Archives for "Collections"
Crazy Credit Repair Collection Facts
Many Collections are Not Valid
Many people in credit repair programs need some level of help with collectors. Between phone calls, dunning letters, and the often cryptic list of debts that appear on credit reports, it can be problematic to identify legitimate debts and determine the best course of action.
A Unique Breed of Collector
There is a unique breed of collector that specializes in buying and dunning ancient collection accounts; debts over seven years old. These accounts are unattractive to first level collectors as they are beyond the statute of limitation for enforcing through the courts. They are also beyond the credit bureau reporting period limit.
Profiting From Ignorance
Of interest to anyone in a credit repair program, the age of the debt means that legal action can be neutralized by the statute of limitation defense, and any threat of reporting to the credit bureaus is not valid. The lack of legal leverage does not stop these collectors from vigorously practicing their craft. In fact, these last-chance collectors represent the most profitable part of the collection industry!
Credit Repair Education Pays
What is their secret? They prey on consumers who do not know their rights. If you are contacted by a collector about an ancient debt, just examine the statute of limitation, check out the reporting period limit, and send the collector a cease communication letter. They will go away forever. There are many great credit repair resources online. A little education goes a long way!
Another Common Quirk
While a bit of credit repair education can arm you with the knowledge you need to vanquish these collectors of ancient debt, there is another type of collection account that can be eliminated quickly with a dispute letter, if you know what to look for…
Compliance Failures
A significant percentage of all collections on credit reports fall into a very special category. These accounts are everywhere. Left alone they can linger for years, in some cases decades. They have the power to depress the credit scores of their unfortunate victims, often dramatically. And they should not be reporting.
Failure to Vacate
Collectors buy and sell debt. Over the last decade this practice has become commonplace, and much more frequent. Many collectors will sell an account in as little as six months if it does not pay. When an account is sold the collector is supposed to vacate all credit bureau reporting. Sadly, this often does not happen. And yet a little credit repair could eliminate the offending account completely.
The Credit Repair Solution
If you have collections on your credit report, it is fairly certain that you are a victim of this type of defunct account. Credit repair is the answer. The first and most obvious indication is the presence of more than one collection account for the same debt. If you examine your credit report and find several collections for the same debt, all but one is erroneous. And the last one may be too!
The Value of Vigilance
Given the speed at which collectors churn their portfolio these days. It is quite feasible that even the most recent collection on your report is in error. Once you remove all of the duplicates, examine the last, most recent, account. It may be legitimate, but if the reporting date is over six months, or if you have been contacted by a different collector since the reporting date, it may be a candidate for credit repair as well. Good luck!
Copyright © 2010 Sky Blue Credit Repair. All Content. All Rights Reserved.
Easy Credit Repair Clean Up Candidates
Think Twice
Credit repair is not about getting rid of genuine derogatory information on your reports, but before you decide what is genuine and what is not, you should think twice. There may be some issues you have to live with until the reporting period, usually seven years, has passed, but you may find that some of the items which look accurate have no business being on your report.
Accept Nothing Blindly
Many people make the mistake of accepting the presence of negative information on their reports simply because it looks familiar. In the present credit environment, where every single point in your credit score translates into money in your pocket, you cannot afford to accept anything without putting it under the microscope of credit repair.
Common Culprits
Commonly neglected derogatory information most often prone to reporting errors includes: overstated revolving balances, closed accounts reported as open, duplicate accounts, and collections, once accurate, but no longer allowed to report. All of these are prime and often easy credit repair candidates. All of these can be removed from your reports.
Overstated Balances
Overstated revolving accounts are often neglected in the credit repair process as the account may in every other way look fine. The single erroneous balance figure is easily overlooked in a cursory examination, and yet, this single innocuous error can knock the wind out of your credit score. High revolving balances hurt. Overstated balanced should be corrected.
Closed or Open
Closed accounts which continue to report as open can likewise be eliminated. You must examine your reports very carefully as you pursue your credit repair project. Creditors often continue to show accounts in an open status, often with balances, for years after they have been closed!
