head start on managing your debt.

Add to this that in some cases, a good credit score is required for you to get approved for that new dream job and there’s one more New Year’s resolution where your credit comes into play.

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