Archives for "Re-Aging"
Credit Repair: A Fresh Start
Life is Unpredictable
There are innumerable reasons people fall behind on their bills. Getting back on your feet after a period of financial challenge can be hard. But if you take the proper steps you will not only succeed, but emerge stronger than ever. Here are some awesome credit repair tips along with some advice on organizing your efforts.
Post Bankruptcy Cleanup
If events of your life led to the necessity for bankruptcy, don’t feel bad. You are not alone. And if you make sure your credit report reflects the bankruptcy properly, your credit scores will suffer only a minimal impact.
Once a bankruptcy is complete the items that were discharged should no longer report as collections, charge offs, or with past due balances. If you ignore your credit reports after a bankruptcy these items can linger and continue to weigh down your credit scores for years to come. Post-bankruptcy credit repair is easy. Make a copy of your bankruptcy discharge, along with the schedule of items included, and send it to all three credit bureaus requesting them to clean up each effected item.
Student Loan Problems
Student loans are unique among all other liabilities. It is almost impossible to discharge a student loan in bankruptcy, and there is no statute of limitations for collectability. Unlike old credit card debt, you can’t just wait out the next few years until it goes away; student loan debt is here to stay. It is for this reason that we suggest to our customers that they pick up the phone and deal with it right away.
But there is good news. First, the law requires that student loan lenders accommodate borrowers by making repayment as flexible and affordable as possible. And second, there is assistance available to help you understand your rights. If you are having any kind of issues with your student loans, if they are currently past due, or even long since in default, please call the Student Loan Ombudsman Office at (877) 557-2575. Call today!
Credit Card Re-Aging
If you are currently behind on credit card payments and are working hard to catch up there is a way out. There is a little known procedure offered by credit card issuers known as “re-aging.” This procedure will allow you to convert your past due balance into a current balance, and will eliminate the entire history of late payments on the account. That’s right! Once the process is complete your account will be entirely current, and will show on your credit report as if there had never been an issue. This is a super effective credit repair technique!
Here are the rules. The account in question must have been open for at least nine months. For your part, you must offer to make three on-time payments. Re-ageing is designed for people that have been through a period of hardship and are now ready to get back on track; so you need to be in this category, and you must communicate this to the credit card company.
Just call the credit card issuer and tell them that you are interested in their re-aging policy. Some card issuers refer to this process as “curing”. If the person you are speaking with does not know what you are talking about, please ask for their supervisor. I suggest that you organize your thoughts before you call. Remember to tell them that your life has changed and you are going to be a great customer!
Budget Thoughts
An intelligent credit repair effort can make a world of difference. But in the long run, the key to maintaining great credit is living within your means. Life will not always cooperate with your attempt to stay on a budget, but the more careful you are to plan your finances while times are good, the more resilient you will be when unforeseen circumstances arise.
Organizing a budget requires a bit of careful thought – and a pen and paper! You will need to consider all of your monthly expenses. Make sure to include everything, rent, mortgage payments, utilities, auto expenses, food, etc. Knowledge is power. Too many people lose control of their finances simply because they don’t take the time to know what their commitments are. Only when you know your limits can you make reasonable decisions about what to purchase, or what amount of new debt is manageable.
Savings Tips
While you are contemplating your budget, make an allowance for savings. In the long run savings will be the most important contributor to financial stability. Make a habit of setting aside money. Savings leads to confidence and peace of mind. In time your savings will provide the foundation of unshakable credit that is capable of withstanding all of the events of life. Good luck!
Copyright © 2007 Sky Blue Credit. All Content. All Rights Reserved.
Credit Repair: Try This!
Do you have a past due credit card that is hurting your credit scores? Would you like the creditor to make it current, and even eliminate your entire record of late payments? It can be done. Here’s a neat little trick that may be as easy as picking up the phone.
An Overview of Re-Aging
Credit card issuers have the ability to bring your account current and wipe out your entire record of late payments using a procedure called “re-aging”. Re-aging, if managed properly, can be a fantastic credit repair tool. The re-aging guidelines were set by the Federal Financial Institutions Examination Council (FFIEC) in June of 2000 for the purpose of helping “borrowers overcome temporary financial difficulties, such as loss of job, medical emergency, or change in family circumstances like loss of a family member”.
The Policy Background
The FFIEC is a formal interagency body empowered by the Board of Governors of the Federal Reserve System, The Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and others, to prescribe principles and standards in the supervision of financial institutions. The re-aging guidelines are observed by all credit card issuers with the understanding that they can take a more “conservative” stance at their discretion. Credit Unions did not opt to adopt this policy, but if you have a credit card with a credit union it does not hurt to ask if they have a re-aging policy.
Some Plain English
It sounds great so far! But how does it work? Re-aging is defined as “returning a delinquent, open-end account to current status without collecting the total amount of principle, interest, and fees that are contractually due”. And it means what it says. If you meet certain, very reasonable, guidelines your credit card issuer will wipe out your bad credit. What are those guidelines?
Nuts and Bolts
There are a few basic rules. The account has to have existed for at least 9 months, you have to offer to make three on-time payments or an equivalent lump sum payment before the re-aging will be finalized, you cannot re-age an account more than one time in any 12 month period and no more than 2 times in any 5 year period. Working on credit repair? Please note that there is no limit on the number of accounts that you can re-age. But I suggest you complete one effort first to get comfortable.
Your Part of the Deal
Just so you understand, this process is designed for cardholders that have a renewed willingness and ability to make payments in a timely manner. Like any credit repair effort there is no point if you fall behind again. It is also designed for cardholders that have experienced a financial hardship. Remember the list of hardships that constitute acceptable causes of past financial problems: loss of job, medical emergency, and change in family circumstances like loss of a family member. There may be other equally acceptable events. But since the re-aging process is taken seriously you should not expect that your request be honored if you say that you just didn’t want to pay your bills!
Getting Started
Are you ready to get started? Call the credit card issuer and ask them to explain their re-aging policy. Some issuers use the term, “curing”. If the person on the phone does not know what you are talking about you should ask for a supervisor. You will want to organize your thoughts in advance. Remember that you need to communicate the reasons for your past delinquency and your renewed willingness and ability to pay on time from now on.
The Deal
Re-aging deals can differ from one issuer to the next. You will want to make sure that all derogatory information will be deleted from your account. It is also a good idea to get the details in writing. Anyone who has made a credit repair effort knows that verbal agreements with creditors have a pretty poor record of success. If they won’t put it in writing, at least take careful notes including the name and direct phone number of the person that you are speaking with.
A Caution
Removing derogatory information from your credit is a great thing. It is the goal of every credit repair effort. But it is important to keep your FICO score in mind as well. If the issuer resets the opening date on your account when they remove your derogatory information you may lose points, depending on the number and age of other accounts on your report. Ask the issuers specifically if they will reset the open date. Some do and some don’t. If they will, you’ll want to consider the impact on your scores. FICO loves old accounts. If you have plenty of accounts with many years of history there is no problem. But if your credit is young and limited resetting an older account could be a set back, at least temporarily.
Copyright © 2007 Sky Blue Credit. All Content. All Rights Reserved.