Mysterious Duplicates
Duplicate accounts, like the above two cases, may not be spotted, especially by those scouring for derogatory issues. But like overstated balances, these accounts can overstate your obligations and lower your scores. Put your credit repair knowledge to work and erase these extraneous accounts.
Collectors Out of Compliance
The last of these sneaky candidates for credit repair is the most insidious, erroneous collection accounts. Spotting these little devils can be difficult unless you know exactly what to look for. By law, collectors are supposed to cease the reporting of a debt at the time that they no longer own it. Many collectors will sell accounts if they cannot collect in the first six months. This should trigger an end to their reporting, but do not hold your breath.
Spotting the Offenders
One way to spot these incorrect lingering collection accounts is easy. If more than one collector is reporting a single debt, the oldest one should be disputed and removed with credit repair. This does not mean that singular occurrences are correct! The most recent collector may have sold the account too. You may opt to challenge these collections as well, but please do your homework first.
Research Comes First
Before including any questionable collection in your credit repair effort you should do a bit of homework. Try to recall everything you can about the original event. If you can remember the original date of default you can calculate the statute of limitation (SOL). If the debt is beyond the SOL you can dispute without fear of the collector prevailing in a lawsuit. Credit repair works, but carefully!
Copyright © 2010 Sky Blue Credit Repair. All Content. All Rights Reserved.
Debt Validation Tips for Credit Repair Success
Introduction
Debt validation is a powerful credit repair tool, but like many credit repair techniques it must be approached properly to get the optimal outcome. When done right debt validation can provide wonderful results including proof that the collector has the legal right to collect and an accounting of the amount due. And there are many cases when the collector, unable to provide the documentation required, will quietly vanish from your life.
Respond to Collection Letters Quickly
Collection letters must include, or be closely followed by, a written notice including your right to dispute the debt within 30 days. It is important to know that collectors do not like to validate debt or process credit repair demands. From a collectors perspective they are playing a numbers game; they want to send out collections letters and collect money. They would rather not tangle with debtors over the details. If you do not dispute the debt within the 30 day period allowed the collector is likely to ignore your request.
Credit Repair Options
Once you have a collection notice in hand there are a couple of credit repair strategies you should consider right away. If you don’t recognize the debt you have the right to request the name and phone number of the original creditor. Collection notices are supposed to include the name of the creditor to whom the debt is owned, however in the case that the debt has been sold and resold the original creditors name may not be indicated. But if you do recognize the debt you should research the statute of limitation before going any further.
Statutes of Limitation
The statute of limitation (SOL) for the collection of a debt is the maximum period of time that a collector can file a lawsuit. To be precise, a collector can file a lawsuit after the SOL has passed, but should they do so you can have the suit dismissed on this basis. It is important to your credit repair effort to know that the SOL clock starts on the day that you first become delinquent. This means that you need to count from the first time you missed a payment in the sequence that led to the chargeoff or collection status. SOLs are state and debt type specific and are easily found on the Internet.
Negotiation Opportunities
If the subject collection is beyond the SOL you are pretty much in the clear. You can choose to contact the collector to negotiate the debt if you wish. Those looking for the best credit repair outcome may want to take the opportunity to negotiate for complete account deletion. Once a collector knows that you are aware of the SOL they should be extremely willing to settle. You also have the option of ignoring the debt. The reporting period limit will roll around and the debt will fall off your credit report. If you decide to ignore the debt and the collector continues to contact you, you may opt to send them a cease communication letter, another useful credit repair tool. Once they receive this they will stop all communications.
Validate the Debt
Assuming that you decide to validate the debt you must do so in writing. Keep your request as simple and clear as possible. As with all credit repair communications, do not go into a story or explanation. Just ask for validation of the debt. I strongly recommend that you specifically list the documents and information you want them to send you. Ask them for proof they have the legal right to collect the debt, a detailed calculation of the amount claimed owed, and a copy of your original signed contract or account agreement.
Right and Wrong Results
If a collector cannot validate the debt they should stop collecting and not report to the credit bureaus. This happy credit repair outcome occurs quite often. But it does occasionally happen that they send nothing more than an internal printout or some such thing, and then continue their collection efforts. This can make your credit repair project difficult. There is ample case precedent to support the argument that a collector must provide the documentation listed above, but you may have to go to court to get satisfaction. If you reach the point where you are ready to get into a legal battle you should consider consulting an attorney so you are fully prepared when you get in front of the judge.
Credit Repair Help
If you begin your debt validation journey on your own and find that you are confused you should reach out to a credit repair service where a professional will review your entire case, research the SOL, prepare and send the letters as needed to get the best possible results. You do not have to do it alone. Reputable credit repair services are extremely affordable and will insure that the job is done properly. Good luck!
Copyright © 2008 Sky Blue Credit Repair. All Content. All Rights Reserved.
Eliminate Collections with Credit Repair
Say Goodbye to Collectors
Credit repair is not hard. Take the time to learn your legal rights and you will see how easy it can be. Have you ever been bothered by a collector? Are there collections on your credit report? Let’s take a look at some powerful credit repair tools that can help you get collectors out of your life and off of your credit report. For real and forever.
Educate Yourself
The collection industry thrives on consumer ignorance. The less you know, the more money collectors make. A little credit repair education can save you thousands of dollars and free you from the fear of dealing with collectors. If you want to take control you need to know two things: 1) How statutes of limitation really work, and how you can use them to get collectors off of the phone and out of your life, and 2) How reporting period limits are so often violated, and what you can do to protect yourself and clean up your credit report. Let’s do some credit repair!
Credit Repair and Statutes of Limitation
Statutes of limitation (SOL) define the time limit legal action can be taken. In the case of a collection it defines the time limit that a collector can collect through the court system. Once the SOL has expired for a debt the collector cannot sue you or get a judgment. The SOL has nothing whatsoever to do with the reporting period limit for the derogatory information. And in most cases the SOL is significantly shorter than the reporting period limit. SOLs are state and debt type specific and can be easily located on the web. By the way, you need to check both the state in which you entered into the obligation and your current state of residence and apply the longer SOL. Let’s turn this info into credit repair gold.
Using Your Statute of Limitation
There are two credit repair advantages to be gained from understanding the SOL. If a collector contacts you about a debt after the SOL has expired you can tell them to stop bothering you with no fear of repercussion. Per the Fair Debt Collection Practices Act you can send a Cease Communication Letter and they are not allowed to contact you again. As a point of fact, you can send a Cease Communication Letter prior to the expiration of the SOL, but there is some risk that you would trigger a lawsuit, so do your homework before taking action. In addition, should you decide to negotiate the balance, you will be in the driver’s seat; once the collector understands you know your rights they should be grateful that you are offering them anything!
Credit Repair, Collections, and Your Credit Report
Let’s move on to the next phase of your credit repair assault against collections, understanding credit reporting limits. This is interesting and can pay quick dividends. Collectors regularly buy and sell debt; it’s the way the industry works. Most people are not aware that collectors are supposed to withdraw reporting as soon as they sell a debt. Unfortunately, they rarely do, and the darn collections linger for years dragging down your scores. Fortunately, a little credit repair will do the trick. If you dispute a collection that has been sold to another collector it will be removed.
The Credit Reporting Clock
But there is more to know about reporting period limits and collections. Many people are under the impression that derogatory information can stay on their credit report for seven years from the initial reporting date. This is not accurate and can needlessly depress your credit scores for many years. The reporting period clock starts on date of the original default with the original creditor. Collectors cannot reset the reporting period start date. Collectors have nothing to do with setting reporting periods. Don’t make the mistake of thinking a collection can report for seven years from the date it showed up! Figure out the original default date, which was the first time you missed a scheduled payment in the sequence that led to the charge-off or collection status, and count forward seven years and 180 days. This is the date it should fall off.
Get Credit Repair Help
There is credit repair help available. If you don’t have the time or inclination to figure all of this out for yourself just hire a reputable credit repair professional. It’s your credit and it’s important. Take the time to do it right and you will get the results you desire. Good luck!
Copyright © 2008 Sky Blue Credit Repair. All Content. All Rights Reserved.
Credit Repair: How to Handle a Collector
The Basic Rules
Collectors are governed by the Fair Debt Collection Practices Act (FDCPA). Collectors do not always play fair, so it is best if you know the rules. Collectors cannot report a collection to the credit bureaus unless they have sent you a letter detailing the debt and the identity of the original creditor. They must also provide an explanation of your right to challenge the debt within thirty days of receiving the letter; if used properly this is a powerful credit repair tool.
Read that Letter
If you receive a collection letter don’t be intimidated. Collection letters provide a thirty day challenge period. The collection industry is far from perfect. If you are in a credit repair program you are probably aware that debts are sold and resold. Many are past the statute of limitations for collectability. Some are past the reporting period limits for the credit bureaus. And a surprising number of collection letters are sent to the wrong people altogether.
Evaluate the Issue
Don’t jump to any conclusions. Is the debt yours? Did you pay the original creditor? Was the debt discharged in a bankruptcy? Is the amount correct? How old is the debt? You have more rights than you think. Many people needlessly pay collectors for debts that are beyond the statute of limitations, and even past the time limits for reporting to the credit bureaus. An intelligent credit repair effort is always economical. Don’t throw your money away.
Understand Your Statute of Limitation
The statute of limitation for collecting through the courts is often misunderstood. Statutes of limitation are state and debt type specific and are, in almost all cases, far less than the seven year reporting period limit for credit reporting. State statutes of limitation for credit card debt, for example, range from 3 years to 6 years, except for Wyoming, where legislation favors collectors by providing an 8 year limit.
Count Your Statute of Limitation
A large part of every credit repair effort involves researching dates and may take a bit of work. The statute of limitation time limit starts with the original default date, rather than the charge-off date or the date a collector reported to the credit bureaus. The default date was the date of the first missed payment in the sequence that resulted in the collection status. You may find statute of limitation information on the internet. If the debt was entered into in a different state from where you live you need to check two state limits because collectors may apply the more favorable (longer) limit.
Use Time Limits for Credit Repair Success
What does this mean for your credit repair effort? If a collection is beyond the statute of limitation the collector cannot get a judgment. Many collectors bank on debtors not knowing this fact and rely on the implicit threat of legal action to encourage payment. The collector can report the debt to the credit bureaus until the reporting period expires, but nothing more. Here is a great credit repair tip. If you let a collector know that you are aware of the statute of limitation they should be happy to negotiate a much smaller payment. Or if you don’t want to pay, you can wait it out without fear.
Check Your Reporting Period Limits
The reporting period limit for most derogatory information is seven years. The time limit starts with the date of original default. Here again, the default date was the date of the first missed payment. If you were thirty days late in January of 2003 and never made another payment, your default date is January of 2003. Check the dates carefully. Most people in credit repair programs are aware that the dates on credit reports are often inaccurate. Double check everything.
Validate the Debt
Now that you have examined the collection letter and determined your rights it is time to challenge the debt; this is called debt validation, and is useful for your credit repair effort even if you identified the debt as legitimate. If you request the validation of a debt within thirty days of getting a collection letter the FDCPA requires collectors to provide proof they have the legal right to collect and an objective accounting of the amount they say you owe. An objective accounting of the amount should originate from the original creditor.
Dealing with Aggressive Collectors
If you find yourself being harassed by an aggressive collector there are a variety of credit repair tools you can use to stop the annoyance. If the debt is beyond the statute of limitation you can send a letter to the collector demanding they cease all communication immediately. The FDCPA requires that they comply with your request. If the debt is within the statute of limitation the use of a cease communication letter may be a strategic credit repair error, as the collector may opt to sue in response. But it might help to know that you can ask them to stop calling you during working hours by telling them that your employer does not approve of you taking calls.
Copyright © 2007 Sky Blue Credit. All Content. All Rights Reserved.